Top 5 ASX Fully Franked Dividend Stocks For FY23 Free Report

1. BHP Group Limited (ASX: BHP)

The Board of BHP Group Limited (ASX: BHP) on 20 May 2022 announced that it had determined to pay to BHP shareholders an in-specie dividend in the form of Woodside Petroleum Ltd (Woodside) shares in connection with the merger of BHP’s oil and gas portfolio with Woodside (Merger).

The in-specie dividend is scheduled to be paid on 1 June 2022 and will be fully franked.

The completion of the Merger, is scheduled for 1 June 2022. Subject to completion occurring, BHP is expected to receive 914,768,948 newly issued Woodside ordinary shares.

Eligible BHP shareholders will receive one newly issued Woodside share for every 5.5340 BHP shares they hold at the close of business on 26 May 2022 (Record Date). Holders of BHP American depositary shares (ADSs) will be entitled to receive one Woodside ADS for every 2.7670 BHP ADS they hold at the Record Date (with each Woodside ADS representing one Woodside share), subject to payment of taxes and applicable fees and expenses.

(Chart source: TradingView) Monthly Candlestick Price Chart Pattern)

On 3 May 2022, BHP completed the sale of its 80 % interest in BHP Mitsui Coal (BMC) to Stanmore SMC Holdings Pty Ltd, a wholly owned entity of Stanmore Resources Limited (Stanmore Resources).

  • Stanmore Resources has paid US$1.1 billion cash consideration at completion plus a preliminary completion adjustment of approximately US$200 million for working capital.
  • US$100 million cash remains payable to BHP in six months on 3 November 2022 with the potential for an additional amount of up to US$150 million in a price-linked earnout payable to BHP in the 2024 calendar year.
  • The total cash consideration for the transaction will be up to US$1.35 billion plus the final completion adjustment amount.

Quarter Activity Report Highlights: –

  • BHP delivered strong and reliable production in the third quarter.
  • WA iron ore business continues to perform strongly and remains on track to achieve full year volume and cost guidance.
  • Queensland’s metallurgical coal business delivered strong underlying performance and benefited from better weather in the quarter.
  • Jansen potash project is on track, with good progress on the shafts, in the underground mining systems and at the port.
  • Total copper production decreased by 10 per cent to 1,112 kt.
  • Total iron ore production in line with the prior period at 189 Mt.
  • Metallurgical coal production decreased by two per cent to 28 Mt.
  • Energy coal production is broadly in line with the prior period at 10 Mt.

Full year Guidance 2022:

  • Production guidance for iron ore for the 2022 financial year remains unchanged at between 249 and 259 Mt.
  • Queensland Coal production guidance for the 2022 financial year remains unchanged at between 38 and 41 Mt (68 and 72 Mt on a 100 per cent basis), of which BMA is expected to contribute between 29 and 31 Mt, and BMC is expected to contribute between 9 and 10 Mt.
  • Production guidance for the 2022 financial year remains unchanged at between 13 and 15 Mt.
  • Full year total copper production guidance has been lowered to between 1,570 and 1,620 kt, reflecting lowered production guidance for Escondida.
  • Full year nickel production guidance has been lowered to between 80 and 85 kt due to COVID-19 related labour constraints.
  • Full year unit cost guidance for New South Wales Energy Coal (NSWEC) has been increased to between US$76 and US$81 per tonne, reflecting a targeted increase in the proportion of higher quality coal to capture more value from the record high prices for higher quality thermal coal.

Outlook:

Market volatility and inflationary pressures have increased further as a result of the Russian invasion of Ukraine. Market conditions are expected to improve during the course of the 2023 calendar year. The merger of BHP petroleum assets with Woodside has progressed and is set for completion in June 2022 that will create a global top 10 independent energy company by production and the largest energy company listed on the ASX. The combined company will have a high margin oil portfolio, long life LNG assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition.

2. Fortescue Metals Group Ltd (ASX: FMG)

(Source: Refinitiv, Thomson Reuters)

From the Company Reports:( March 2022 quarter Q3FY22)

FMG delivered solid operating performance during the reporting period, underpinned by the successful delivery and ramp up of the Eliwana project, and execution of its integrated operations and marketing strategy.

