Westfield (WFD.ASX) reported 1H16 earnings of $715m at the EBIT line and FFO of $342m or $0.165 cents per share. FY16 guidance remains around $0.34 cps
WFD trades on a high multiple and a forward yield into FY17 of 3.4%. For this reason, we see the stock fully valued but attractive due to it’s high quality asset base and $7b+ development pipeline.
Add a Dec covered call to enhance the yield.
We’re adding WFD.ASX to the model portfolio as an income trade. Buying today at $10.55 and selling an $11 November call option. A combination of the $0.18 August dividend and the $0.32 for the call option, generates approximately 5% cash flow for 4 months exposure. If exercised, the return increase to almost 10%.
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