BTI
22-07-26
This is a LIC - Listed Investment Company
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ASX:BTI (Bailador Technology Investments) has experienced mixed performance over the last 5 years. While the company maintains minimal debt and consistently pays a high dividend, its core earnings have declined and the stock price has traded at a significant discount to its underlying Net Tangible Assets (NTA). [1, 2, 3, 4, 5]
Financial Snapshot (5-Year Overview)
- Profit & Earnings: Core earnings have seen an average decline of roughly 6% per year over the last 5 years. In FY2025, BTI reported net earnings of A$19.25 million, down from $20.67 million the previous year. [1, 2, 3]
- Return on Equity (ROE): The trailing twelve months (TTM) ROE hovers near 9.8%, having historically tracked in the solid 8% to 9% range. [1, 2]. The ROE is not consistently growly as are earnings , so forecasting future profit, dividends, etc is difficult
- Debt Levels: BTI maintains a very strong balance sheet with negligible levels of debt (a debt-to-equity ratio of practically 0. The company finances follow-on investments using its robust capital and cash reserves. [1, 2, 3, 4, 5]
- Dividends: BTI is a strong income stock with a dividend yield exceeding 8%. The company has increased dividend payouts by an average of 39% annually over the past 5 years, maintaining a payout ratio of roughly 44% to 45%. [1, 2, 3]
- Share Price vs. Value: Over the 5-year period, BTI's stock has trended down, resulting in a 5-year share price return of approximately -29%. Because the share price has lagged, it regularly trades at a deep discount—frequently between 30% and 44%—to its pre-tax NTA
I look at this as a dividend stock. There is mostly sideways share price movement. very little long term growth in the share price. But if you can buy it at low PE ratios the regular income is welcome
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PE Ratio
5.60 9.11 8.37 31.17 6.00 6.77
2026 2025 2024 2023 2022 2021
Over the last 10 years, Bailador Technology Investments (ASX: BTI) has traded at a median Price-to-Earnings (P/E) ratio of 8.27x, experiencing significant valuation swings driven by the realized gains and valuation adjustments of its underlying technology portfolio. [1]
As of mid-2026, the company trades at a historically low trailing twelve months (TTM) P/E ratio of roughly 5.6x to 5.7x, which sits about 31% below its long-term historical median. [1, 2]
Historical P/E Performance Metrics
According to historical financial tracking from platforms like GuruFocus and Market Index, the company’s key 10-year P/E boundaries include:
- 10-Year High: 35.66x
- 10-Year Median: 8.27x
- 10-Year Low: 3.91x [1]
Recent Yearly P/E Breakdown
Because Bailador operates as a Listed Investment Company (LIC) focused on venture capital and private expansion-stage technology, its net profits (and consequently its P/E ratio) fluctuate dramatically based on when portfolio companies are up-valued or sold.
Important Analytical Considerations
- The "LIC Discount" Blindspot: P/E ratios are often a secondary metric for asset managers like Bailador. Investors primarily evaluate ASX:BTI using its Price-to-NAV (Net Asset Value) ratio. Currently, Bailador trades at a steep discount to its Net Asset Value (Share Price of ~A$0.94 vs NAV of ~A$1.70), reflecting a wider market trend for small-cap investment firms. [1, 2, 3]
- Earnings Lumpiness: High profits during portfolio exits (such as previous cash-realized exits from Instaclustr or Standard Ledger) temporarily spike earnings, making the P/E ratio appear artificially low for the subsequent 12 months.
