Two great yield picks

About the author:

James Lawrence
Author name:
By James Lawrence
Job title:
Former Morgans Analyst
Date posted:
15 July 2014, 3:49 PM
Sectors Covered:
Gaming, Professional Services, Fixed Interest

Interest rates to remain lower for longer

With the Reserve Bank of Australia's Official Cash Rate expected to stay flat at 2.50% for some time, we continue to be attracted to higher yielding equities. 

Two stocks with simple business models and capital structures that currently offer attractive yields are the Asia Pacific Data Centre Group and the 360 Capital Industrial Fund. Both companies are compelling value at current levels and offer yields in excess of 8.50%. Importantly for investors these payments are made quarterly.

Asia Pacific Data Centre Group (AJD)

AJD is a special purpose real estate investment trust which has been established to own properties (land and buildings) that are operated or being developed as data centres. The business was established with the intention of providing investors with a stable income and the potential for capital growth by investing in assets in a high growth and developing data centre industry.

  • The company's assets are leased to ASX listed NEXTDC (NXT) which has a market capitalisation of over $320m. NXT counts a significant number of large international companies as clients.
  • Based on the last price of $1.07 the stock is yielding 8.70% in FY15.
  • The next distribution of approximately 2.25c is due to be paid to investors in October.

360 Capital Industrial Fund (TIX)

TIX is a property investment and funds management group that concentrates on the strategic investment and active investment of industrial property and property related assets. The core focus for the Fund is to protect and enhance portfolio income and capital growth in order to maximise investor value.

  • The company's assets are located across Australia and its largest tenant is Woolworths (WOW) which makes up over 17.5% of the group's income.
  • Based on the last price of $2.24 the stock is yielding 8.50% in FY15.
  • The next distribution of approximately 4.8c is due to be paid to investors in October.

More information

Morgans clients can access our detailed research on AJD and TIX. If you are interested in finding out more, please contact your nearest Morgans office.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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