The Transurban Group (ASX: TCL) share price is on watch this morning after announcing its distribution to investors.
Distribution news
The toll road giant announced a distribution totaling 21.5 cents per stapled security (share), which will be paid for the six months ending 30 June 2021.
When thinking about the corporate structure of Transurban, it’s worth knowing that a partly franked 20.5 cents distribution will be paid from the Transurban Holding Trust and controlled entities, as well as a 1 cent fully franked dividend from Transurban Holdings Limited and controlled entities.
That takes the total FY21 distribution to 36.5 cents per share, of which 1 cents is fully franked.
Transurban will release its full year result for FY21 on 9 August 2021.
How is Transurban and the share price going?
Whilst there has been some volatility, Transurban shares have essentially been treading water over the last 12 months.
Over the last year, Transurban shares are up 2%. In the 2021 calendar year to date, it’s up 6.5% so far.
Last year saw a large decrease in traffic across all of its road assets. However, before these latest lockdowns, it was seeing a monthly recovery. NSW’s older assets saw traffic growth in March 2021 compared to 2019. Queensland traffic was up 4% in March 2021 compared to 2019. However, Victorian traffic was down 14% and North American traffic was down 18%.
This comes at an important time for Transurban with seven projects currently in development or delivery.
There are also a number of potential opportunities. It provided examples such as acquiring the NSW Government’s 49% stake in WestConnex, the Logan Motorway widening in Queensland and various Express Lanes and extensions in Virginia and Maryland in the US.
Time to jump on the Transurban share price?
The toll road developer, owner and operator aims to balance growth in distributions and investment in new opportunities to create long-term value.
Its weighted average concession life is 29 years, so it still has a long cashflow future ahead.
CommSec numbers suggest the FY22 distribution could be $0.56 per share. That translates to a forward distribution yield of 3.8%.
The prospect of rising interest rates, combined with impacted traffic numbers makes Transurban unappealing to me at the moment.
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