The Lemon Fool

Three longstanding shares in the FTSE 100 (figures from Morningstar)

BT.A - P/E 6.08 Yield 6.7 shares price 112 pence (down from 480 in 8 years)

CNA - P/E 1.9, Yield 2.15, share price 138 pence (down from 380 in 8 years)

BLND - P/E 5.9, Yield 6.82, share price 329 (down from over 600 in just 5 years)

P/E's in particular look incredibly low to me, is someone expecting Centrica to go bust in less than 2 years for example?

Any views on these individually or collectively welcome.

Is there something more generally wrong to explain the long term decline of all three or is this just the ongoing fall out from the financial crash of 2008?

John

Debt.

Centrica: ROCE negative. ROE negative. Gross gearing 395% Interest cover negative. Quick and current ratios <1.
BT : ROCE 6% which is too low for me to be interested. Gross gearing 165%. Interest cover 2.8. Quick and current ratios <1.


British Land: A property co, so we can't treat it like a regular trading co. All property was hit hard due to WFH, and since interest rates shot up. Still, there is a floor to property values. Pto TBV 0.6 , we can't be that far off the bottom? Disclosure: I hold.

rhys wrote:BT : ROCE 6% which is too low for me to be interested. Gross gearing 165%. Interest cover 2.8. Quick and current ratios <1.

One of the factors with BT.A is the massive investment in fibre to the premises, requiring essentially a total replacement of their existing copper wire network.

TJH

As I commented today on another thread, B Land (and for that matter Land Secs) have never been much of an investment. Now they are, if anything worse, due to higher interest rates affecting property values in general. They both still have a lot of exposure to Central London offices and many companies are downsizing mostly due to the establishment of WFH.

Centrica has been hopeless for years and a year or two of good profitability owing to high energy costs will not change that. Others have pointed out the obvious weakness in its finances.

Dod

BT - A pension fund with a poorly run telecommunications business as a sideline.

Centrica - Zombie remains of the privatised British Gas. All the valuable parts of the business long since stripped out. Nothing much of any value left. A basket case.

British Land - Can't really comment on it, never paid any attention to it.

I can't say I find any attraction whatsoever in owning shares in the first two.

I don't follow any of these companies, except for a minor interest in British Land because Brookfield Corporation (a Canadian company) owns quite a bit of it. It's the sort of company that Brookfield will consider buying if it becomes seriously distressed.

This week's Investors' Chronicle has a write up on Centrica which points out that a £4.4 billion one-off gain increasing pre-tax profits to £6.4 billion. That will have substantially reduced the PE ratio.

Edit - Just read to the end of the article. It mentions a forecast PE ratio of 10

Jon277 wrote:BLND - P/E 5.9, Yield 6.82, share price 329 (down from over 600 in just 5 years)
John

I would like to comment on BLND
I bought on 7 Mar 08 at 9.334 with the FTSE at 5687
I sold on 19 Mar 19 at 6.122
and now it is 334 and the FTSE 7520
Since buying BLND it has never approached my buy price
I see it as an enterprise that is out of control of management.
There may come a time when it becomes a positive as a response to some market event but I don't expect it

gnawsome wrote:

Jon277 wrote:BLND - P/E 5.9, Yield 6.82, share price 329 (down from over 600 in just 5 years)
John

I would like to comment on BLND
I bought on 7 Mar 08 at 9.334 with the FTSE at 5687
I sold on 19 Mar 19 at 6.122
and now it is 334 and the FTSE 7520
Since buying BLND it has never approached my buy price
I see it as an enterprise that is out of control of management.
There may come a time when it becomes a positive as a response to some market event but I don't expect it

I have no idea why people hold B Land. It and Land Secs, plus UK supermarkets are on my ‘Never hold’ list. Not too keen on miners either.

Dod

Dod101 wrote:
I have no idea why people hold B Land. It and Land Secs, plus UK supermarkets are on my ‘Never hold’ list. Not too keen on miners either.

