Scentre Group
SCG Details
“A Stable” Rating by Fitch: Scentre Group (ASX: SCG) has recently disclosed that the ensuing AGM shall be held on Thursday, 4 April 2019 and would start at 10:00 AM. The business of the meeting revolves around considering the group’s 2018 financial statements as well as reports, the remuneration report and the election of Directors. The company added that Mr. Steven Lowy would be retiring at the end of AGM.
The company has recently been assigned an ‘A Stable’ credit rating by Fitch. This rating was assigned bearing in mind the company’s leading asset portfolio and exclusive operating platform as well as the group’s consistency of income and robust financial position.
As per the results released for the 12 months period which ended on 31 December 2018, the firm posted funds from operations (“FFO”) of $1.34 Bn resulting into 25.24 cents per security, implying a rise of 3.9%. The company announced a distribution of 22.16 cents per security implying a 2% rise. The growth in FFO was achieved on account of the surge witnessed in the net operating income as well as the project income reflecting the quality of the firm’s platform and its strategic execution of stated plans.
What to Expect From SCG: Going forth, the group forecasts the FFO growth for the 12 months ending 31 December 2019 of approximately 3%.The distribution for 2019 is anticipated to be 22.60 cents per security.
SCG’s specialty In-Store sales growth (In %) (Source: Company Reports)
On the financial metrics front, the company has been able to efficiently manage its debt profile which is evident from the interest coverage of 3.5x and gearing of 33.9%. Meanwhile, the share price has fallen 5.77% in the past six months (as at 05 March 2019) and is trading close to a 52-week lower level, showing an excellent opportunity for the investors to acquire the stock at these levels.Thus, considering the stable income, strong occupancy at 99.3% along with optimization of debt profile, and decent FFO growth guidance for FY19, we maintain our “Buy” rating on the stock at the current market price of $3.950 per share (up 0.765% on 6 March 2019).
SCG Daily Chart (Source: Thomson Reuters)
Westpac Banking Corporation
WBC Details
Increasing Productivity Target: Westpac Banking Corporation (ASX: WBC) disclosed that the management has lifted the group’s productivity target for the next year to $400 million as the bank continue to simplify its products, digitise its business, and modernise its platforms. The management is committed to devote funds in technology to improve the quality of services to customers and make it easier for them to do business with the bank. The management has a confidence that its service-led strategy remains the finest way to generate value for its shareholders. On the other hand, the company has recently announced the interim distribution of $0.3300 per security for SFI (Self-Funding Instalments) over securities in Sonic Healthcare Limited (SHL) as mentioned in PDS (Product Disclosure Statement) and dividends will be applied to reduce the Completion Payment of the SFIs and will be paid On or about 26 March 2019 with the ex-distribution/ entitlement date of 08 March 2019 and record date of 11 March 2019.This distribution shall be 20% franked.
WBC’s Total shareholder return and ROE (Source: Company Reports)
The stock price has fallen by 3.33% over the past six months (as at March 05, 2019) and is trading at reasonable PE level of 11.37x.Hence, considering the decent outlook, strong dividend yield of around 6.96% and robust fundamentals, we maintain our “Buy” recommendation on the stock at the current market price of $27.250 per share (up 0.889% on 6 March 2019).
WBC Daily Chart (Source: Thomson Reuters)
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