Mapletree Commercial Trust 4QFY19/20 DPU Fell 60.6% – Is It A Good Time to Buy?

Mapletree Commercial Trust 4QFY19/20 DPU Fell 60.6% - Is It A Good Time to Buy?

Mapletree Commercial Trust had released their 4QFY19/20 financial results yesterday on 22nd April 2020. The results are excellent with gross revenue and net property income (“NPI”) up 12.8% and 12.6% respectively from 4Q FY18/19, driven mostly by Mapletree Business City (“MBC”) II and in spite of COVID-19 rental rebates.

However, in view of the uncertainties from the current COVID-19 situation, Mapletree Commmercial Trust had retained S$43.7 million from the distributable amount. Thus, Distribution Per Unit (“DPU”) had fallen 60.6% to 0.91 cents for 4QFY19/20.

Similar to what Suntec mall has done, fixed rent for April 2020 will be waived for eligible
retail tenants which is on top of the S$29 million of relief packages that have been granted/committed to support its retail tenants. This will have an impact on subsequent distributable income for subsequent quarters. On a positive note, this impact should be cushioned by the income coming from MBC I and II.

4QFY19/20 Financial Results

4QFY19/20
(S$’000)
4QFY18/19
(S$’000)
YoY(%)
Gross Revenue127,320112,89912.8%
Net Property Income98,57187,56012.6%
Distributable amount before capital
allowance claims and capital distribution
retention
73,85166,86110.5%
Distributable Amount30,09866,861(55.0)%
Distribution Per Unit (“DPU”) (cents)0.912.31(60.6)%

FY19/20 Full Year Financial Results

FY19/20
(S$’000)
FY18/19
(S$’000)
YoY(%)
Gross Revenue482,825443,8938.8%
Net Property Income377,940347,6278.7%
Distributable amount before capital
allowance claims and capital distribution
retention
287,587264,0278.9%
Distributable Amount243,218264,027(7.9)%
Distribution Per Unit (“DPU”) (cents)8.009.14(12.5)%

Occupancy

Occupancy stood at 98.7%. Full year shopper traffic and tenant sales at VivoCity lower by 6.8% and 3.4% respectively largely due to COVID-19 impact in 4Q FY19/20.

Debt

Gearing ratio stood at 33.3% which is in a healthy range with all term loans due in FY19/20 refinanced in advance.

Mapletree Commercial Trust 4QFY19/20 DPU Fell 60.6% - Is It A Good Time to Buy?

Current Dividend Yield

Based on FY19/20 full year distribution of 8 cents and current price of S$1.75, this translates to a current dividend yield of 4.57%.

If Mapletree Commercial Trust continues to pay out only 0.91 cents for each quarter in FY20/21, this translates to an estimated dividend yield of 2.08%.

Mapletree Commercial Trust 4QFY19/20 DPU Fell 60.6% - Is It A Good Time to Buy?

Summary

My opinion of Mapletree Commercial Trust is that it is still expensive at current price. Just based on the FY19/20 full year distribution of 8 cents, this only gives a current dividend yield of 4.57%.

Even if you catch it at the price of S$1.50, this only gives you a dividend yield of 5.33%. The worst case is Mapletree Commercial Trust continues to retain capital for the next few quarters and you see the dividend yield at 2.08%.

However, Mapletree Commercial Trust is a great REIT with outstanding financial results. When the COVID-19 situation is over, I believe it will regain its shine but then the share price should have priced in the recovery.

Screening For Dividend Stocks In April 2020

Screening For Dividend Stocks In April 2020

Last month, the stock market had crashed due to the impact of COVID-19. Since then, the stock market has started its recovery when news of government from different countries started to provide stimulus budget to revive the economy. During the crisis, I have picked up OCBC Bank, Singtel, US Manulife REIT and added more of CapitaMall Trust when their stock prices fell. If you didn’t know, I am a dividend investor. Thus, I usually look out for stocks with attractive dividend yield that provides me with endless dividends many years ahead. The stock market crash has provided me with such an opportunity.

I will run the Stocks Café stock screener every month which gives me a list of stocks that fulfill my dividend criteria. I fall into the medium risk type of investor and thus I never looked at stocks with dividend yield more than 10%. Below are the criteria that I used to identify dividend stocks.

  • Current Yield (%) >= 5 and <= 10
  • Price / Earnings <=20
  • Price / Book <= 3
  • Market Capitalization >= 1B

Below are the top dividend yielding stocks as of 10th April 2020. I believe you will see some REITs that you have been eyeing for before the stock market had crashed. Even though the stock prices have started the recovery, the current yield is still attractive.

NameCurrent Yield %P/EP/BMarket Cap
Mapletree NAC Trust9.9814.440.6112.8B
OUE Commercial REIT8.71113.380.6182B
Ascendas-iTrust8.6445.291.0841.4B
DBS7.8377.650.99848.7B
Frasers Logistics and Industrial Trust7.5689.050.9742.1B
CapitaRetail China Trust7.5578.460.8451.6B
Frasers Commercial Trust7.3857.910.7941.2B
Suntec REIT7.379.210.6053.6B
CapitaMall Trust7.1258.890.7986.2B
Ascendas REIT7.03817.71.2910.1B
Yanlord Land6.7332.970.3582B
ComfortDelgro6.52712.251.2523.2B
Frasers Centrepoint Trust6.2759.410.872.2B
UOB6.1977.740.84933.4B
SIA Engineering6.1810.441.292B
CapitaCommercial Trust6.08212.770.7845.6B
SPH REIT6.08111.840.7862.1B
TCIL HK$6.04417.20.3293.7B
SATS5.93815.92.2113.6B
OCBC Bank5.9227.910.86339.4B
Jardine Cycle & Carriage5.8336.710.8758.1B
Mapletree Commercial Trust5.5955.450.9555.6B
Yangzijiang Ship Building5.4355.90.6013.6B
Guocoland5.3855.720.3741.4B
Olam International5.2089.010.8524.6B
SPH5.19512.190.722.5B
Frasers Property5.1287.320.4533.4B
Lonza5.0425.720.6595.9B

Last, I just want to mention again that the above list is for reference only and we should do our homework before buying into the stock simply for the dividend yield.

REITs Limited Time Offer!

REITs Limited Time Offer!

The Federal Reserve announced that it will cut interest rates to zero as part of its emergency measure to protect the economy from the impact caused by the COVID-19 virus. I thought that this will give the stock market a boost but it didn’t. The stock market plunged further and this makes REITs certainly a lot cheaper at ridiculous prices I have never seen before.

Below are the stocks that I currently held in my stock portfolio. With the dip in stock prices, the current dividend yield had increased which makes certain REITs very attractive. Do expect further downside and do not expect recovery that soon. For long term dividend investors, this should not be much of an issue.

I will probably wait for the stock market to hold steady at current levels before deploying more tranches of my cash.

Stock NameTotal Dividends Paid (Cents) (FY19)Closing Price (18th March 2020)Current Dividend Yield (%)
OUE Commercial REIT3.31S$0.3210.34%
Frasers Commercial Trust9.60S$1.128.57%
Frasers Logistics and Industrial Trust7.00S$0.828.54%
SPH REIT5.60S$0.747.57%
ComfortDelgro9.79S$1.556.32%
CapitaMall Trust11.97S$1.836.54%
Mapletree Commercial Trust9.14S$1.775.16%
Parkway Life REIT13.19S$2.814.69%
ST Engineering15S$3.304.55%