Dod

Well, Dod, I hold. BLND in my group of 3 REITs, I bought TSCO in the late 1990s and have 3 miners, BHP, RIO and S32 which was spun out of BHP, as was Woodside Energy.

BLND was first bought in 2010 at 472p, with a starting yield of 5.5% and I added in 2013 at 551p, in 2016 at 610p, in 2019 at 535p, in 2020 at 380p and twice in 2022 at 409p and 326p. Dividends were rising gently until the 2020 hiatus. They rose from 6.5p/QTR to 7.75p/wtr, then resumed at 15.04p for the full year in 2021, currently 22.64p for the last year. And of course the share price was 333.6p at the close. My IRR is 2.7%, but the sector is down at the moment. Yield is 6.8%.

SGRO was my first REIT, bought in 2007 at 544p, with an initial yield of 4.2%. The history is more complicated because of the takeover of Brixton Estates in 2009. There was a 12/1 rights issue at 20.25p, followed by a 10/1 consolidation, then an open off at 285p. I took up both in full. Added in 2011 at 223p, took up rights in 2017 at 519p and have since top sliced three times, in 2018 at 590p, in 2019 at 886p, and in 2020 at 966p. Dividends have risen to the current 26.9p and the price has fallen back from a peak of about £13 to the 747p at the close. The IRR is 8.6% and the yield 3.6%.

My third is PHP, bought in 2020 at 152p, with a starting yield of 3.94%. Topped up four times, at 149p in in 2020, at 143p in 2020, at 112p in 2022 and again at 102p in 2022. Dividends rose from 1.48p to the current 1.68p/QTR, but the price has fallen to 96p. My IRR is -6.9% and the yield 6.9%.

The sector has its ups and downs, but the money keeps rolling in.

TJH

tjh290633 wrote:

Dod101 wrote:
I have no idea why people hold B Land. It and Land Secs, plus UK supermarkets are on my ‘Never hold’ list. Not too keen on miners either.

Dod

Well, Dod, I hold. BLND in my group of 3 REITs, I bought TSCO in the late 1990s and have 3 miners, BHP, RIO and S32 which was spun out of BHP, as was Woodside Energy.

BLND was first bought in 2010 at 472p, with a starting yield of 5.5% and I added in 2013 at 551p, in 2016 at 610p, in 2019 at 535p, in 2020 at 380p and twice in 2022 at 409p and 326p. Dividends were rising gently until the 2020 hiatus. They rose from 6.5p/QTR to 7.75p/wtr, then resumed at 15.04p for the full year in 2021, currently 22.64p for the last year. And of course the share price was 333.6p at the close. My IRR is 2.7%, but the sector is down at the moment. Yield is 6.8%.

SGRO was my first REIT, bought in 2007 at 544p, with an initial yield of 4.2%. The history is more complicated because of the takeover of Brixton Estates in 2009. There was a 12/1 rights issue at 20.25p, followed by a 10/1 consolidation, then an open off at 285p. I took up both in full. Added in 2011 at 223p, took up rights in 2017 at 519p and have since top sliced three times, in 2018 at 590p, in 2019 at 886p, and in 2020 at 966p. Dividends have risen to the current 26.9p and the price has fallen back from a peak of about £13 to the 747p at the close. The IRR is 8.6% and the yield 3.6%.

My third is PHP, bought in 2020 at 152p, with a starting yield of 3.94%. Topped up four times, at 149p in in 2020, at 143p in 2020, at 112p in 2022 and again at 102p in 2022. Dividends rose from 1.48p to the current 1.68p/QTR, but the price has fallen to 96p. My IRR is -6.9% and the yield 6.9%.

The sector has its ups and downs, but the money keeps rolling in.

TJH

Your IRR is pathetic for BLand. I hold both Segro and PHP as I have high hopes for a revival in the share price for both. I do not think the dividend for either is in doubt.

Bought Segro first a long time ago when it was Slough Estates.PHP more recently, but Round 2015 at I think about 95p. I have no idea what that makes my IRR but certainly positive and I will keep it indefinitely.

I am not against property shares just B Land and Land Secs.

Dod