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We currently hold DUET Group (DUE) in our SMSF and have enjoyed a healthy annual yield of 7% + over the last few years. With the proposed takeover (and subsequent de-listing) of DUE we are looking for a suitable replacement within the same industry.
Spark Infrastructure (SKI) appears to “fit the bill” as far as industry classification is concerned, yet their current yield is well below what DUE have been paying.
Your thoughts/comments would be appreciated.
Regards.
A: Thanks for the question.
I can’t argue with your choice of Spark Infrastructure – but my question is, do you really need to hold a stock in this industry?
Every stock in the utilities sector has become so expensive, and I am not convinced that this is a must have sector.
If you are okay with an unfranked yield of 5.9% in FY 17 and 6.2% in FY 18 (based on distribution guidance from SKI and current price of $2.57)), then okay.
If you are a little worried that bond rates are going back up (like me), I don’t see this as a particularly attractive investment (at current prices).
Regards