  • Strong operating performance with mining, processing, rail and shipping combining to deliver shipments of 46.5mt, for Q3 FY22, 10% higher than Q3 FY21, contributing to record shipments for the nine months to 31 March 2022 of 139.5mt.
  • Average revenue of US$100/dry metric tonne (dmt) representing revenue realisation of 70% of the Platts 62% CFR Index for the quarter (68 percent in Q2 FY22). The Platts 62% CFR Index was US$158.30/DMT on 31 March 2022, compared to US$119.00/dmt at 31 December 2021.
  • C1 cost of US$15.78/wet metric tonne (wmt), 3% higher than the previous quarter, and 6% higher than Q3 FY21.
  • As of 31 March 2022, the cash balance was reported at US$2.2 billion, compared to US$2.9 billion on 31 December 2021.
  • Gross debt was unchanged at US$4.6 billion on 31 March 2022, and net debt was US$2.4 billion (US$1.7 billion on 31 December 2021).
  • Interim dividend of US$2.0 billion and capital expenditure of US$830 million in the quarter.

Operational Highlights:- (Q3FY22)

  • Successfully completed a US$1.5 billion offering of Senior Notes on 7 April 2022. The offering included an US$800 million Senior Green Note, Fortescue’s inaugural green bond issue, with the use of proceeds to be applied to decarbonisation initiatives.
  • Completed the acquisition of Williams Advanced Engineering for US$221 million and announced the development of the zero emission Infinity Train.
  • The Iron Bridge Magnetite project is an Unincorporated Joint Venture between FMG Magnetite Pty Ltd (69%) and Formosa Steel IB Pty Ltd (31%) and will deliver 22mt per annum of high grade 67% Fe magnetite concentrate. The first production is now planned for the March 2023 quarter, from the previous guidance of December 2022.
  • During the quarter FFI (Fortescue Future Industries) commenced construction of the Green Energy Manufacturing Centre in Gladstone, Queensland. It has entered a Memorandum of Understanding to partner with E.ON, one of Europe’s largest operators of energy networks and energy infrastructure, to supply up to five million tonnes per annum of green, renewable hydrogen to Europe by 2030.
  • FFI (Fortescue Future Industries) established a working alliance with Airbus to facilitate the decarbonisation of the aviation industry through the supply of green hydrogen.

Guidance FY2022:

  • Shipments: Upgraded to 185 – 188mt (previously 180 – 185mt).
  • C1 cost:-Revised to US$15.75 – US$16.00/wmt (previously US$15.00 – US$15.50/wmt).
  • Capital expenditure (excluding FFI):-Capital Expenditure is amended to US$3.0 – US$3.2 billion (previously US$3.0 – US$3.4 billion).
  • The Iron Bridge Magnetite project capital estimate has been revised to US$3.6 – US$3.8 billion (previously US$3.3 billion – US$3.5 billion).
  • FFI’s FY22 anticipated expenditure is unchanged at US$400 – US$600 million, inclusive of US$100 – US$200 million of capital expenditure and US$300 – US$400 million of operating expenditure.

Industry Analysis:

As per the recent industry research report, the worldwide Market for Iron and Steel size is projected to grow at a CAGR of 2.9% between 2021-2026 to reach USD 1883880 million by 2026, from USD 1587710 million in 2020. Australia produced 922.6Mt of iron ore in 2021, accounting for nearly 40% of the global total with a marginal increase of 0.5% over 2020. Weather disruptions along with labour shortages due to COVID-19-related border restrictions and supply chain disruptions were the key factors behind Australia’s restrained growth. However, the commencement of FMG’s Eliwana mine and ramp-up at BHP’s South Flank, partially offset the impact.

Over the next five years to 2026, Australian iron ore production is projected to grow at a CAGR of 2.6% to reach 1.04 billion tonnes in 2026. The growth is primarily backed by the commencement of new projects such as  FMG’s Iron Bridge, which is progressing on schedule and budget, with the first shipment of concentrate expected to be in December 2022 and simultaneously, construction activities at the Gudai-Darri project continue with operations expected to begin by mid-2022, together with the expansion of the existing ones such as South Flank, which began in 2021 and is gradually expected to ramp up to its full capacity of 80Mt, replacing output from the Yandi mine, which is nearing the end of mine life.

