PT Asuransi Tugu Pratama Indonesia Tbk or Tugu Insurance is predicted to continue to post positive performance in the medium term.
Ajaib Sekuritas analyst Rizal Rafly in his statement said that the 40 percent dividend distribution policy supports stable Book Value per Share growth of around 5 percent per year. Then, lower shares increase the attractiveness of dividend yields.
"With sufficient equity buffer, TUGU is in a strong position to maintain dividend distribution above 40 percent, which we believe will provide added value by increasing Return on Equity (ROE)," said Rizal.
He projects that TUGU premiums will grow 8-11 percent in the medium term.
On the other hand, if TUGU is able to maintain risk management and reduce the loss ratio, TUGU's underwriting margin will be thicker.
"We estimate underwriting yield growth of +14 percent per annum (CAGR) in the medium term, provided that TUGU can maintain its loss ratio below 60 percent," he added.
Regarding dividends, TUGU distributed 40 percent of the profit attributable to the parent entity as dividends or equivalent to IDR 78.8 per share, with a total value reaching IDR 280.34 billion.
On the cum date, TUGU's stock price closed at Rp1,040 so that TUGU's dividend yield was equivalent to 7.6 percent. A day after the cum date, TUGU's stock price fell 7.7 percent or equivalent to the yield of the dividend paid.
However, after a long holiday and trading reopened, TUGU's share price rebounded, strengthening 1.56 percent to Rp975 at the close of trading session I.
