Defensive Stocks are unique in the way that they provide a hedge to investors at the times of volatility. Best Defensive Stocks tend to remain stable at the times of uncertainty. Slowing economic growth and geo political tensions are the most valid reasons to indulge in Best Defensive Stocks to Buy.
GPT Group (ASX: GPT)
The GPT Group, on 21 June 2024 reported an estimated distribution for the six-month period ending 30 June 2024, amounting to 12.0 cents per ordinary stapled security.
In the March quarter, GPT Group displayed robust performance across its diversified investment portfolio, affirming its strong market position. Becoming one of the Top Defensive Stocks, its overall portfolio maintained a high occupancy rate of 98.2%, underscoring the attractiveness and quality of its properties. Notably, the Retail portfolio achieved exceptional metrics with a 99.6% occupancy rate and a solid 4.8% increase in center sales growth compared to the previous year's March quarter, reflecting positive consumer engagement and operational resilience.
Meanwhile, the Office portfolio reported a 92% occupancy rate, inclusive of heads of agreement, with 33,700 square meters leased during the quarter. This segment demonstrated effective leasing strategies amid market conditions, supported by a Weighted Average Lease Expiry (WALE) of 4.9 years. The Logistics portfolio also performed strongly, boasting a 99.5% occupancy rate and securing leases for 20,500 square meters. Furthermore, GPT's strategic developments in logistics added substantial prime grade assets, reinforcing its footprint in the logistics sector.
For the year ended on 31 December 2023, GPT reported Funds from Operations (FFO) of $600.9 million, aligning with guidance but slightly lower than the previous year due to increased interest rates. Distributions to Securityholders totaled $478.8 million, translating to an annual distribution of 25.0 cents per security, with a payout ratio of 96.0% of free cash flow. The year ended with a statutory net loss after tax of $240.0 million, largely impacted by a net investment property valuation decline of $819.0 million.
Portfolio occupancy stood strong at 98.2%, supported by robust Retail and Logistics segments benefiting from favorable trading conditions. The Office segment, however, faced challenges with elevated vacancies post lease expiries. Gearing remained conservative at 28.3%, within the targeted range of 25% to 35%, and the debt maturity profile was managed prudently with a weighted average term to maturity of 5.9 years as of December 31, 2023.
Considered as one of the Best ASX Defensive Stocks, GPT maintained high hedging levels throughout the year, ensuring 96% hedging of its interest rate exposure into 2024. Assets under management reached $35.3 billion, comprising a $12.9 billion balance sheet portfolio and approximately $22 billion managed for external clients through its Management Platform.
Credit Corp Group Limited (ASX: CCP)
In the fiscal year that ended on 20 June 2024, Credit Corp Group Limited experienced notable developments across its business segments.
Despite strong demand, settled volumes in the final quarter fell short of expectations.
The consumer loan book saw robust growth, increasing by 24% to achieve a record gross closing balance of $445 million. Similarly, the lending segment recorded an 18% rise in net profit after tax (NPAT).
However, the company reported challenges as well. Underlying NPAT declined by 11% compared to the previous year, amounting to $81.2 million for FY24.
Despite these financial fluctuations, Credit Corp's US operations showed improvement in the final quarter, achieving a record quarterly collection rate that was 6% higher than the previous comparable period, despite a decrease in purchasing activities.
Credit Corp Group Limited anticipates steady financial performance from FY 2025 to FY 2027 across key metrics. The PE ratio is projected to decline gradually from 12.23x in FY 2025 to 10.89x by FY 2027, indicating a more favorable valuation relative to earnings growth.
Source: Company’s Report
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