What: Investa Office Fund (ASX: IOF) released its 2014 results to the market, delivering modest growth largely in line with analyst expectations.
Highlights:
- Revenue from ordinary activities up 10.2% to $194.1m
- Profit after tax attributable to members up 15.7% to $183.6m
- Net tangible assets up 12 cents to $3.35/ share, in line with share price
- Total dividends up 4% to 18.50 cents per share for the year
So What?
As Investa divests its remaining asset in Europe and focusses entirely on Australian property, I expect continued modest earnings growth, largely driven by demand for premium property locations despite a soft rental market.
Investa is a well-managed property fund trading broadly in line with its net tangible assets, indicating a fair value with only a slight premium attached. At the current price the fund pays a 5% dividend.
Now What?
Although Investa is well managed, fairly valued and delivers modest performance, I think there are a number of better performing property funds out there, including two that are trading at huge discounts to net tangible assets and deliver earnings entirely in foreign currency.
Investas (pun intended) are likely attracted to Investa Office Fund because of the tangible nature of its assets and earnings, its attractive dividend, and its management strategy.
However in addition to other property funds, The Motley Fool team of analysts has identified another stock we believe to be the single best dividend stock to buy during the 2014-2015 financial year.
Boasting an impressive record of successive years of earnings and dividend increases, this small company is gearing up for further growth– and there's a number of macroeconomic conditions that make successful expansion extremely likely.
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