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Opinions Andy Nasr
Ferrovial SAFER-SMTOP PICKJan 31, 2017
Andy NasrStock price when the opinion was issued
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The stock is doing very well, up 50% this year, bringing market cap to $50B and valuation to a not-cheap 51X earnings. Yield is 0.40%. Debt is quite high, at 7X cash flow. Earnings are very variable, but with good overall decent growth. But, consensus calls for lower growth next year. It has benefited from a big shift to infrastructure projects. However, its valuation and debt make us far less enthusiastic towards it than we might be otherwise.
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Varun Anand
Shane ObataShane ObataVarun AnandShane ObataWith global utilities or yield plays falling, what would be a good name to buy? This one is a Spanish infrastructure group. It is utility-like in that they own part of the Highway 407 toll road, so you are almost getting an infrastructure play. This gives you a long dated asset that is earning 5%-6%, compared to where 30-year yields are in the 2% range. Thinks it is good value moving forward.
An infrastructure company and their 2 assets are the Highway 407 and Heathrow Airport. A good example of an infrastructure company that has been beat up giving a decent dividend yield and 2 great assets that give you inflation protection. Trades at a big discount to its replacement costs. Dividend yield of 4.87%. (Analysts’ price target is $20.92.)