APA delivered a solid FY25 result on Wednesday with earnings at the top of guidance, and marginally above consensus. They forecast a FY26 dividend of 58c part franked putting it on an attractive yield of 6.55%, plus some franking, with the official cash rate set to plumb 3% over the coming year. The correlation between APA and the Australian 3-Year Bonds is extremely high and while we remain bullish towards the 3s (yields lower) it’s unlikely we will exit our APA positions.
- We like APA as yield-sensitive defensive utility while interest rates are expected to decline: MM holds APA in both our income and growth portfolios.
MM is long and bullish towards APA
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APA Group (APA v Australian 3-Year Bonds)
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APA Group (APA v Australian 3-Year Bonds)
