A diversified portfolio (includes investments in different stocks across multiple sectors) helps in reducing the risk in an investors’ portfolio, as the stocks from different sectors perform differentially to the prevailing economic situation. It works in a way that if there is a fall in one of the stocks, that loss could be negated (partially or fully) by the profit earned on another stock.
Let us zoom our lens on three companies, one each from real estate, financials and consumer discretionary sector, and understand their respective business performance.
The table below depicts the price fluctuation for these three companies over the years (via Sparkline):
Platinum Asset Management Limited (ASX:PTM)
Founded in 1994, the ASX-listed company Platinum Asset Management Limited is a fund manager providing portfolios of listed companies. The Company’s products include the following:
- Managed Funds
- Listed Investment Companies (LICs)
- ASX Quoted Managed Funds
- Offshore Products
Net outflows changed FuM:
The Company has been regularly updating the market regarding the changes in its funds under management (FuM). The most recent update is mentioned below:
- On 07 February 2020, PTM stated that the FuM was $24,649.15 million as on 31 January 2020, a decline from $25,117.76 million as on 31 December 2019. There were net outflows of around $254 million which included nearly $176 million of the net outflows from the Platinum Trust Funds in January 2020.
Stock Performance on 07 February 2020: PTM delivered a positive return of 0.8 per cent as compared to the previous closing price.
FY 2019 Results – Challenging year for the company
On 20 November 2019, Platinum released its financial results for 2019, which was a complicated year with lower investment returns compared to the broader market. However, the company remained consistent in delivering dividends to its shareholders while profit margins, despite a decline, continue to stay healthy.
Further, the company has continued to strengthen its presence in Australia. Mentioned below are the key points from the Company’s Annual Report FY 2019 for the period ending 30 June 2019:
- Total dividends for FY 2019 were 27 cents per share which were fully franked, wherein, the interim and final ordinary dividend were 13 and 14 cents per share, respectively. As on 30 June 2019, the Company’s dividend yield was 5.6 per cent.
- PTM Board stated that due to limited requirements of the Company’s capital, it has consistently paid its shareholders over 90 per cent of the Company’s PAT as dividends, over the past decade.
- The total revenue stood at $299 million, which is a dip of $54 million or 15 per cent, as compared to the previous year. Reasons for this decrease were reduced contributions from seed investment portfolios ($21 million) and investment performance fees ($22 million).
- The company reported a decrease of 17 per cent in PAT attributed to shareholders while the earnings per share were down 16 per cent to 27 cents per share, as compared to the previous financial year.
Stock Performance on the date of release of AGM presentation 2019 results (20 November 2019): PTM delivered a return of -3.6 per cent as compared to the previous closing price.
Stock Performance of PTM:
On 11 February 2020, the stock of PTM last traded at $4.720, a decline of 1.242 per cent as compared to its previous closing price. The outstanding shares were approximately 586.68 million, and the company had a market capitalisation of nearly $2.8 billion. The 52 weeks low and high price of the stock was noted at $3.660 and $5.680, respectively. The stock has delivered a positive return of 9.40 per cent and 1.49 per cent in the last six months and one-year respectively.
Scentre Group (ASX:SCG)
An ASX-listed real estate company, Scentre Group, is the operator and owner of the distinguished living centres across New Zealand and Australia. The company’s retail real estate AUM was ~$55.3 billion. Following the demerger of Westfield Group, SCG was formed on 30 June 2014 with a merger of Westfield Retail Trust and operating platform of Australia and New Zealand arms.
On 21 January 2020, the Company mentioned that it would announce its financial results for the year ended 31 December 2019 on 18 February 2020. Following the results announcement, the annual general meeting with shareholders is scheduled on 08 April 2020.
On 07 February 2020, SCG notified the market about its new announcement on dividend distribution which is scheduled for 28 February 2020 (the payment date). The payment amount for distribution is $0.113 per fully paid ordinary shares.
Acquisition of 50% stakes in Booragoon:
On 06 December 2019, SCG notified the market that it had acquired a 50 per cent stake in Booragoon (Garden City) from AMP Capital Diversified Property Fund. The Fund will now be converted into Scentre Group’s 50 per cent joint venture partner. The transaction value amounted to $570 million, which included development rights, brand and all-encompassing long-term property management.
The acquisition price signifies a steady economic yield of nearly 5.5 per cent. The present passing yield is almost 4.7 per cent, with the instant emphasis on enhancing income back to its full capacity. The transaction is projected to be slightly accretive to SCG’s earnings from this year and would raise gearing to 31.7 per cent (Pro-forma 30 June 2019 and prior to the buyback of SCG shares).
Stock Performance of SCG:
On 11 February 2020, the stock of SCG last traded at $3.880, an increase of 0.518 per cent as compared to its previous closing price. The outstanding shares were approximately 5.24 billion, and the company had a market capitalisation of nearly $20.22 billion. The 52 weeks low and high price of the stock was noted at $3.630 and $4.160, respectively. The stock has delivered negative returns of 3.50 per cent and 6.76 per cent in the last six months and one-year respectively.
Flight Centre Travel Group Limited (ASX:FLT)
Founded in 1982 and listed on ASX since 1995, Flight Centre Travel Group Limited is engaged in the business of travel management. FLT has more than 30 brands, with FCM and Corporate Traveller as its key corporate brands.
Strong H1, however, Coronavirus to impact H2 results:
On 07 February 2020, Flight Centre notified the market that it plans to release its first half-yearly financial results on 27 February 2020. Some of the key points that are expected from H1 results for six months period ending 31 December 2019 are as follows:
- A record sale is expected with 11.1 per cent total transaction value, amounting to $12.4 billion
- Underlying profit before tax is expected to be in the range of $100 million to $105 million, which is likely to be marginally above the mid-point of its targeted range ($90million-$110million) for the period.
Unlike the anticipated positive H1 results, the Company expects that Coronavirus will impact the travel patterns during the early period of second-half results.
Issuance of new securities:
On 03 February 2020, FLT made a new announcement for the issuance of 3,133 fully paid ordinary shares under the Flight Centre Travel Group Limited Employee Share Plan.
FLT 4-year agreement with FXL:
On 03 February 2020, Flight Centre Travel Group Limited announced that it has entered into a four-year contract with FlexiGroup Limited (ASX:FXL) as a strategic partner.
Under this, FXL will be the exclusive provider of interest-free finance to the approved Australian customers of FLT, Travel Associates and Universal Traveller.
It is expected that this partnership will induce repeat business to Flight Centre Travel Group Limited.
Stock Performance of FLT:
On 11 February 2020, the stock of FLT last traded at $37.500, a decline of 0.794 per cent as compared to its previous closing price. The outstanding shares were approximately 101.14 million, and the company had a market capitalisation of nearly $3.82 billion. The 52 weeks low and high price of the stock was noted at $37.035 and $49.140, respectively. The stock has delivered negative returns of 16.32 per cent and 9.93 per cent in the last six months and one-year respectively.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.