Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineCivitas targets above-inflation dividend growth
Civitas Social Housing (CSH) 103.8p
Gain to date: 7.6%
Original entry point: Buy at 96.5p, 9 April 2020
Our positive call on social housing investor Civitas Social Housing (CSH) has received some early validation in the form of the company’s latest update (11 May).
We flagged Civitas as a reliable source of income and so it was encouraging to see the dividend fully covered by earnings and a planned 1.9% increase in the payout for the March 2021 financial year, ahead of its inflation-linked target.
The company, which still trades at a slight discount to its updated net asset value per share of 107.87p, provides specialist accommodation to people with learning disabilities and mental health disorders.
Rent is paid by local authorities, supported by central government. Civitas had received 99% of the sums due for the first quarter and second quarter rent collection has so far been unaffected by the coronavirus.
Investec comments: ‘Civitas has £49m of cash although £24m is committed; £212m of properties remain unencumbered (by debt) and available as security for additional borrowing in due course.’
The company says it is in active discussions over the potential acquisition of a range of high-quality existing and new build properties. It is soon to complete on the purchase of a portfolio of specialist facilities in Wales which will contribute to growth in rental income.
SHARES SAYS: Still a solid buy for income seekers.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
