Q: thinking about selling my tve and buying wcp. tve has a low yield, what has better upside?
Thanks
Auftar
Thanks
Auftar
5i Research Answer:
We are comfortable owning both, as we don’t think TVE having a lower dividend yield than WCP is a reason to sell, as TVE prefers to return capital to shareholders through buybacks. For instance, TVE has a buyback yield of 3.6% on a trailing-twelve-month basis, while WCP only bought back 1%. Overall, WCP has a total yield (dividend + buyback) of 5.6%, while that number for TVE is 5.1%.
For upside potential, we think TVE may have a better chance to outperform given its pure focus on capital appreciation.