DIISF - Admiral: 5% Dividend Yield And Multi-Year Compounding Ahead

• Admiral stock has gained 20% since our upgrade in October, but still represents a multi-year compounder and has a 4.9% Dividend Yield.
• The U.K. Motor business grew its policy count by 8.7% in 2020, continuing long-term share gains; new regulations may help further.
• There was growing momentum in other businesses, with International reaching profitability and U.K. Household profits doubling.
• Admiral stock is trading at 18.9x 2020 EPS, and the normalized P/E is around 20x once we exclude the one-off factors in 2020.
• With shares at 3,217p, we expect a total return of 52% (13.9% annualized) by 2024 year-end, in just over 3 years. Buy.

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