Mr Market seems to have missed this one. Post this acquisition, ECF is now on a 9.5% FY21 earnings yield vs 8.4% in PDS which implies a tax-advantaged distribution yield in the order of 8.5% based on the target payout ratio. I have been invested in ECF for 2 years and Elanor management are arguably some of the best in this sector whilst ECF's office assets are A Grade and well diversified - the fund has delivered like clockwork and deserves a sector average yield in my opinion. With the ASX AREIT 300 currently offering a less tax advantaged 4.5% yield, and the AREIT sector standing out as one of the safest sources of income in a low yield world, ECF looks extraordinarily cheap versus the sector and the market. I expect the stock to be trading well above $2 by the end of 2020.
ECF Price at posting:
$1.26 Sentiment: Buy Disclosure: Held
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