Value Proposition:

  • P/E vs Sector vs Index: FMG is at a good valuation based on its P/E at 5.07x compared to Sector P/E at 11.02x, and Index P/E at 22.93x.
  • P/B vs Sector vs Index: FMG is at a good valuation based on its P/B at 2.56x compared to Sector P/B at 7.19x and Index P/B at 15.28x.
  • ROE vs Sector vs Index: FMG is at a good valuation based on its ROE at 66.51% compared to Sector ROE at 3.85% and Index ROE at 23.11%.
  • Dividend Yield vs Sector vs Index: FMG is at a good valuation based on its Dividend Yield of 20.43% compared to Sector Dividend Yield at 13.66% and Index Dividend Yield of 6.16%. (Source: Refinitiv, Thomson Reuters)

Relative Valuation

FMG with its trailing twelve months key metrics of dividend yield of 11.96% compared to Industry median at 3.38%, EV/EBITDA of 4.2x compared to industry median at – 8.73x and P/E at 6.8x compared to Industry median at-9.26x provides it with sound value proposition.

*Forecasted Twelve Months or NTM (Next Twelve Months): of any financial metrics measure such as EV/Sales, EV/ EBITDA, or P/B, PCF, P/E is the calculation forecasted for the immediate next twelve months from the current date based on projections applied to the revenues, EBITDA etc.

*TTM or Trailing Twelve Months refers to a company’s past 12 consecutive months of performance data from the current date used in financial reporting.

Peer Analysis:

(Source: Refinitiv, Thomson Reuters)

FMG with P/B at 2.56x, P/E at 5.07x and D/E at 24% and Return on Equity at 66.5% and a dividend yield of 20.4% sit well above its peers.

Financial Metrics:

(Source: Refinitiv, Thomson Reuters)

FMG witnessed improvement in margins with net margins growth of 9.26% (year on year) to 46.2% well above Industry net margins of 11.61%. Asset turnover growth of 44.65% (year on year) to 0.86, ROE growth of 26.75% (year on year) to 66.46%, compared to Industry ROE of 15.31% and D/E improved with a reduction of 14.66% (year on year) to 23.99%.

Market Risk Analysis:

  • Volatility in the supply and prices of raw materials, energy and transportation, and volatility in steel prices or mismatches between steel prices and raw material prices can adversely impact the operation results.
  • Regulatory and Compliance risk.
  • Trade Concerns

Outlook:

FMG’s transition to a vertically integrated green energy and resources company continues to gain momentum and is committed to producing zero-carbon green hydrogen. Together with Fortescue Future Industries, WAE will develop the Infinity Train, the world’s first regenerating battery electric iron ore train, eliminating diesel and the associated CO2 emissions from Fortescue’s iron ore trains. The Iron Bridge Magnetite project with its low capital intensity and competitive operating cost structure and strong demand for this high value in use product is expected to attract a premium to the Platts 65% CFR Index and will extend Fortescue’s product range to the high grade market segment.

3. CountPlus Limited (ASX: CUP)

CountPlus Limited (ASX: CUP) on 27 June 2022 provided the following trading update for the 12 months ended 30 June 2022 (FY22).

  • Underlying Earnings Before Interest Tax and Amortisation (EBITA) for FY22 is forecast to be within the range of $10.5 million – $11.0 million, compared to underlying EBITA for FY21 of $7.4 million.
  • Reported EBITA for FY21 was $11.9 million.
  • CUP also announced a proposed on-market buy-back of up to 11,422,255 ordinary shares (Buy-Back).
(Chart Source: Trading View) Technical Chart-Weekly Candlestick Price Chart

On 21 June 2022, CUP announced that its subsidiary firm CountPlus One Pty Ltd (CountPlus One) had acquired the business of CDC Partners Pty Ltd (CDC), a Sydney-based firm that has provided accounting services since 1987.

  • CDC generated recurring revenues of $500,000 in 2021.
  • Consideration for the purchase is $600,000 plus an upside payment if revenues exceed certain targets.
  • A maximum purchase consideration of $800,000 has been agreed upon. 70% of the consideration will be paid upfront, with the remainder over 24 months post completion subject to revenue contribution from the client book.

Financial Results for the half-year period ended on 31 December 2021.

  • The net profit for the Group after income tax attributable to owners of CountPlus amounted to $3,442,000 (31 December 2020: $4,082,000).
  • Earnings per share decreased to 3.08 cents from 3.66 cents in the prior comparable period, reflecting a decrease of 16%, in line with the change in net profit.
  • Underlying NPAT attributable to owners of CountPlus was $3,321,000 for the half-year, a 142% increase from the prior comparable period.
  • Declared fully franked half-year dividend of 1.50 cents per share.

Outlook:

CUP is all focused on making investments in “core-related” diversification activities. These are opportunities to invest in activities that are concerned with inputs/outputs (downstream) into core firm related activities.

