TOL has been a solid company for some time. This t/o (by Japan Post) isn't a surprise. It does, however bring into focus some observations:
Australian shares are grossly undervalued and mostly unloved. While the rest of the world languishes on zero interest rates, and some even on negative interest rates, Aussie large cap and mid caps continue to deliver dividend yields of 3 to 7%.This is a slightly different take on what a "normal" PE should be. "Show me the money" is still the mantra.
With the weak A$, I would expect more companies will be under the microscope as possible t/o targets.
Japan Post has a diminishing domestic market, not unlike Australia Post. AP bitches and whines. JP goes out and invests in growth opportunities. Australian logistics users will be subsidising Japanese letter senders, just as Australian natural resources subsidise other countries' industrialisation. Even at a $9.04 acquisition cost, TOL will return circa 2.5% pa dividends. Not bad in a zero interest rate environment!
Watch out as more numbers are crunched!
TOL Price at posting:
$8.95 Sentiment: Buy Disclosure: Held
