Helia Group Ltd (ASX: HLI) shares are on a tear at the moment, and it's not hard to see why.
Huge dividend payments are on the way for shareholders
The financial services company has just declared a fully-franked interim dividend of 16 cents per share and an unfranked interim special dividend of 27 cents per share for the first half of the year.
Taken together, just these two dividends would constitute a yearly yield of 7.7%.
But keep in mind that the lenders mortgage insurance company also pays a final dividend, which in recent years has been the larger of the two, and it's not hard to see why the shares are up 9.4% to $5.60.
And it's not too late to get in on the dividend action, with the ex-dividend date for the payments set at 21 August, with the dividends to be paid on 4 September.
As well as the dividend payments, Helia announced a further on-market share buyback to a maximum value of $75 million, which would reduce the company's shares on issue by about 5.3%.
The strong dividend returns came despite the company's underlying net profit for the first half falling 16% to $106.3 million.
Helia Interim Chief Executive Officer Michael Cant said of the result:
Helia delivered a strong financial and operational performance despite a challenging industry backdrop. In the first half of the year, we renewed a number of important customer contracts and continued to make good progress in simplifying and strengthening our business. We continue to play an important role in the Australian home lending market. Our strength and expertise provide support to lenders, enabling them to help more people to buy a home.
Helia said the economic environment had been favourable for claims, however mortgage market conditions remain challenging for new lenders mortgage insurance business.
The company added:
Despite the high loan to value ratio mortgage market growing by 25% on the previous corresponding period in 1Q26, lenders mortgage insurance gross written premium contracted 14%, due to a combination of the government's 5% deposit scheme and lender self-insurance.
Tougher times ahead
Helia said the Federal Government's taxation changes in the May Budget and a slowing property market represented further headwinds to mortgage lending activity.
The company said it had made further progress on simplifying and strengthening its business, and is on track to achieve a $12 million reduction in recurring expenditure by the end of 2026.
Helia also tightened its guidance range for insurance revenue for the full year, from a previous range of $320 to $370 million to a new range of $330 to $360 million.
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