Nice, but dull – four dividend super-heroes

Friday, Nov 02 2012 by
Nice but dull  four dividend superheroes

Never has the hunt for yield and good quality income flow been so great, a situation exacerbated by constant volatility and uncertainty and ultra low interest rates and government bond yields. For the slightly more adventurous conservative investor substantial and relatively safe yields can be found in the stock market, though they do come at a price as quality can be expensive in the current environment.

The first two companies Primary Health Properties (PHP) and HICL Infrastructure (formerly HSBC Infrastructure) are considered by some analysts to be like quasi-government bond securities as their revenues are largely guaranteed by the state. Though these two companies are very safe bets by equity standards, they do nonetheless carry operational risk, which is not the case for Gilts. Also, there is always regulatory risk, but the UK government tends to be careful about tinkering too heavily with existing contracts for fear of damaging future investment in the public sector. However, these risks are more than compensated for by their inflation-busting yields.

Just what the doctor ordered

Primary Health Properties (LON:PHP) is a healthcare real estate investment trust – a property company, which lets out modern purpose built medical centres mainly to doctors and dentists across the UK. There's certainly no speculative development for PHP or glamorous trophy buildings to adorn the annual report, but therein lies its 'nice' qualities. Nothing is built until it is pre-let and the lets can be for over a decade with rents linked to inflation. Most of its properties are worth less than £10 million making them relatively straight forward to build and manage in contrast to say a skyscraper. Another positive factor is that it's properties tend to be 99% let. For a property investors it doesn't come much better than that.

PHP really showed its mettle during the financial crisis where revenues remained stable and their were no cash flow crises. This stands in sharp contrast to say British Land, which struggled during the height of the financial crisis. In 2009 PHP did conduct a cautionary rights issue to beef up its equity buffer in case it breached its loan covenants with banks as all commercial property values were under pressure. But as it turned out, this was very profitable for shareholders who took up their rights. All in all this is probably one of the…

Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way


As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.

Do you like this Post?
6 thumbs up
0 thumbs down
Share this post with friends

Primary Health Properties PLC (PHP) is a United Kingdom-based real estate investment trust (REIT). The principal activity of the Company is the investment in primary healthcare property in the United Kingdom and the Republic of Ireland. It specializes in the ownership of freehold or long leasehold interests in purpose-built healthcare facilities, which are leased to general practitioners, National Health Service (NHS) organizations and other associated healthcare users. Its portfolio comprises over 270 primary healthcare facilities. The Company's properties include St Catherine's Health Centre, Birkenhead; Nairn Health Centre, Scotland; Lyng Centre, West Bromwich; Fountains Medical Centre, Chester; Victoria Central Health Centre, Wallasey; Port Talbot Resource Centre, South Wales; Rotherham Community Health Centre, South Yorkshire; Hume Street Medical Centre, Kidderminster, and Oswestry Primary Care Centre, Shropshire. more »

LSE Price
Mkt Cap (£m)
P/E (fwd)
Yield (fwd)

HICL Infrastructure Company Limited is an infrastructure investment company. The Company has a portfolio comprising approximately 110 investments in infrastructure projects in the United Kingdom, Australia, Canada, France, Ireland and the Netherlands. The Company's investment portfolio includes Barking & Dagenham Schools, Boldon School, Edinburgh Schools, Newham BSF Schools, Ecole Centrale Supelec, Manchester School, Bradford Schools 1, Falkirk Schools NPD, Newport Schools, Sheffield BSF Schools, Barnet Hospital, Birmingham Hospitals, Doncaster Mental Health Hospital, Oxford John Radcliffe Hospital, South West Hospital Enniskillen, Addiewell Prison, Gloucester Fire & Rescue, Greater Manchester Police Stations, Dutch High Speed Rail Link and Miles Platting Social Housing. The Company holds investments in various sectors, such as education; health; fire, law and order; transport, and accommodation. The Company's investment advisor is InfraRed Capital Partners Limited. more »

LSE Price
Mkt Cap (£m)
P/E (fwd)
Yield (fwd)

National Grid plc is an electricity and gas utility company focused on transmission and distribution activities in electricity and gas in both the United Kingdom and the United States. The Company's segments include UK Electricity Transmission, which is engaged in high voltage electricity transmission networks in Great Britain; UK Gas Transmission, which is the gas transmission network in Great Britain and United Kingdom liquefied natural gas (LNG) storage activities; UK Gas Distribution, which includes approximately four of the eight regional networks of Great Britain's gas distribution system, and US Regulated, which includes gas distribution networks, electricity distribution networks and high voltage electricity transmission networks in New York, and New England and electricity generation facilities in New York. Its other activities relate to non-regulated businesses and other commercial operations not included within the above segments. more »

LSE Price
Mkt Cap (£m)
P/E (fwd)
Yield (fwd)

  Is Primary Health Properties fundamentally strong or weak? Find out More »

What's your view on this article? Log In to Comment Now

You can track all @StockoChat comments via Twitter

About Justin Pugsley

Justin Pugsley

I’m an investment writer / copywriter producing thought leadership and marketing material and insights for asset management, wealth management and professional services firms. I manage my own investment portfolio and primarily focus on investing in dividend growth shares. I also do some momentum investing and occasionally pursue short-term investment strategies at the margins of my portfolio. I’m fascinated by geo-politics, history, economics and investing.   Linkedin: more »


Stock Picking Tutorial Centre

Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis