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Morningstar runs the numbers

Lex Hall  |  11 May 2020Text size  Decrease  Increase  |  
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We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended 8 May.

5.12 per cent

That’s the average annual return since 2000 of the ASX 200. The proportion of total return that comes from dividends is around 60 per cent. Retirement income investment specialist Plato Investment Management estimates that the big four banks paid 30 per cent of gross dividends (cash dividends plus franking) of the entire S&P/ASX 200 index in 2019. Australian investors are now facing a dividend void as blue chips slash their dividends.

25 per cent

That’s by how much traffic is expected to drop at Auckland International Airport, according to Morningstar’s Adam Fleck. The 52-week range of the wide moat company’s share price tells the story of the bittersweet year it’s had: $9.45 to $4.17. Despite the bleak near-term forecast, AIA offers a compelling margin of safety for long-term investors, Fleck says. “We continue to forecast long-term movements growing at a low-single-digit average pace over the 10-year period from fiscal 2019, as global travel returns to normal through 2021, but envision Auckland Airport passenger traffic will only again hit fiscal 2019 levels in fiscal 2023. In response, management has opted to fly a safe path with a NZ$1.2bn equity raising, increasing shares on issue by roughly 21 per cent.”

40 per cent

The extent of Platinum Asset Management's underweight exposure to the US over the five years to 31 December 2019. It’s proved costly, says Morningstar fund analyst Matthew Wilkinson. Platinum has instead heavily favoured companies in the Asian region, especially China and India, with a 40 per cent exposure. Both low interest rates and trade tensions were unsupportive of this investment style. "While Platinum has employed the same process since 1995, its many moving parts have struggled to deliver consistent outcomes," Wilkinson says.

20 per cent

That’s the level of US market penetration tipped for dual-listed spray-on-skin maker Avita and its flagship product Recell, says Morningstar analyst Nicolette Quinn. Key to Quinn’s thesis is the eventual easing of restrictions. "At this stage we expect the lockdown orders in the US to predominantly be lifted by fiscal 2021 and economic activity to resume,” she says. "This will facilitate the rollout of Recell, and we continue to forecast low 20 per cent market penetration for Recell usage in fiscal 2021, up from mid- to high-teens in fiscal 2020." Quinn has rated Avita's fair value uncertainty as “very high risk” due to the unpredictability around the pace and success of the rollout. On midday on Monday, Avita was trading at about a 50 per cent discount.

2.6 billion

That's the number of active Facebook users—a more than 10 per cent jump on the same quarter a year ago, writes Morningstar’s Annalisa Esposito. The company has been one of the main beneficiaries of stay-at-home measures as people try to fight loneliness by reaching out to friends and family over social networks. Morningstar analyst Ali Mogharabi points out that the growth in users and user engagement, along with the valuable data that they generate, makes Facebook attractive to advertisers in the short and long term.

 

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is content editor for Morningstar Australia

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