Cambridge has released its 2Q2011 presentation. Now it is time for me to update this stock via the 5 indicators.
#1 High Current Dividend Yield of >5%
The dividend per share was declared $0.0103. Taking the market share price of $0.51 into factor, the dividend yield is computed as 8.1% annualised, far exceeding the minimum 5%.
#2 High Expected Dividend Growth
Using the 4 sub-indicators,
1) Quality of properties in portfolio and quality of tenants
Top 10 tenants account for 55% of gross rent.
2)
Expected increase in property prices
Portfolio valuation increased by 5.5% from $928.5m to $1002.9m.
3) Expected increase in rental
Maintains a healthy occupancy rate of 99.02%.
4) Acquisition of new properties
Completed the acquisitions of 4 & 6 Clementi Loop and 60 Tuas South Street 1.
#3 Low Gearing Ratio of <40%
Cambridge managed to reduce its gearing ratio from 33.3% to 32.7%.
#4 REIT Stock Price Is Undervalued
While the stock price remains at a healthy value of $0.505 (as of 29/7/11). Cambridge's NAV increased from $0.61 to $0.62.
#5 The Stock Is Highly Diversified Within Itself
Cambridge's portfolio is diversified between logistics, light industrial, warehousing, industrial, self-storage & warehousing, car showroom & workshop. The diversification is expected to increase with announced future acquisitions.
Overall, Cambridge is a good buy. It has a very stable stock price but comes with a high dividend yield. It has so far the highest number of industrial properties compared to other industrial REITs, which implies wide diversification and lower risk. I will load up more shares if the US government clears the way for its debt defaulting crisis after Aug 2.
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