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ARGO Vs BTI
Argo Investments (ASX:ARG) and Bailador Technology Investments (ASX:BTI) are both Listed Investment Companies (LICs), but they represent completely opposite ends of the risk, growth, and valuation spectrum. [1, 2]
From a Warren Buffett perspective, Argo aligns closely with his core principles of a mature, predictable, "buy-and-hold-forever" business with a durable moat. Bailador behaves much more like a venture capital vehicle—an industry Buffett generally avoids due to its lack of predictable long-term earnings, high risk, and technology-heavy focus. [1, 2, 3]
Key Metrics At a Glance
| Metric | Argo Investments (ASX:ARG) | Bailador Technology (ASX:BTI) | Buffett-Style Assessment |
|---|---|---|---|
| Business Model | Diversified Blue-Chip LIC (est. 1946) | Expansion-Stage Tech Venture Capital | ARG offers extreme predictability; BTI offers high-risk speculation. |
| Trailing P/E Ratio | ~26.9x | ~17.6x | BTI looks "cheaper" on raw earnings, but its earnings fluctuate wildly on lumpy portfolio exits. |
| 10-Year Growth (CAGR) | ~9.0% per annum (Total Return) | ~6.1% per annum (Total Shareholder Return) | ARG tracks the broader ASX index with low volatility. BTI has higher volatility and cyclical asset realization. |
| Current Dividend Yield | ~4.2% to 4.3% (100% Franked) | ~7.6% to 7.8% (100% Franked) | BTI pays a higher optical yield, but it commits to distributing 2.5% of its pre-tax NTA per annum rather than traditional earnings. |
| Dividend Growth | Stable, slow increases (~2.7% p.a. over 10 years) | Lumpy; dependent on tech exits. | ARG actively uses profit reserves to smooth and grow dividends over decades. |
Buffett-Style Breakdown
1. Circle of Competence & Business Moat
- ARG: Argo’s moat is its longevity and cost efficiency. Operating since 1946, it has an ultra-low management expense ratio (~0.14%). Its portfolio is packed with predictable blue chips (e.g., BHP, CBA, Wesfarmers). Buffett loves low costs and defensive, predictable operating histories. [1, 2, 3, 4]
- BTI: Bailador invests in unlisted internet, software, and technology businesses. Because these companies lack decades of steady cash flow, they sit outside a traditional Buffett "circle of competence." BTI lacks a moat on its own; its success relies entirely on the deal-making skills of its management team.
2. Price to Earnings (P/E) & Intrinsic Value
- ARG: At ~26.9x P/E, Argo trades at a premium relative to its 10-year historical median. While Buffett appreciates quality, he avoids overpaying for slow-growing assets. [1]
- BTI: A ~17.6x P/E makes BTI look undervalued on paper. However, Buffett warns against looking at raw P/E ratios for investment companies. BTI's earnings are highly erratic because they depend entirely on when they sell a portfolio company (capital gains realizations) rather than steady operational cash flow. [1, 2]
3. Dividend Stability & Dividend Growth
- ARG: Argo behaves like a classic Buffett dividend stock. It possesses structural "profit reserves," allowing management to bank cash during good years and maintain or increase dividends during market downturns. Starting in 2027, ARG will switch to a reliable quarterly dividend schedule targeting a record 40 cents per share fully franked.
- BTI: BTI pays a massive trailing yield of over 7.5%. However, this distribution is tied directly to a fixed percentage of its Net Tangible Assets (NTA) and capital gains. If the valuations of its private tech portfolio decline, the dividend payment shrinks. This violates Buffett's preference for stable, compounding cash payouts. [1, 2, 3, 4, 5, 6]
The Verdict: Which Would Buffett Buy?
Warren Buffett would almost certainly choose Argo (ASX:ARG) over Bailador, but with a significant caveat. [1]
He would likely treat Bailador as an unpredictable technology play, choosing to pass on it entirely due to its structural reliance on venture capital market cycles. [1]
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How does BTI fund its dividends?
Bailador Technology Investments (ASX:BTI) pays its dividends primarily out of cash reserves generated from investment realizations (capital gains), rather than regular operational earnings or debt. [1]
Because BTI is a Listed Investment Company (LIC) focusing on expansion-stage technology firms, its dividend mechanics differ from traditional operating businesses. [1, 2]
How BTI Funds Its Dividends
- Cash Reserves & Realizations: BTI relies on selling down or exiting its portfolio investments (e.g., its cash realization of SiteMinder). These cash windfalls are held on the balance sheet to fund future investments and fulfill its regular dividend commitments. [1, 2]
- Not Funded by Debt: According to its financial reports, BTI maintains a negative net debt position (-$14.06M) and zero long-term debt. It does not borrow money to pay dividends. [1, 2]
- The "Earnings" Disconnect: In years where portfolio companies grow in value but BTI does not sell any assets, its paper "earnings" (Net Profit After Tax) may fluctuate or appear low. For example, a trailing payout ratio over 100% occurs because its statutory accounting profits don't directly track the cash realizations used to pay the distributions. [1, 2, 3]
The Stated Dividend Policy
BTI has a formal commitment to return cash to shareholders: [1]
- 4.0% of NTA: BTI maintains a policy of paying regular, semi-annual dividends equivalent to 4.0% of its pre-tax Net Tangible Assets (NTA) per annum. [1]
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