Stock of the week - Shares - Money

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Stock of the week

Provided by Aspect Huntley

SP AusNet (SPN)

Recommendations

Buy

Investment ratings

SPN invests in regulated utility infrastructure assets. Singapore Power retains 51% and manages the assets, businesses and finances of SPN through wholly owned subsidiary SP Management. Approximately 90% of SPN�s revenues are regulated. Distributions are covered by operating cash flow, part in the form of capital return. The level of growth in distributions is dependent on the outcome of regulatory resets. The majority of investor returns should come from distributions making SPN an income stock.

Recent Analysis

There was no surprise in the 1H10 result. Group NPAT was up 10.5% to $135.4m with revenue increasing 12.3% to $713.7m for the half. Regulated revenue was up 4.6% to $614.8m, mainly on higher tariffs for the gas distribution and electricity transmission reset. Interim distribution of 4cps was inline with guidance. This is composed of a 1.289cps fully franked dividend, 1.887cps in interest income and 0.824cps of capital return.

Previous close	52 week high	52 week low
$0.88	$1.20	$0.72
Sector
Utilities
Market cap
$2,343 Million

Total shareholder return (avg annual rate)
1yr	3yr	5yr	10yr
-1.4%	-1.6%	--	--

Earnings and dividends forecast (cents per share)
	2010	2011	2012
EPS (c)	8.2	7.7	7.5
PE Ratio (x)	10.7	11.4	11.8
DPS (c)	11.5	8.0	8.1
Div Yield (%)	13.1	9.1	9.2

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