Purchase – Rural Funds Group [ASX:RFF]

By | March 5, 2017

Purchase Of 685 Shares of Rural Funds Group

 

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I have recently made a purchase of Rural Funds Group (RFF) as I like their growth strategy and the current price which reflects their terrific performance so far on the ASX.

This is a relatively new company that listed in early 2014. Therefore it is hard to say too much about them, a lot of other bloggers would steer clear of such an investment but I really like to take some risks with my investments and I really do believe that one day they will pay off, BIG.

RFF are a REIT except they have a twist. They are an agriculture listed REIT, which means they lease out large amounts of land to other companies to grow their almonds in, build a chicken farm or even drove cattle. I believe this will be an excellent long term investment as it is relatively “safe” field (food) and will continue to grow through quality acquisitions. I invested in RFF after they had released their half yearly reports, which in my opinion are awesome. Take a look at some of the highlights below.

rff asx

Rural Funds Group – Presentation 21-02-2017

We will start with the slight negatives, this is the gearing has increased slightly as there were some acquisitions of land made during this half of financial year. But the rest is all good news, earnings rose which is to be expected as more land is bought, but the true winner that you want to see is the earnings per share (EPS). It makes sense that if you buy more land you will raise more revenue, if the EPS falls then this is likely to be a bad acquisition, but as you can see, this has not been the case for RFF, the earnings has risen 150% and the distributions has also risen by 8%.

rff asx

Performance Since Listing in 2014 – NAB Trade

You can see the performance since listing has been pretty good overall, I believe this will still continue to rise as they have a decent gearing and can make more aquisitions through debt funding and through some limited cash holdings. I have a good feeling about RFF.

I bought 685 shares of RFF at a cost basis of roughly $1.77 per share, current price isΒ RFF 1,83 0,00 -0,27%, price when posting this is $1.76.

This adds $66.03 to my yearly dividend income and brings my total expected yearly to $349.67 a year in dividend income.

Have you made any purchases lately? I believe this will be a real winner in the long run.

Cover photo from Rural Funds Group Financial Results presentation 21st Feb 2017.

4 thoughts on “Purchase – Rural Funds Group [ASX:RFF]

  1. Erik @ The Mastermind Within

    I recently purchased $5,500 worth of VHDYX through my post tax retirement account. VHDYX is a Vanguard Dividend index fund. VHDYX has dividend yield around 3%, so this adds up to roughly $150 in additional retirement income.

    Other than that, I’ve been paying down some debt and saving cash. Your analysis is thorough and clear. I like it.

    Enjoy your weekend!

    Reply
    1. Buy - Hold - Long Post author

      Thanks for that Erik, I appreciate every comment I get here. That seems like a pretty solid investment. Vanguard have been one of the best for many years and I don’t see that changing any time soon, nice purchase.

      Reply
    1. Buy - Hold - Long Post author

      I think they are a pretty defensive REIT, people need to eat and Australia has some of the best quality foods to export to China and other Asian countries. I don’t see this going anywhere but up!

      Reply

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