4. Cedar Woods Properties Ltd (ASX: CWP)

Cedar Woods Properties Limited (ASX: CWP) is engaged in property investment and development. The Company’s principal interests are in urban land subdivision and built form development for residential, commercial and retail purposes. The Company’s portfolio of assets is located in Western Australia, Victoria, Queensland and South Australia. The Company’s offerings include small housing lots at its residential estates through to high-end apartments at boutique waterfront developments. The Company’s projects include Mariners Cove, The Brook at Byford, Rivergums Baldivis, Byford on the Scarp, Harrisdale Green, Banbury Village, Jackson Green, Williams Landing Residential, Williams Landing Town Centre, Ellendale, Wooloowin, Mangles Bay and Western Edge. The Company’s subsidiaries include Cedar Woods Properties Harrisdale Pty Ltd, Cedar Woods Properties Investments Pty Ltd, Cedar Woods Properties Management Pty Ltd and Cedar Woods Property Sales Pty Ltd.

(Source: Refinitiv, Thomson Reuters)

From the Company Reports:

Third Quarter operational update

Cedar Woods Properties Limited (ASX: CWP) (‘Cedar Woods’ or ‘the Company) on 14 April 2022 provided the following operational update for the third quarter of Financial Year 2022 (Q3 FY22).

Highlights

  • Full year forecast NPAT of approximately $35 million, with a dividend payout ratio of 60-65%, subject to market conditions
  • Record presales of more than $600 million ($426 million PCP), up 40%
  • March 2022 net sales result in the strongest month since June 2020
  • Two strategic new projects secured on deferred terms
  • Expecting strong growth in earnings in FY23

Portfolio Performance

The Company’s projects experienced strong selling conditions through the third quarter with solid sales rates and price growth recorded across many projects in all four states. Lot and apartment sales were down 17% on the strong Q2 FY22. Net sales rebounded in the month of March 2022 with the strongest monthly result recorded since June 2020. Year-to-date net sales over the first three quarters of FY22 were up 10% on the prior corresponding period (Q1-Q3 FY21).

Cedar Woods reports record presales of $560 million

Cedar Woods Properties Limited on 17 February 2022 reported a net profit after tax (‘NPAT’) of $14.1 million for the first half of the 2022 financial year (FY22) and is expecting moderate growth in full year earnings, subject to market conditions and COVID-19 impacts.

Highlights

  • H1 FY22 NPAT of $14.1 million ($22.7 million in the previous corresponding period (PCP))
  • Record presales of more than $560 million ($380 million PCP), up 47%
  • Fully franked interim dividend of 13.0 cents per share declared (13.0 cents pcp); a yield of 5% based on current share price
  • Continues to maintain a solid balance sheet with moderate debt and significant undrawn finance facilities
  • Expecting moderate growth in earnings in FY22, based on settlement projections for Q3 and Q4
  • Anticipating strong medium-term earnings growth

Dividend History:

(Source: Refinitiv, Thomson Reuters)
(Source: Refinitiv, Thomson Reuters) CWP Dividend Profile

Industry Analysis

The total value of Australia’s residential property market recently surged to $9.9 trillion after growing at the fastest annual pace on record in 2021. Residential property prices rose 23.7% through 2021, indicating that the collective value of the wealth of property owners increased by $2 trillion in just one year alone. However, the recent interest rate rises may negatively impact Australian house prices and the volume of dwelling investments. The forecast is of a fall in house prices between 15% to 20%, in capital cities. That, after a good run-up of nearly 40% since 2019. The construction sector also continues to experience supply constraints and cost pressures, which are impacting developers across the nation. It is expected that the combination of factors, like limited new supply, low vacancy rates and increasing net overseas migration will continue to underpin demand and mitigate the impact of rising interest rates.

Value Proposition:

  • P/B vs Index: CWP with P/B at 0.92x sits at a good value proposition compared to Sector P/B at 1.93x and Index P/B at 1.00x
  • P/S vs Index: CWP with P/S at 1.23x sits at a good value proposition compared to Sector P/S at 9.9x and Index P/S at 6.95x.
  • ROE vs Sector: CWP with ROE at 8.45% sits at a good value proposition compared to Sector ROE at -6.05%.
  • Dividend Yield vs Sector vs Index: CWP with a Dividend Yield of 8.43% sits at a good value proposition compared to Sector Dividend yield at 6.17% and Index Dividend Yield of 4.3%.

