Australia | Jul 24 2006
Investors looking for a high yield, but aren’t too bothered by franking, should take a look at Macquarie Airports (MAP), Intersuisse recommends.
The analysts see the deal with Ferrovial as "vintage Macquarie" as the bank is seen to have built up a close relationship with the company over several years through close cooperation with Macquarie Infra (MIG) and then assisted Ferrovial in its bid for British Airport Authority, and used the deal to bulk up its stake in Sydney Airport.
Over the past year MAp has built up its stake in Copenhagen Airport and is now doing the same with Sydney, the analysts say, with all airports seen as growing passenger numbers.
Intersuisse points out that cashflow per share has grown from 11c in 2005 to around 24-25c in 2006 and 2007 and 34c in 2008, according to its forecasts, and this is seen as a good indicator "for continuing support for distributions."
The company is also likely to benefit on the increasing focus of international airlines on Sydney rather than Melbourne, a liberalised UK-Australia agreement as well as India and China’s industrialisation, with the likely benefits to airline traffic, the analysts say.
Of the nine brokers and equity advisers in the FN Arena database covering the stock, five rate it a Buy, three Neutral and one Avoid.
The average target on the stock is $3.71 and at 1.30pm it was trading at $3.11.
By Terry Hughes