Energy distribution a good long-term investment
Nino Ficca
Investors looking for high yields over a long period of time have been encouraged to examine the energy transmission and distribution industry to help satisfy their needs by a top company executive in the sector.
SP AusNet managing director Nino Ficca said: “Our business is a very stable business. It’s got a very high yield, in the 8 per cent range, which is very tax effective as 68 per cent of the return is tax effective or tax deferred.”
“It’s a very stable return that will go year on year on year,” he added.
Ficca believes an allocation to this industry sector can provide for good diversification in a portfolio, particularly one focused on growth.
“We think it makes for a good break in any balanced portfolio. It’s always good to have a balance between high growth and very stable yield type investments as well,” he said.
The key feature investors should consider is the industry’s longevity and necessity.
“The business will be here effectively forever. It’s not part of a cycle or a boom. This business is part of our everyday life. It’s electricity and gas to your home, my home, and everyone else’s home. So while we still need that service and will do in the foreseeable future it’s a very strong sustainable business,” Ficca said.
SP AusNet shares have been included in a few recognised fund managers’ portfolios and attracted some interest from hedge funds when the company initially listed on the Australian Stock Exchange.
The organisation has today reported a half-yearly profit for the 2006-07 financial year of $555.4 million, which was in line with its prospectus forecast.
The result has allowed the firm to declare a distribution to shareholders that represents 50 per cent of its forecast full year dividend of an 8.4 per cent yield return.
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
