I'm not very keen on Medibank Private Ltd (ASX: MPL) shares at today's prices. While a good business with a strong balance sheet, it pays a weak dividend in % terms which I believe is a direct result of the company being fully priced today (the % dividend yield shrinks as share prices rise).
Here are two companies I think could be a better investment than Medibank at today's prices:
National Storage REIT (ASX: NSR)
National Storage operates a network of self-storage sites, with 100 storage centres across Australia and New Zealand. It's a boring business, but reliable, and management is lifting occupancy and expanding by acquisition. The company is growing earnings per share at a modest rate, and pays a tasty 6% dividend at today's prices.
With average occupancy is at 78% in the core portfolio and just 53% in the developing portfolio (less mature centres), National Storage has plenty of room to continue growing organically, as well as by acquisition.
Vocus Group Ltd (ASX: VOC)
Telecom Vocus Group has been smashed along with the rest of the sector in recent times – shares are down 63% in the past 12 months. Yet with a strong collection of assets, a cheap price, and plenty of room to grow its 6% market share, Vocus looks underpriced relative to its opportunity.
The dividend was cut recently to fund integration costs with Vocus' recent acquisitions, but even at today's lower levels it reflects an attractive 4.2% yield. With cost-saving synergies still to be achieved from acquisitions, and the disruption coming to the broadband market as a result of customer migration to the NBN, Vocus is in a good position to grow its earnings and dividends.
