Forum Archive Index - February 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi hugh,
> 
>
>hum, hrooom, can't say I'm very enthused by what's been offered.
>
>(Using last saturday's Press Business section 16/02/02) - median p/e
>16.73.
>
>Contact - gross dividend yld 6.6%, p/e 16.9
>
>Restaurant Brands - gross div yield 7.4%, p/e 15.2%
>
>Sky City - gross div 7.7%, p/e 17.7
>
>Telecom - gross div 5.5%. 11.7
>
>


Have you checked out the term deposit rates at the bank recently 
Hugh?   I don't think you'll find anything that beats any of those 
four that I highlighted.



>
>
>but in the NZ context, and I don't just mean now but recent 
>historical which is what Nick was on about they just don't hack it.
>
> 


So all I have to do is figure out how I can invest 'historically' and 
I am in?   Be careful about being too greedy Hugh.  Historically we 
have had very high interest rates and dividend yields.  There is no 
guarantee those will come back.



>
>And the comment that the NZ property shares have the same yields -
>excuse me?
>
>KIP - 10.6%, p/e 10.6
>
>CNZ - 12.2%, p/e 7.9
>
>


Granted, those yields are attractive.  But if you look at 'earnings 
yield' rather than 'dividend yield' I think you will find the 
figures get a lot closer.  Particularly Telecom who only pay out half 
of their earnings as dividends.   

What the bare figures don't tell you about is the quality of the 
assets.  I am fairly sure Capital Properties is in an 'over-rented' 
position.  This means that as the leases are renegotiated the going 
rate will be lower and ultimately so will your yield.  Furthermore I 
don't think the growth in shareholders equity forecast for these four 
is anywhere near as high as CEN, RBD, SKC and TEL.  SNOOPY





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