Six Infrastructure Sector Stocks

Spark Infrastructure Group

SKI Dividend Details
 
Regulatory outcomes expected to drive growth: Spark Infrastructure Group (ASX: SKI) recorded moderate full year 2015 financial results with standalone operating cash flow at $207.4 million, a marginal growth of 0.2% from previous levels. But, its underlying net profit after tax was down 6.6% to $119.7 million although they declared a final distribution of 6 cents per share in line with the full year guidance of 12 cents per share.
 

Distributions and guidance (Source: Company reports)
 
On the other hand, SKI management recently reported that theirStandalone OCF per security would improve for fiscal year of 2016 driven by the positive regulatory outcomes from Australian Competition Tribunal. VPN Final Determinations are forecasted by April 2016. We believe that there is further scope of a stock rally based on positive outlook, and therefore we recommend a "HOLD" rating on the stock at the current share price of $2.07
 
 
SKI Daily Chart (Source: Thomson Reuters)
 

Sydney Airport Holdings Ltd

SYD Dividend Details
 
Improving traffic: Sydney Airport Holdings Ltd (ASX: SYD) recently released its traffic performance for the month of February 2016 with a total of 3.3 million passengers, which is an increase of 10% from same month a year ago. International and domestic markets recorded a growth of 12.7% and 8.5%, respectively.
 
 
Strong 2015 performance (Source: Company reports)
 
Meanwhile, China Airlines expanded frequencies on their Taipei-Sydney route with the addition of a fifth weekly service operating from July 7 to October 28 on A330 - 300 with 306 seats, which would contribute to the group’s performance. Accordingly, the stock rallied over 7.26% during this year to date (as of March 30, 2016)placing them at very expensive valuations with a high P/E ratio. Hence, we recommend an "Expensive" rating to the stock at the current share price of $6.69
 
 
SYD Daily Chart (Source: Thomson Reuters)
 

CIMIC Group Limited

CIM Dividend Details
 
Growing via acquisitions and new contracts: Cimic Group Ltd (ASX: CIM)recently reported that its CPB Contractors, got selected by GoldLinQ Pty Ltd as the preferred contractor to deliver stage two of the Gold Coast light rail project. The Queensland government has announced $420 million funding for Stage 2 which incorporates design and construction, and operations and maintenance through to 2029.
 

FY16 NPAT guidance (Source: Company reports)
 
Moreover, recently the company announced its compulsory acquisition of remaining shares in Sedgman Limited in which it already owns 90.08% relevant interest. As a result, the shares of CIM surged over 43.6% (as of March 30, 2016) in the last three months alone. However, we believe that this rally in the stock placed them at a high P/E ratio. Therefore, we suggest that the stock is "Expensive" at the current share price of $34.76
 
 
CIM Daily Chart (Source: Thomson Reuters)
 

Macquarie Atlas Roads Group

MQA Dividend Details
 
Rising distribution: For full year 2015, Macquarie Atlas Roads Group (ASX: MQA) reported a 3.5% increase in its revenue and 4.4% rise in EBITDA. Total traffic was higher by 2.9% led by growth across all portfolio assets. This strong performance of the group drove the group’s stock higher, which generated 17.11% in the last three months alone (as of March 30, 2016).
 

Growing distributions and guidance (Source: Company reports)
 
MQA recently declared a distribution of 9 cents per stapled security for the first half of 2016 compared to 6 cents in the same period earlier. We remain bullish on MQA and recommend a "HOLD" rating on this dividend yield stock at the current share price of $4.80
 
 
MQA Daily Chart (Source: Thomson Reuters)
 

Lend Lease Group

LLC Dividend Details
 
Generated double digit growth and issued a positive outlook: Lend Lease Group (ASX: LLC) recorded profit after tax of $353.8 million and earnings per stapled security of 60.9 cents, higher by 12% for the first half year ended December 31, 2015. LLC also registered a record pre sold revenues of $5.4 billion across residential apartments and communities, an increase of 49%. This indicates strong prospects for the firm which estimates a development pipeline end value of $46.6 billion, an increase of 15%.  Construction backlog revenue rose 19% to $18.6 billion.
 

Earnings growth drivers (Source: Company reports)
 
Delivering a rise of almost 3.25% (as of March 30, 2016)in the past one month trading session but down 2.78% in the last five days, we believe that the stock is still trading at attractive P/E against its peers. Trading at a good dividend yield, we rate the stock a "HOLD" at the current share price of $13.87
 
 
LLC Daily Chart (Source: Thomson Reuters)
 

Transurban Group

TCL Dividend Details
 
Good performance but in oversold zone: Transurban Group (ASX: TCL) recorded a toll revenue growth of 19.3% while EBITDA growth stood at 14.6% for the first half of 2016 results. The company swung to net profit of $62 million compared to a net loss of $354 million in year ago period. Looking ahead, the company upgraded its distribution guidance to 45.5 cents per share for full year 2016, an increase of 13.8% from year ago period. Consequently, TCL stock has recorded gains of 7.25% this year to date (as at March 30, 2016) leading the stock at unreasonable P/E ratio. Although the stock has been added in S&P /ASX 20 Index as per the S&P Dow Jones Indices’ March quarter updates, we believe that the stock is currently "Expensive" at the current share price of $11.35
 
 
TCL Daily Chart (Source: Thomson Reuters)

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