These three companies offer attractive growth in the years ahead and juicy dividends. All three are involved in the property industry in different ways.
They aren't A-REITS or property trusts as they used to be known – just in case you were wondering. Two are property developers and home builders in the true sense while the third provides managed and serviced offices.
So here they are….
Servcorp Limited (ASX: SRV)
Servcorp offers floors of managed and serviced offices around the world, and yesterday announced a net profit after tax of $33.1 million for the 2015 financial year – up 26% over the previous year. Cash flows were also strong, rising 49%. Servcorp has 145 floors currently, with 46 in Asia Pacific region, 35 in North Asia, 35 in North America and another 38 in Europe & Middle East.
A dividend of 22 cents for the full year franked to 40% represents a dividend yield of 3.4%, or ~3.9% grossed up. Looking forward, net profit before tax is expected to rise by more than 16% in the 2016 financial year.
Cedar Woods Properties Limited (ASX: CWP)
Cedar Woods develops housing estates in Western Australia, Victoria and recently expanded into Queensland. Despite revenues falling 17%, net profit rose 5.6% to a record $42.6 million in the 2015 financial year. The company paid 28 cents of fully franked dividends, equating to a yield at the current price of $4.96 of 5.6% or 8% grossed up. Presales of $153 million up 10% over last year suggest another record net profit in the year ahead. With a P/E of 9.1x, the current price looks very cheap.
Simonds Group Ltd (ASX: SIO)
An annualised dividend yield of 7.6%, fully franked and a trailing P/E ratio of 10.0x makes Simonds Group our third pick. Only recently listed, Simonds is the number one homebuilder in Victoria and also operates in Queensland and South Australia, and plans to enter NSW. The company also has a Builders Academy, which recorded 500% growth in revenues in the 2015 financial year over the previous year. Simonds also comes with low debt levels of $2.8m and recently announced an on-market share buyback for around 7.5 million shares.
