Suncorp Group Ltd (ASX:SUN) share price lower despite planning to hand $600m over to shareholders


The Suncorp Group Ltd (ASX:SUN) share price has fallen 6 cents or 0.4 per cent to $15.38 despite shareholders being set for a windfall once the company completes the sale of its Australian life insurance business for about $725 million.

Suncorp on Tuesday said it had signed a share sale deed with the local subsidiary of Dai-ichi Life Group, along with a 20-year distribution agreement to sell products provided by the Japanese firm.

The ASX-listed company expects to return approximately $600 million of the proceeds to shareholders following the sale, which is expected to complete by the end of the calendar year.

TAL Dai-ichi Life Australia insures almost four million Australians and offers life insurance direct to consumer, through advisers, and via group and workplace superannuation schemes.

Suncorp announced the sale last month, helping Suncorp shares to jump to their highest level since 2007, but had not confirmed the distribution of the proceeds.

Suncorp shares are not overly cheap, trading around 18 times earnings.

But they do offer shareholders an attractive dividend yield, with Suncorp shares trading on a fully franked yield of around 5.2 per cent, including an 8 cents per share special dividend. Suncorp shares are trading ex the final and special dividend.

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Suncorp shares don’t look cheap, but these 3 shares do…

Combining countless hours of research with over 30 years of hands-on stock market investing experience, The Capital Club’s founder Bruce Jackson has just published his definitive list of 3 Cheap and Good ASX Stocks for 2018.

Suncorp was not one of them, but the list does include one tiny gold mining stock, and the company one top fund manager calls the cheapest stock in the ASX 100.

Find out why these 3 Cheap and Good Stocks could be better buys than Suncorp. But you better hurry… these stocks may not stay cheap for long.

See the 3 stocks

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Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
Lauren Surplice is a keen follower of the stock market, investing in individual companies and funds. She follows the daily stock market news, covering the ASX stocks that are moving the markets. You can contact Lauren at