It’s coming to the end of the year and it’s worth reflecting on some investing highlights. Looking at what worked well for your portfolio can help you decide on future investments, deciding if you want to sell your winners or perhaps buy more. Here are two of my favourite investments of 2017: Rural Funds Group (ASX: RFF) Rural Funds has seen its share price grow from $1.73 at the start of year to today’s $2.44. The real estate investment trust (REIT) purely invests in farmland and leases it to quality tenants. Rural Funds has been on quite the acquisition…
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It’s coming to the end of the year and it’s worth reflecting on some investing highlights.
Looking at what worked well for your portfolio can help you decide on future investments, deciding if you want to sell your winners or perhaps buy more.
Here are two of my favourite investments of 2017:
Rural Funds Group (ASX: RFF)
Rural Funds has seen its share price grow from $1.73 at the start of year to today’s $2.44. The real estate investment trust (REIT) purely invests in farmland and leases it to quality tenants.
Rural Funds has been on quite the acquisition streak and regularly raises capital to acquire even more farms.
I think it’s had a strong 2017 due to three main reasons.
Its clever use of new capital and debt has allowed management to grow the net tangible assets (NTA) per unit by a strong rate, although the premium to NTA has substantially grown as well.
The distribution has steadily grown since Rural Funds listed on the ASX and 2017 has been another good year of growth. The distribution in FY17 grew by 8% and management have predicted the FY18 distribution will grow by 4%. This is good, particularly when combined with the payout ratio decreasing to 80%.
Rural Funds’ market capitalisation has grown significantly over the last year, which has attracted a number of larger investors. I don’t think it will be trading at its adjusted NTA any time soon.
I’m very pleased with how my Rural Funds investment has grown over the past year, but I wouldn’t remotely consider buying any more shares unless the price dropped below $2 again.
Rural Funds currently has a trailing distribution yield of 4.03%.
National Veterinary Care Ltd (ASX: NVL)
National Vet Care is even newer to the ASX than Rural Funds.
Since the beginning of 2017 the National Vet Care share price has grown from $2.15 to $2.67, an impressive 24% rise.
FY17 was the first report where the business was operating as a large-scale veterinary clinic operator. It reported a strong year with revenue growing by 51%, underlying earnings before interest, tax, depreciation and amortisation by 57% and basic earnings per share (EPS) grew by 237%.
Management are predicting another good year for FY18 with statutory revenue expected to grow by at least 25%.
I was pleased to see that management are so confident with business progress that it has started paying a dividend, although it’s starting off with a small yield.
I’d be happy to buy more National Vet Care shares at the current price, it’s currently trading at 32x FY17’s earnings.
I’m happy with how 2017 has gone for Rural Funds and National Vet Care. I’m a long-term shareholder of both, so hopefully next year can be another market-beating year too.
Looking towards 2018, I'm a big fan of one of these shares, which could be on track for a great 2018 and beyond.
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Motley Fool contributor Tristan Harrison owns shares of NATVETCARE FPO and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of NATVETCARE FPO and RURALFUNDS STAPLED. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.