Rural Funds Group acquires a $15.7 million cattle farm, is it a buy for income investors?

Rural Funds Group (ASX: RFF) announced this morning that it is acquiring another cattle farm to add to its existing portfolio.

Rural Funds is a real estate investment trust (REIT) that purely invests in agricultural properties. It currently has a diverse portfolio of farms like cattle, poultry, cotton, almonds, macadamias and vineyards.

The REIT has entered into a contract to buy Comanche, a 7,600 hectare cattle property located in central Queensland for $15.7 million. This purchase will be funded by debt, it has access to $50 million in funding above the current facility limit of $275 million. The settlement is expected in July 2018.

Rural Funds is interested in this cattle property because it offers opportunities for productivity enhancements, similar to a cattle property it bought in July 2016.

The manager for Rural Funds, Rural Funds Management Limited, is well advanced in the process of arranging a tenant and will tell the market when this has been achieved.

The ASX announcement said that this acquisition supports the strategy of acquiring assets where productivity can be improved, with consequent increases in capital value and rental income.

This acquisition should help Rural Funds continue with its aim of increasing the distribution by 4% each year.

Foolish takeaway

Rural Funds has been an excellent investment for income seekers with strong share price growth, a decent yield and a growing distribution. It currently offers a distribution yield of 5%.

The share price has come back a bit in recent weeks, but it’s still trading at a sizeable premium to the adjusted net asset value per share. I wouldn’t call it a value buy at the moment, but it will likely be a good option for income investors at this level.

Another share that could be an excellent dividend option is this top income stock, which just grew its dividend by more than 25%.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended 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 Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!