Transurban Group (ASX: TCL) has just declared its distribution to shareholders, is it a buy for income?
Transurban owns and operates 15 toll roads in Melbourne, Sydney, and the greater Washington area. Revenue growth is derived from traffic growth and their very own rivers of gold – inflation protected toll prices. CityLink in Melbourne is Transurban’s biggest asset, in 2018 this accounted for approximaty 32% of their total toll revenue – working out to be about twice the size of the roads in Brisbane.
What Transurban Announced
Transurban has declared that a distribution for 30 cents per share will be paid for the six months to 30 June 2019. The distribution will comprise a 28 cent distribution and a 2 cent fully franked dividend.
This brings the total FY19 distribution to 59 cents per share, of which 3 cents is fully franked.
Is It A Buy For Income?
The current Transurban share price reflects an income yield of 4.3%. This isn’t bad in the low interest environment we’re in, but I think it still looks fairly expensive with the risks there are that its current projects like WestConnex go over budget or over time.
That’s why I would prefer to own the reliable dividend shares in the free report below instead compared to Transurban.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).