Capitaland Retail China 7.7% Yield is Attractive

Dividend yield of Capitaland Retail China Trust (CRCT) is currently 7.7%, based on last 12 months trailing dividend distribution. I find this highly attractive as it is even higher than the 5.9% – 7.6% yield range that it has historically traded at. CRCT’s share price closed at $1.36 on Friday. We have to go back to 2016 to find the last time CRCT share price was at this level. If we look at the price trend of CRCT in recent years (i.e. 2014 onwards), the current price level seems to be the support and it doesn’t go down much further than this before it will rebound.

CRCT

Hence, besides Starhill Global Reit, I am also eager watching CRCT’s result announcement on coming Tuesday to see if its business profitability and operational cash flow are still intact. These two are crucial to CRCT’s ability to maintain dividends going forward. I hope everything is ok as CRCT is one of my major dividend contributors.

For some of you who may not be familiar with CapitaLand Retail China Trust, it is a Singapore-based real estate investment trust (“REIT”) established with the objective of investing on a long-term basis in a diversified portfolio of income-producing real estate used primarily for retail purposes and located in China.

I realised that I have not done 2 things diligently of late.

One is to update the dividend distribution table for Q4 2018. I am at least 3 days late for that. If you are interested to access it, you can locate it HERE.

The other thing is that I have not formally welcomed 18 new subscribers to this blog since I last did the welcome of new subscribers 2 months ago.

In total, I am humbled and privileged to have regular 126 subscribers now.

Thank you for your support.

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Have a great investment week ahead.

Take care.

Warriortan

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10 thoughts on “Capitaland Retail China 7.7% Yield is Attractive

  1. Dangerous to buy base on yield. Yield is higher for a few good results. Trade war with US, depreciation of RMB and attack of e-commerce. The shopping mall lease is also short. Just my thoughts.

    Liked by 1 person

    1. Thanks for that feedback. You are right about the point that it’s dangerous to buy on yield. I will warn everyone against it too. However, for CRCT, my faith is built on more than dividend yield alone. I think Capitaland is great shopping mall manager and has accumulated deep expertise in this area. E-commerce is definitely a threat but I think shopping Malls still have a space in our society. Furthermore, even if the dividend yield drops by 25%, it is still >5%. Hence I find it attractive now.

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      1. Think you may be quite inexperience or choose to ignore the exchange rate and trade war effect on China. I may be wrong. I took a look at the chart and the dividend, the next key support is around $1.20. If one night the Dow drop 1,000 points overnight, or Donald woke up at the wrong side of the bed, the loss may be $0.16 per share. This is enough to wipe out one and half year of dividend. Sorry for my straight forwardness. Win or lose, its individual decision but don’t forget Buffet 1st and 2nd rule in investing. 🙂

        Liked by 1 person

      2. Thank you for candid feedback and I cherished such constructive challenges. No one knows everything and if we put all our knowledge together, we will not only enrich ourselves but also help others.

        I don’t do this full time hence, compared to the professionals, I would confess that I probably do not have the same experience depth and research strength. I agreed with you that exchange rate, trade war and e-commerce will pose significant headwinds to CRCT. However, I think the risk from exchange rate and trade war are transient or investors will eventually “normalised” to them. I don’t dismiss the threat they posed but I think at this current price level, I have also create some safety margins. Is it enough? I do not know.

        But since my investment target is to earn 5% yield, I think even if the dividend payout is reduced, a 5% yield is still possible baring complete collapse of the retail market in China.

        Your comments and insights are always welcome on my blog and it will help us and others to get different perspective to the same issue. Thank you once again.

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