3 NZX50-listed diversified stocks to consider in 2021- TPW,PCT,HGH

3 NZX50-listed diversified stocks to consider in 2021- TPW,PCT,HGH


  • Diversification mixes different investments in one portfolio with each asset reacting differently to the same economic event.
  • Trustpower Limited’s quarterly operating report for Q321 showed that customers continued to value the bundle, mobile offerings, and fast fibre products.
  • Precinct Property remains confident in its approach, backed by high occupancy levels, a long-weighted average lease term and high-quality clients.
  • Heartland Group Holdings entered COVID-19 phase in a strong financial position and achieved a NPAT of $72 million for FY20 ended 30 June 2020.

A diversified fund is a multi-asset portfolio that achieves the greatest return with the minimum risk. There is a combination of bonds, fixed income, and commodities in a typical diversified portfolio. Diversification functions when these assets respond differently to the same economic occurrence.

The importance of having a diversified portfolio cannot be ignored as one can never be certain about market performance at any moment. Diversification is the best strategy to invest, especially for investors who are planning for a long-term investment.

Source: Shutterstock

Let’s have a look these 3 NZX50-listed diversified stocks performance.

Trustpower Limited

Trustpower Limited (NZX:TPW), an electricity generator and electricity retailer in NZ, performed strongly in 2020 despite external challenges.

The Group released its quarterly operating report for Q321 on 22 January 2021.

The report showed that customers continued to value its products as well as mobile offerings. TPW’s fixed-line broadband business and fast-fibre products continued to grow, adding over 2,000 net customers in the quarter.

ALSO READ: 5 Ways to Diversify Your Investment Portfolio

However, C&I electricity volumes dropped due to the loss of a small number of high volume and low-margin customers. Mass market volumes stayed strong with YTD volumes up by 0.5% than pcp.

Source: Shutterstock

Some of the highlights of the Group’s quarterly insights for Q321 December 2020 included the following:

  • Average product per customer persists to rise with a 5.4% increase YoY in the number of customers who take 2 or more products.
  • More than 85% of new customer acquisitions in Q321 took 2 or more products.
  • Customer contacts were up 8% in Q321 compared to pcp with a 5% rise in the uptake of digital service channels.
  • South Island Generation production was 13% lower than the pcp, due to a planned outage at TPW’s Waipori scheme.

Trustpower expects its FY21 EBITDAF to be in the range of $185 million to $205 million while FY21 capex to be in the range of $34 million to $44 million.

On 22 January, TPW was trading at $8.7, up 2.23% from its last trade.

Precinct Properties New Zealand Limited

Precinct Properties New Zealand Limited (NZX:PCT) has continued to perform well in FY20 even after getting impacted by COVID-19.

Precinct remains confident in its strategy, which will continue to generate returns for the shareholders. This is backed by high occupancy levels, a long-weighted average lease term and high-quality clients.

As at 30 September 2020, Group’s portfolio value was recorded at $3 billion. Overall occupancy stood at 98% while the weighted average lease term was at 8 years. The Group also reaffirmed its dividend guidance of 6.50 cps for FY21, an increase of 3.2% over the FY20 period.

Source: Shutterstock

The Group also committed to 44 Bowen Street, the second office building of the Bowen Campus Stage-2 development in Wellington, during the quarter. Precinct is also making good progress in its sustainability efforts, which included a GRESB score of 83, significantly above the global average of 70.

GRESB is considered the global norm for ESG benchmarking and reporting for real estate, and remains the core ESG indices performance benchmark.

On 22 January, PCT was trading at $1.725, up 1.47% from its last trade.

Heartland Group Holdings Limited

Heartland Group Holdings Limited (NZX:HGH, ASX:HGH) entered into COVID-19 in a strong financial position. The Bank proactively introduced alternative ways of working, enabling people to work from home.

ALSO READ: Are you 2021 ready? Here are top 5 investing resolutions for New Year

The Group reported an NPAT of $72 million for FY ended 30 June 2020. Heartland was the only among 2 Australasian banks to have no reduction or adverse changes to its rating or outlook as it stepped into the economic downturn.

Fitch affirmed the long-term issuer default rating in May 2020 at BBB for Heartland Bank and BBB for Heartland Australia Group Pty Ltd.

On 22 January, Heartland Group Holdings announced that its subsidiary Heartland Australia Group Pty Limited had completed a senior unsecured bond placement of A$75 million with a key Australian institutional fixed income investor, which was arranged with the assistance of Westpac.

ALSO READ: Heartland Group Holdings (NZX:HGH) re-evaluates the investment valuation in Harmoney

This would take aggregate outstanding issuance to A$220 million. The issuance would further diversify the financing base of the Heartland Community and will primarily be used to build additional capacity to finance A$ reverse mortgage loans and related marketing activities, assist with the creation of new goods and continued assessment of business prospects.

On 22 January, HGH was trading at $1.87, up 1.08% from its last trade.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)


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