7% cash-covered yield: DUET Group

Andrew Stanley

Utility assets owner, DUET Group (ASX:DUE), owns a series of long-life infrastructure assets including the Dampier to Bunbury Pipeline (DBP) and gas and electricity networks in south east Australia and last year’s purchase, Energy Developments (ENE), which in turn owns and operates a series of long-life, contracted utility assets. Included in ENE’s portfolio is a series of low greenhouse gas emission, energy and remote energy generation plants for multiple clients. The company is likely to have opportunities to add to its asset base in time and we expect further opportunities will be examined under DUE’s ownership. DUE has also embarked on a material cost-out story, which we believe offers value to shareholders. The cost and efficiency program will focus on all assets, although we expect efficiencies are most likely to be obtained from the power networks and former government-owned assets. DUE offers a solid, cash-covered yield of circa 7%. (VIEW LINK)


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