Company Interview / Dividend darlings on Ben's radar

Key points:

Rising bad debts at CBA seen as creating mispricing in AFG (ASX:AFG)Quality healthcare names $CSL and $COH viewed as de‑rating from stretched valuationsBudget‑driven tilt toward income leads Richards to Euroz Hartleys (ASX:EZL) and Viva Energy (ASX:VEA)

Ben Richards from Seneca Financial Solutions highlights recent Commonwealth Bank of Australia (ASX:CBA) earnings as signalling rising loan loss rates, now at their highest level since Covid on his reading. Richards notes that consumer arrears appear concentrated in personal loans rather than mortgages, yet the broader banking sector has sold off. He views Australian Finance Group (ASX:AFG) as unfairly punished, arguing the mortgage aggregator’s long-term bad debt performance indicates higher-quality lending than the market assumes and sees the current pullback as an opportunity.

Richards also points to what he sees as investors overpaying for perceived quality in large-cap healthcare. He notes $CSL and $COH have historically traded on elevated price-to-earnings multiples, but recent results have triggered sharp de-ratings. In his view, this underlines the need for a disciplined valuation process, especially in an ASX increasingly driven by passive flows, which he considers capable of distorting prices.

Turning to the Federal Budget, Richards expects proposed capital gains tax changes to tilt preferences towards yield. He highlights Euroz Hartleys (ASX:EZL) for its strong cash position and capital return potential, and Viva Energy (ASX:VEA) for its double‑digit gross dividend yield and support from government fuel security settings, alongside higher refining margins.