Shares in Growthpoint Properties Australia Ltd (ASX: GOZ) have tracked the ASX fairly closely during the course of 2014. Indeed, they are currently up 6% year-to-date, which is slightly better than the ASX's gain of 5% over the same time period. However, the future could prove to be much more profitable for shareholders of the company. Here's why.
Dividend yield
Perhaps the first thing that stands out about Growthpoint is its dividend yield. It currently stands at a whopping 7.2%, which is considerably higher than the ASX's yield of 4.4%. Furthermore, over the next two years Growthpoint is expected to increase dividend per share payments by 4.9%, which makes it a very appealing income play.
Great value
Although shares in the company have risen modestly during the course of 2014, they still offer good value for money. For instance, their P/E is 14.5, which is 12% lower than the ASX's P/E of 16.5. In addition, Growthpoint currently trades on a price to book ratio of just 1.2, which also appears to offer good value since the ASX has a price to book ratio of 1.3.
Growth potential
When it comes to growth prospects, Growthpoint lives up to its name. That's because the company's bottom line is expected to increase by 11% over the next two years, which should help it to raise dividends per share at a brisk pace.
This earnings growth rate, when combined with the company's P/E ratio, equates to a price to earnings growth (PEG) ratio of 1.3. While above the PEG 'sweet spot' of 1.0, it again compares favourably to the wider index, with the ASX having a PEG of 2.2. As a result of this, as well as the company's income potential and attractive valuation, Growthpoint could prove to be a top notch investment moving forward.
