Dividend seekers will be pleased to hear that one of the most popular blue-chip real estate investment trusts on the S&P/ ASX200 (ASX: XJO) is rated a buy by the professional analysts at Goldman Sachs.
The operator of the Westfield shopping stores in Australia and New Zealand listed as Scentre Group (ASX: SCG) has a 'buy' rating and $4.81 share price target according to Goldmans. That's 16% above today's price of $4.15 and Goldmans claims the business is "materially undervalued" as it feels that valuations in the retail real estate sector have already de-rated too much.
In fiscal 2018 Scentre handed out 22.16 cents per share in dividends (unfranked) to provide a 5.3% trailing dividend yield, with a forecast for 22.6 cents per share in dividends over fiscal 2019.
Funds from operations over fiscal 2018 came in at 25.24 cents per security so we can see that the group pays out nearly all of its profits in dividends as is common with real estate investment trusts.
Scentre then offers a reasonable dividend yield, but is likely to continue to divide the bulls and bears given the growing popularity of online shopping and delivery.