Relative Valuation:

(Source: Refinitiv, Thomson Reuters)

CWP with EV/Sales (NTM) at 1.2x compared to Real Estate Operations industry EV/Sales (NTM) at 10.2x and Financials Sector (NTM) at 14.1x, EV/EBITDA (NTM) at 7.3x compared to Industry and Sector EV/EBITDA (NTM) at 15.1x and 18.2x, P/B (NTM) at 0.9x compared to Industry and Sector P/B (NTM) at 1.2x and 1x, Dividend Yield (NTM) at 7.1% compared to Industry and Sector at 4.6% and 5.1% sits at a good value proposition.

*Forecasted Twelve Months or NTM (Next Twelve Months): of any financial metrics measure such as EV/Sales, EV/ EBITDA, or P/B, PCF, P/E is the calculation forecasted for the immediate next twelve months from the current date based on projections applied to the revenues, EBITDA etc.

*TTM or Trailing Twelve Months refers to a company’s past 12 consecutive months of performance data from the current date used in financial reporting.

Peer Analysis:

(Source: Refinitiv, Thomson Reuters)

CWP with P/B of 0.9x and D/E of 30% and Return on Average common equity at 6.0%, and Dividend Yield at 5.96% is sitting relatively well among its peers.

Financial Metrics:

(Source: Refinitiv, Thomson Reuters)

CWP with net margins of 10.96% (June 2021), ROE of 8.45% and debt to equity reduction by 9.14% (year on year) to 30.04% maintains sound financial metrics.

Market Risk Analysis:

  • Economic conditions
  • Increased interest rates can dampen demand
  • High unemployment
  • Rising inflation can elevate prospects of further interest rate hikes
  • Market and construction sector conditions
  • Supply chain disruptions

Outlook:

Cedar Woods’ strategy is to grow its national portfolio, diversified by geography, product type and price point so that it continues to hold broad customer appeal and can perform well in a range of market conditions. Cedar Woods is not exposed to a single market or single product type. The Company has a clear view to the opportunities of the future and continues to invest with strategic acquisitions. Cedar Woods has a presence in relatively affordable markets (Qld, WA & SA), which are expected to perform well. Its outlook is encouraged by its record pre-sales, partially de-risking future earnings. The Company is expecting moderate growth in earnings in FY2022 & strong growth is anticipated over the medium-term subject to market & construction sector conditions. It has a Portfolio of over 10,000 lots/dwellings in quality locations to support future earnings.

5. Vicinity Centres (VCX)

Vicinity Centres (ASX: VCX ) is an Australia-based retail property company with a fully integrated asset management platform. The firm’s core offerings are property investment, property management, property development, leasing, and fund management. They have two segments, namely, Property Investment and Strategic Partnerships. Property Investment comprises net property income from investment in a retail property whereas Strategic Partnerships gets fee income from offering property management, development and leasing services to third parties, and management of wholesale property funds. VCX’s added shopping center types, such as super regional, major regional, city Centre, the regional, outlet center, sub regional and neighborhood to its portfolio. The Company has 62 shopping centers across several places like New South Wales, Queensland, South Australia, Tasmania, Victoria, and Western Australia. Vicinity Centers (ASX: VCX), currently owns $16.1 billion of retail assets and manages some $26.1 billion in assets across the full retail asset spectrum.

(Source: Refinitiv, Thomson Reuters)

From the Company Reports:

Vicinity Centres (‘Vicinity’, ASX: VCX) on 20 June 2022 updated its earnings guidance for the 12 months ending 30 June 2022 (‘FY22’) and announced its preliminary asset valuations on 30 June 2022.

FY22 earnings guidance and full-year distribution timetable

Vicinity now expects FY22 Funds From Operations (‘FFO’) to be at or above 12.6 cents per security and Adjusted Funds From Operations (‘AFFO’) to be at or above 10.3 cents per security. Vicinity expects full-year distribution to be towards the lower end of its 95-100% of AFFO target range.

Preliminary asset valuations on 30 June 2022

Vicinity also announced preliminary 30 June 2022 asset valuations which indicate a $245 million, or 1.7%, uplift in book values (representing 5.4 cents per security) for the six months to 30 June 2022 and a modest tightening of the weighted average capitalisation rate to 5.31% from 5.35%.

Vicinity on track to deliver FY22 FFO and AFFO guidance as retail recovery continues

Vicinity Centres on 5 May 2022 announced its quarterly update for the three months ended 31 March 2022 (‘3Q FY22’) and reaffirmed its FY22 FFO and AFFO guidance provided to the market as part of its FY22 interim result (‘1H FY22’) on 16 February 2022.

