SINGAPORE (Nov 16): DBS Group Research is maintaining its “buy” recommendation on Frasers Centrepoint and raised its target price from $1.90 to $2, given its potential asset monetisation strategy and high dividend yields.
For FY16 to Sept, FCL declared total dividends of 8.6 cents, including its final dividend of 6.2 cents. While total dividend payout was unchanged from the previous year, it translated into a dividend yield of 5.7%, which is “one of the highest dividend yields among developers” according to DBS analysts Rachel Tan and Derek Tan.
At the same time, FCL’s net debt-to-equity improved from 0.7 times to 0.6 times, after the listing of Frasers Logistics and Industrial Trust in June. The group’s cost of debt also remained unchanged at 3.1%.