Morning Report Friday 30 May 2014
As alerted live to our Subscribers yesterday, we bought OZ Minerals (OZL) as per yesterday’s morning report.
Could Origin Energy (ORG) become the next Telstra (TLS)?
With equity markets so quiet at present (they are almost stagnant), have switched my attention at weeks' end to a question I am regularly asked:
“Is it time to sell my Telstra, and if so where should I put the money to work?”
Telstra (TLS) has rallied over 100% since November 2011 and is still paying a 5.3% fully franked yield.
Origin Energy (ORG) has rallied 57% since November 2011 and is currently paying a 3.2% unfranked dividend.
I believe that TLS will have a period of noticeable underperformance when interest rates inevitably turn higher, but markets are clearly putting this on the back burner for the time being. There is likely to be a sharp pullback when the market does suddenly focus on rates at higher levels, but with Europe still concerned about no inflation, it may be a while off. ORG has primarily been a utilities business, but now it has the significant potential of growth from Liquefied Natural Gas (LNG).
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