AGL – A good blend of growth, yield and value

Marcus Tuck

Mason Stevens

An ASX 50 stock that we think meets the criteria of “reasonable growth, yield, and price” for the medium term is AGL Energy (ASX:AGL). It is an integrated energy company and owner, operator and developer of renewable energy generation in Australia. AGL is generating circa 10% p.a. EPS growth and is trading on a 12-months forward dividend yield of 3.75%. The dividend has the added advantage of being 100% franked. The 12-months forward PE multiple of 17 times is not excessive for a company of this quality. Some other ASX 50 stocks offer a higher dividend yield but either lack the sustainable earnings growth, the 100% franking or are trading on a much higher PE multiple. We think AGL offers a good blend of these characteristics, has a sustainable competitive advantage and is well positioned for a future involving greener energy.

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Marcus Tuck
Marcus Tuck
Head of Equities
Mason Stevens

Responsible for identifying domestic and international equity investment opportunities. 25 years of financial markets experience as an equity strategist, economist, analyst, portfolio manager and consultant.

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