Introduction
Credit Corp Group (ASX: CCP) continues to demonstrate why it belongs in the portfolio of every Australian income investor. At its 2025 Annual General Meeting, the company reaffirmed its FY26 guidance, showcased record productivity levels, and outlined a path to another year of double-digit earnings growth—all while maintaining a fully franked dividend yield above 6%.
This update reinforces Credit Corp’s role as a cornerstone in any Income Factory-style portfolio: dependable, disciplined, and dividend-focused.
Read more about my dividend investing approach on My Income Factory.
FY26 Outlook: Growth With Discipline
Credit Corp confirmed its full-year FY26 guidance in October 2025, projecting:
| Metric | FY26 Guidance | Change vs FY25 |
|---|---|---|
| Ledger Investment | $280–330m | — |
| Gross Lending | $350–390m | — |
| NPAT | $100–110m | +6–17% |
| EPS | 147–162c | +6–17% |
| ROE Target | 16–18% | Consistent |
This steady growth is powered by strong U.S. debt-buying operations, disciplined capital allocation, and rising lending volumes across Australia and New Zealand.
U.S. Debt-Buying Leads the Way
The U.S. segment has been the standout performer. Collections rose 22% year-on-year, with trailing 12-month purchasing up 39%. Productivity surged 45% to US$480 per hour, underscoring the payoff from automation and data analytics investments.
“Strong conversion of additional investment into increased collections” — AGM Presentation 2025
With $145m already deployed in FY26 and $200–230m guided for the year, Credit Corp’s U.S. platform continues to scale efficiently.
Australia & New Zealand: Steady and Efficient
While collections were 7% lower year-on-year due to a smaller purchasing pipeline, the AU/NZ operations maintained exceptional cost discipline. Productivity rose 2% to $333 per hour, and cost-to-collect remained a lean 45%.
The business’s deep local knowledge, robust compliance record, and stable $1.2b repayment book remain hallmarks of sustainable income generation.
Consumer Lending: Quiet Growth Engine
The lending segment quietly delivered record volumes, up 3% from last year. Brands like Wallet Wizard, CarStart, and Wizit continue to attract strong demand. The company has also launched a regulated auto lending arm following recent licensing approval, creating another avenue for income diversification.
Combined, Credit Corp’s lending book now exceeds $500m, generating steady annuity-style revenue streams.
Balance Sheet Strength and Headroom
Gearing remains around 30%, providing ample flexibility for opportunistic investment. With $400m in cash and undrawn facilities, the company is well-positioned to deploy capital into attractively priced portfolios should market stress emerge.
Dividend Strength and Outlook
| FY | Dividend (cps) | Franking | Yield @ $15 | Payout Ratio |
|---|---|---|---|---|
| FY22 | 72 | 100% | 4.8% | 57% |
| FY23 | 79 | 100% | 5.3% | 61% |
| FY24 | 84 | 100% | 5.6% | 58% |
| FY25E | 90–95 | 100% | 6.0–6.3% | ~60% |
A consistent payout ratio and 100% franking credit make Credit Corp’s dividend one of the most tax-efficient income streams on the ASX.
Learn how I evaluate dividend sustainability in my Dividend-Value Strategy guide.
Peer Comparison
| Company | Yield (Grossed-up) | Franking | Comment |
|---|---|---|---|
| CCP | 8.6% | 100% | Balanced growth & income |
| HUM | 8.0% | 100% | Higher risk credit cycle exposure |
| LIB | 6.4% | 100% | Solid but more leveraged |
| GCI | 8.5% | 100% | Pure income fund |
| MOT | 9.1% | 100% | Income-focused, low growth |
CCP sits between growth-oriented lenders and income-heavy credit funds—offering both stability and upside.
Valuation and Opportunity
At around $15.00, (Oct 2025), Credit Corp trades on 9.7x FY26 earnings with a grossed-up yield near 8.6%. With fair value estimated between $17–18, the stock appears 15–20% undervalued.
| Metric | Estimate |
|---|---|
| FY26 EPS (midpoint) | 155c |
| Forward P/E | 9.7x |
| Dividend Yield (cash) | 6.1% |
| Grossed-up Yield | 8.6% |
| Fair Value | $17–18 |
For long-term investors, CCP represents an accumulate opportunity — particularly below $15.50.
Risks to Monitor
- Rising U.S. charge-off rates (4.3% Q2 2025)
- Potential tightening in Australian consumer credit regulation
- FX exposure from U.S. earnings translation
- Labour cost inflation impacting collection margins
That said, the company’s low gearing and data-driven efficiency mitigate these pressures.
Final Thoughts
Credit Corp’s 2025 AGM highlighted a company firing on all cylinders: expanding in the U.S., holding steady in Australia, and maintaining one of the most attractive franked yields in the market.
For dividend investors building their own Income Factory, CCP remains a BUY for its combination of sustainable income, value, and operational excellence.
Target Price: $18.00
Expected Yield (grossed-up): 8.6%
Investment View: Accumulate on weakness
Related Reads
- August 2025 Portfolio Update
- Dividend Growth: The Key Metric for Income Investors in a Low-Yield Australia
- Income Factory Blueprint: How I Build Reliable Cash Flow from ASX Shares
If you’re an investor focused on generating reliable, fully franked income streams from quality ASX companies, subscribe to My Income Factory Newsletter for regular portfolio updates and dividend insights.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.