By Jason Fittler
This stock is a good long term stock to hold in your portfolio and I fully expect to see this stock re-rated over the coming 3-5 years during the recovery.
The company is current paying a 6.29% fully Franked dividend which is a grossed up Yield of 8.9%. They have forecast that this will increase to 10.27% by 2011. The stock is current trading at $1.80 with a price target of $1.75.
As you can see there is not a lot of upside in the share price, however, the yield is compelling.
The company has managed to secure a number of good quality projects including government projects; this will secure the cash flow of the company until 2012. After this time I do expect that the economy will be well on the path to recovery and future projects will be obtained.
A little about WTP. It is a listed construction company and property developer in Queensland. The company operates across the country, with offices in Brisbane, Townsville, Perth, Adelaide, Sydney, and Melbourne, and an international office in Vietnam.
The portfolio includes well-known landmarks such as, Suncorp Stadium, Brisbane Cricket Ground and Seaworld Nara Resort. WTP also extends project work to a Refurbishments Division which specializes in conversions, upgrades and office fit outs and heritage building restorations.
If you would like more information on Watpac (WTP) please call me on 07 4771 4577.