When you shop at your local mall or neighbourhood shopping plaza, you may be at the location of one of the three companies below. Their large scale operations go across the country and even overseas.
Retail REITs (real estate investment trusts) can be good long-term investments as more rental income from growing consumer spending increases earnings and rising property values over the long-term build up shareholder returns.
Federation Centres Ltd (ASX: FDC) owns and manages about $6.6 billion of shopping centres nationwide. It has a $3.4 billion market capitalisation and listed on the ASX in January 2013 after the company was restructured and formed from the assets of the former Centro Retail Australia.
Its PE is 14.4 and it has a 6.1% dividend yield. In 2013, it had a net profit of $212.7 million, up from the net loss in 2012. Its share price has been ranging between about $2.25 and $2.50. Currently it is $2.39.
In the first half of FY2014, underlying net profit was up 11.9% and distributions were up 13.6%.
Shopping Centres Australia Property Group Ltd (ASX: SCP) owns a portfolio of quality sub-regional and neighbourhood shopping centres as well as retail assets located on convenience retailing in Australia and New Zealand. The properties have stores related to Woolworths Limited (ASX: WOW), such as supermarkets and Big W.
Its PE is 14.7 and it offers a dividend yield of 4.8%. It listed on the ASX in November 2012, starting out at around $1.45 a share. Now it is $1.73. Its first half interim result was a statutory net profit of $43 million.
Westfield Group (ASX: WDC) owns and manages Westfield Shopping Centres and has interests in 91 centres domestically and abroad. It holds ownership in Westfield Retail Trust (ASX: WRT) and is currently seeking shareholder approval of a new business structure where the Australian-New Zealand assets will be split from the overseas assets.
Its PE is 15.8 and the dividend yield is 4.9%. The share price has been trending down since May 2013. Full year net profit for FY2013 was down 6.7% compared to FY2012. Margins may improve if the proposed new business structure is approved since the overseas assets currently are achieving better performance.
Along with your financial investigations of each company, use your own personal experience to see which are popular with shoppers, seem to be attractive and managed well.
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*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.
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