Key highlights

  • Strong financial and operational execution in 3Q FY22, supported by recovery momentum from 1H FY22
  • Leasing activity accelerated in late February and March following some moderation in January and early February due to the impacts of Omicron
  • Occupancy remained stable at 98.2%
  • A disciplined approach to deal structures and improved leasing spreads continue to support future growth; FY22 to date leasing spreads now at -5.9% (1H FY22: -6.4%)
  • 89% of gross rental billings collected for 3Q FY22; cash collection expected to increase following expiration of SME Codes of Conduct in NSW and Victoria in mid-March
  • March quarter sales were up 11.2% compared to March 2019; purposeful shopping drove spend per visit of 1.34 times 2019 levels (1H FY22: 1.30 times)
  • The transition from planning to execution of Vicinity’s mixed-use development pipeline continues;
  • Settlement date confirmed for the sale of Runaway Bay Centre
  • Vicinity reaffirms FY22 earnings guidance with FY22 FFO per security expected to be in the range of 11.8- 12.6 cents with AFFO per security expected to be in the range of 9.5-10.3 cents; targeting a full-year distribution payout range of 95-100% of AFFO.

Industry Analysis:

Australia is set to continue to grow ~27% population growth over the next 20 years with Melbourne and Sydney’s ‘middle ring’ suburbs to attract a higher share of population growth. Driven by major investment in public transport and access to quality amenity, it will lead to enhanced housing demand and economic growth in these areas representing new retail demand and significant mixed-use development opportunities.

Technology and the Omni channel are further driving consumers to expect a high level of convenience in all parts of their lives. Coupled with this, Australia’s changing demographics and consumer spending patterns are generating an opportunity for shopping centre precincts to incorporate new, non-traditional retail uses. The macroeconomic environment continues to provide favourable tailwinds to the industry.

Value Proposition:

  • P/B vs Sector vs Index: VCX with P/B at 0.86x sits at a good value proposition compared to Sector P/B at 1.17x and Index P/B at 4.41x
  • P/S vs Sector vs Index: VCX with P/S at 7.22x sits at a good value proposition compared to Sector P/S at 15.6x.

Relative Valuation:

(Source: Refinitiv, Thomson Reuters)

VCX with its next twelve month key metrics of EV/Sales (NTM) at 12.9x compared to Residential and Commercial REITs industry EV/Sales (NTM) at 16x and Financials Sector at 13.7x, EV/EBITDA (NTM) at 15.5x, compared to Industry and Sector at 16.6x and 16.4x, P/B at 0.8x compared to Industry and Sector at 0.9x and 1x and Dividend yield at 5.8% compared to Sector and Industry at 5.7% and 5.4% sits at a good value proposition.

Earnings are forecasted to grow by 10.7% compared to Industry growth of 1.7% in next twelve months.

Revenues are forecasted to grow by 15.8% compared to Industry revenues growth of 9.5% in next twelve months.

*Forecasted Twelve Months or NTM (Next Twelve Months): of any financial metrics measure such as EV/Sales, EV/ EBITDA, or P/B, PCF, P/E is the calculation forecasted for the immediate next twelve months from the current date based on projections applied to the revenues, EBITDA etc.

*TTM or Trailing Twelve Months refers to a company’s past 12 consecutive months of performance data from the current date used in financial reporting.

Peer Analysis:

(Source: Refinitiv, Thomson Reuters)

VCX with P/B of 0.8x and P/E of 10.75x and D/E of 37.1% with a dividend yield of 6.1% sits relatively well above its peers.

Financial Metrics:

(Source: Refinitiv, Thomson Reuters)

VCX with improved margins (year on year) and ROE growth of 13.74% and D/E of 37.15% well below Industry D/E of 45.06% maintains a sound financial metrics.

Market Risk Analysis:

  • General economic conditions in Australia
  • Inflationary pressures
  • Rising interest rate environment
  • Income growth
  • Leasing activity
  • Competition in the market

Outlook

Vicinity upgrading its earlier FFO and AFFO guidance, provided to the market, mainly reflects the sustained strength of retail sales and improved negotiation outcomes with retailers, leading to stronger than expected cash collections with respect to current and prior years.

Trading conditions continued to support Vicinity’s ongoing recovery from the pandemic. Cash collections for the 2H FY22 improved moderately to 91% of gross billings, from 89% of gross billings as of 28 April 2022.

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