Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Good morning, I am looking at adding CMW (Cromwell Property Group) to my real estate stocks. I am attracted by the high dividend and it looks to be good value at around 43 cents. Do you believe this is a good entry price from a risk reward perspective, and is the dividend is sustainable?
Hi Chris,
Cromwell Property Group (CMW) is a $1.1bn diversified real estate investor, which is only covered by two brokers who both have it as a Hold. The issue we have with CMW is the capital losses that have unfolded over the last few years while the attractive dividends were being paid i.e. a classic dividend trap.
After recent tough times the company has embarked on a strategy to simplify the business and transition to a capital light funds management model with a local focus. Last month they announced the sale of the European funds management platform and interests to Stoneweg for $457 million, a move which allows CMW to focus on its core competencies in Australia and New Zealand.
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