Australia | Apr 02 2007
By Chris Shaw
Last week FNArena profiled Spark Infrastructure (SKI) as one of only two companies to receive Buy ratings from all the brokers in the FNArena database that cover the stock. Interest in the company appears to be growing, as this week Intersuisse has initiated coverage, rating the stock as Accumulate.
The broker, like those covered last week, sees the stock as a yield play until it can make additional acquisitions to expand its portfolio, which currently comprises a number of electricity distribution companies around Australia.
While the prospectus guides to distributions of 17.06c this year the broker expects 17.5c, increasing to 18.2c in FY08. This puts the stock on an implied yield of 8.8% this year and 9.1% next year, which is attractive when combined with the long life and low risk assets it has in its portfolio.
For those investors where income is important the company appears to fit the bill, the broker pointing out the asset mix suggests a low level of share price volatility at least until any further acquisition is made.
Shares in Spark are weaker today, as at 1.15pm the stock was down 3c at $1.97.