United Overseas Australia guides for 14% profit growth

United Overseas Australia boasts a 7% trailing yield.

Tom Richardson

Tom is a holder of the CFA Society of the UK administered Investment Management Certificate (IMC) and has more than a decade's professional experience in the investment management industry in Australia and the UK. Tom now works as a writer and editor for TMF Australia and has two easy to remember rules of investing he likes to follow. Avoid overpaying for growth stocks and avoid paying at all for stocks that are cheap for a reason. Tom prefers growth investing over value investing and says it's not rocket science, just avoid overpaying for the best returns.

Published August 14, 2019 3:17 pm AEST

Shares in Malaysia-based real estate investment trust (REIT) United Overseas Australia Limited (ASX: UOS) are flat at 77.5 cents today despite the group guiding investors to expect an unaudited net profit of $49 million in financial year 2019. This would represent growth of around 14% on the prior year's result of $43 million.

Over the past year the shares are up around 20% from 65 cents a share with the group paying 5.5 cents per share in dividends along the way. That places it on a term-deposit-thumping yield of 7%, although without franking credits as the group earns its profits overseas.

UOS is also investing heavily in new commercial developments that could help grow cash flows into the future.

Other more well known REIT or commercial property businesses that have performed superbly over the past year include Charter Hall Group (ASX: CHC) and Mirvac Group (ASX: MGR). They are up 71% and 32% respectively which goes to show how the ultra-low rate environment is leading investors to bid traditional yield shares higher.

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