You should invest in a business that even a fool can run, because someday a fool will.
--Warren Buffett
This one is not as simple as the previous 2.
CapitaLand Mall Trust & Parkway Life REIT
So similar to a REIT, infrastructure trusts work pretty much in a similar way.
A infrastructure trust owns infrastructure assets, like telephone lines and they rent out the cable bandwidth to telco companies or highways, and they collect tolls from users of the highway.
Keppel Infra Trust has the following assets.
Essentially, they own infrastructure assets of many services in Singapore. With the only exception of Basslink which is in Australia.
To me, the assets owned by Keppel Infra Trust is pretty much stable and I believe it will provide a good stable cashflow for many years.
Also, Keppel is somewhat Government linked so I believe it will have a low chance of failure.
So back to my main question. What am I looking for?
Stability of dividends, low risk of bankruptcy, potential capital appreciation.
As a trust owning very key assets in Singapore, I believe that there will be government support to keep this business in action. Thus, I am inclined to think that the dividends are stable and there is a low risk of bankruptcy.
There may not be much chance of capital appreciation as usually, infrastructure assets usually depreciate in value as the lease/contract starts to expire, unless there is a replacement contract following the expiry.
Nonetheless, I think this stock is a stock which I would consider as it would require low monitoring on my part and it would provide me with some nice stable returns.
Price as of time of typing is $0.55
Dividend for the past 12 months is $0.036
Yield is 6.545%
Yep, I like simple investments which give a fair return with low volatility. To me, Keppel Infra Trust counts as one with meets my criteria. Although for this stock I would be a bit more diligent in monitoring the lease expiry dates.
This is my own opinion. Do not take it as a recommendation to buy, if you want to buy, please do your own research. I do not own Keppel Infra Trust now, maybe I will in the future. Past performance is not indicative of future performance.
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