Collection House has been a favourite of contributors to the fool.com.au website for quite some time, with nary a word said against it and a good portion of writers owning shares in the company.
In fact, this debt collector is one of the very few companies on the ASX that can stand on its performance record with no commentary necessary.
Its pretty rare for any company to run the gauntlet of 10+ contributors completely unscathed, but Collection House does it repeatedly.
Here's why:
Collection House Full Year Results by Financial Year
| Results By Financial Year | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Revenue | 8% | 7% | 1% | 4% | 16% | 9% | 10% | ???? |
| Net Profit After Tax | 95% | -1% | 21% | 13% | 25% | 23% | 19% | ???? |
| Dividends | 135% | 4% | 18% | 6% | 3%% | 11% | 10% | ???? |
(all figures derived from CLH annual reports; rounded down where necessary)
Five-year price performance: 197.1%
As readers can see, it's a sterling performance record, and there are a few key pointers to bear in mind before making an automatic decision to buy the company:
1) Collection House achieves growth in both sunny and gloomy financial conditions (like post-GFC 2008).
2) Profit grows faster than revenue, requiring only a small increase in company size to capture disproportionately greater profits.
3) Reliable dividend growth sees investors earning proportionately greater returns on their initial investment over time.
4) Expansion of collection operations in 2015 both domestically and in Manila should see continued revenue and profit growth in coming years.
5) Low interest rates and loose lending policies at the moment are likely to catch up in the form of increased bad debts in the future. While this is bad news for lenders, it's great for Collection House shareholders.
Thus in addition to an outstanding performance record, Collection House shareholders can expect short-term growth as a result of an expansion in company operations, and medium-term growth thanks to favourable macroeconomic conditions.
Eventually Collection House will experience heightened competition in its operations but its geographically diversified and 'one-stop shop' style business will help maintain the group's firm footing going forwards.
Factor in a dividend yield of 4% fully franked at today's prices and strong defensive exposure to any upcoming downturns, and I give you an excellent contender for the position of 'Best Stock on the ASX'.
