Croesus has been a stock I've looked at for quite awhile, ever since my other J-Reit, Saizen, was taken over and I needed to redeploy the capital. However, there were always more compelling buys, until I finally put in an offer at $0.84 for 3000 shares. Including the commission and numerous fees, average price came in at $0.844 per share. Considering that the price before its recent XD was $0.88 with a declared dividend of $0.036, I more or less came out even.
Now, what do we get with Croesus?
1) 11 retail malls, of which 9 is freehold
2) P/B ratio of 0.863, meaning a discount of 14%
3) P/E ratio of 6.405
4) An attractive trailing dividend yield of 7.89%
5) Good recent results with Net Property income, Distributable income and Distribution per Unit all increasing.
6) Enhanced cost savings coming from internalising the management team
7) Higher interest cover ratio from 3.7 to 4.2. This is important as Croesus is quite highly leveraged, with a gearing ratio of 46.1%.
8) A conducive macroeconomic situation as the BOJ is unlikely to increase interest rates within Japan in the near term, keeping the cost of money to remain low. This is unlike Singapore Reits whereby they are affected by interest rate fluctuations coming from the Federal Reserve of America.
All in all, Croesus is likely to be a good dividend growth stock for me, and I will likely be keeping it for the long term.
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