ALX dropped another 2.3% on Monday, extending its fall year-to-date to 18.7%. For subscribers not familiar with this often ignored, ASX200 transport company ALX was established following the split of Macquarie Infrastructure Group (MIG) into two separate stocks more than a decade ago. ALX’s two main international toll road assets are Autoroutes Paris-Rhin Rhone, APRR (France, 31%) and Chicago Skyway (US, 67%).
Traffic and toll revenue in 1Q24 were weaker than expected, particularly at Skyway; the news offered no support to the stock, which has been trending downwards since mid-2022. Importantly, we estimate that it will take until FY27 before underlying cash flow supports an increase in the company dividend, but the current 8.5% yield is already attractive in today’s interest rate environment.
- ALX has been a “yield trap,” and the trend is incredibly poor. While the stock looks interesting below $5 as a dividend play as global interest rates are poised to decline, it’s unlikely to find its way into MM Portfolios.
MM is neutral towards ALX
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