12 pockets of value in the REIT and Infrastructure space

Financial journalist and commentator on 3AW and Sky Business
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There is a ton of value in the stock market – if you’re completely ready to handle further falls from where you bought.  And you won’t know the timeframe for realising that value – only that, on the lessons of history, in the right stocks, you will do so.

Investors are starting to pick through the rubble of smashed-down valuations already, and yield-oriented investors are particularly interested in the income-producing streams known as “bond proxies.” In theory, these are stocks that generate dividend flows comparable, in their reliability, to those of bonds. In reality, a stock dividend should never be seen as being as reliable as the “coupon” payments of a fixed-interest security, such as a bond, and all investors should understand this; but on the stock market, there are securities that provide relatively steady income streams.

From time to time, company stocks themselves have been viewed in this way: the big four banks and Telstra, for example, have been considered rock-solid for dividends, in fact, for increasing dividends. But even before the Coronavirus crash, this strategy had been found wanting, particularly for Telstra. Not only did the telco cut its dividend, but from early 2015 on, investors received a brutal lesson in the capital risk of a stock: what good was Telstra’s supposedly strong yield, if the share price more than halved, as it did over 2015–2018?

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