Super Retail Group Limited

Maintaining Dividend Payouts: Super Retail Group Limited (ASX:SUL) posted strong growth in sales and EBIT across all divisions for FY-18. Company posted 5.4% increment on its full year dividend from 27.5 cents per share fully franked in FY-17 to 49 cents per share fully franked. Dividend payout was well in line with the company’s dividend policy to maintain it in the range of 55%-65% of underlying net profit after tax.Net debt increased was approximately $42.2 million in FY18. Normalized EPS grew at a CAGR of 5% in five years from June 2013-June 2018. Average post –tax ROC recorded 11.7% CAGR. Average Group normalized EBIT margin noted 8.1% CAGR and CAGR of 3.3% under average group like –for –like sales as recorded from June 2013-June 2018.

Technically, the scrip is on downside trajectory from August 2018. At current juncture formation of a long bearish candle on the charts is indicated. The scrip is trading at the lower bollinger band with band indicating some divergence at the lower zone. Major indicators trade below the signal line, with Moving Average Convergence and Divergence in negative territory. The scrip is already in oversold position.
The market cap of SUL was recorded at $1.48bn, price to earnings ratio (P/E) of 11.51x as on October 26. At current juncture, SUL is trading at the price levels of $7.46. Healthy financials and dividend payout well in line with the management strategy along with current price levels trading at lower zone and in oversold territory exhibit a “Hold” scenario at the current levels. We maintain a “Hold” recommendation on the scrip at the current price levels of $7.46.
 

Rural Funds Group

Asset Enhancement:Rural Funds Group (ASX:RFF) has contracted the acquisition of “Dyamberin”, a cattle property of around 1728 hectare, located in the News England region of New South Wales. The acquisition is expected to fully settle in October 2018. RFF posted an increment of around 12.7 cents per unit in adjusted funds from the operations. 4% distribution growth was backed by conservative pay out of 79% and weighted average lease expiry of 12.4 years. Adjusted net asset value recorded 6.3% rise to $723.6 million, as compared to previous corresponding period.

Technically, the scrip is showing pull backs after touching the lower price levels of $2.04 as on October 10, 2018. RFF is currently trading above the mean deviation of the bollinger bands, the small bullish candle well in close proximity and slightly above the mean line of bollinger poses an upside trend. Looking at major indicators, the stock is expected to consolidate to upside move in near term.
The market cap of RFF was recorded at $705.34m, price to earnings ratio (P/E) of 15x as on October 26. At current juncture, RFF is trading at the price levels of $2.14. Healthy financials with strong distribution growth along with current price levels exhibit a “Hold” position at the current price levels of $2.14.

 

Distribution Growth (Source: Company Reports)
 
 

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