Thursday, 9 August 2018

Strategy Report: August 2018 - Property Counters instead of REITS?

In July, I dipped my toes and initiated a small position in Frasers Property Ltd (TQ5) when it dropped below $1.70. It briefly recovered but is now back under $1.70.

My portfolio is heavy on REITS and I don't own a single dedicated property counter. But it seems that property counters are currently worth a look compared to REITs, especially with the small correction due to the SG-property cooling measures.

As a dividend investor, I will look at the usual valuation metrics, the quality of the landbank etc, but in the end, I'm most interested in the dividend yield, payout ratio/dividend cover. And as is my habit, when I'm interested in a sector, I prefer not to go "all-in" on a single share but will try to build a position in a few counters. So far, the other counter that looks good is the venerable Capitaland (C31) with a dividend yield >3% and comes with the Morningstar "4-star rating". Morningstar prefers Capitaland to CityDev which suits me, because CityDev's dividend yield is too low for me.






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