I don't think the forecast revision is particularly dramatic. Vonovia is now trading at such a low price that a lot of the negative news has already been priced in. If you expect interest rates to fall again in the medium term, then it's definitely worth buying in here. My cost basis is just over 18 euros. Until I see at least a 50% gain here, I’m happy with the 6% dividend 😊
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@Part_Time_Joe except that the 6% dividend isn't guaranteed, there's no prospect of interest rates falling in the medium term, and even at today's price, 2% minus 2% is...
I agree with you—it really can’t go much lower than this. But looking only at the NAV discount is misleading, because there are likely still significant write-downs lurking on the books. The only positive thing here is the rental outlook. Everything else is a disaster from a financial perspective.
I agree with you—it really can’t go much lower than this. But looking only at the NAV discount is misleading, because there are likely still significant write-downs lurking on the books. The only positive thing here is the rental outlook. Everything else is a disaster from a financial perspective.
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•@Keineui Why wouldn’t the 6% be secure? Profits for next year are projected to be on par with this year’s. I estimate that a similar dividend can be expected accordingly.
The write-downs are already priced in at the current share price. Otherwise, we wouldn’t have such a huge discount, especially since it’s irrelevant as long as Vonovia has no plans to sell the apartments.
As for interest rates, I don’t believe we can afford this level of interest rates in the long run from a macroeconomic perspective (keyword: sovereign debt crisis). My expectation is that rates will stabilize at a moderate level and that higher inflation will be accepted as a means of reducing debt. So, in the long term, this is generally good for real asset investments.
The write-downs are already priced in at the current share price. Otherwise, we wouldn’t have such a huge discount, especially since it’s irrelevant as long as Vonovia has no plans to sell the apartments.
As for interest rates, I don’t believe we can afford this level of interest rates in the long run from a macroeconomic perspective (keyword: sovereign debt crisis). My expectation is that rates will stabilize at a moderate level and that higher inflation will be accepted as a means of reducing debt. So, in the long term, this is generally good for real asset investments.
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•@Part_Time_Joe To me, a focus on securing liquidity sounds like there might be lower dividends in the future. But we'll see.
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•@Keineui I attributed that more to the reduced or suspended investments. In any case, they've put a capable person at the helm as CEO. He did a great job both as CFO at SAP and at Vodafone! :)
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@Part_Time_Joe I agree; the "sentiment" indicator for Vonovia has been pushed way into negative territory. Lucky for me, because I was able to buy one euro for 50 cents here. Thanks to the former SED, as well as the Greens and the SPD, for making this price plunge possible in the first place.
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