Utilities in an SMSF

I have no utilities in my SMSF which is in pension mode. AGL is held in both your income and growth portfolios. It is around $19 per share but has a PE of around $29 – fairly high! Is there value in this stock at this point of time?

A: Thanks for the question.

I wouldn’t be too worried if I didn’t own any utilities. They are not a critical sector.They have had a great run, largely driven by lower bond yields.

AGL has done well and is a sound company  – but it is not particularly cheap.

According to FN Arena, the brokers have it trading on an underlying  multiple of 16.8 times FY17 earnings, yield of 3.9%. The consensus target price is $19.76.

 


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