Overall the traffic results for TCL.ASX were in line with expectation. New projects over the next 2 – 3 years help to underpin the valuation, along with the rising dividend.
We expect to see the traffic growth rate steadying, which then requires a favourable back drop in bonds, i.e slow gradual interest rate rises in the US, to allow TCL to track sideways.
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We’ve been buyers on the recent dip and we see TCL as a sell back above $11.75. For portfolio investors it will pay to cover TCL with an $11.75 call into next year with a view towards collecting the $0.25 December dividend plus the call premium.
Fy17 revenue of$2.2b, on EBITDA of $1.65b, DPS $0.50 places the stock on a forward yield of 4.7%. Fy18 DPS should increase by a further $0.05 to $0.55 per share.
TCL.ASX
