A New Addition To My SG Dividend Portfolio- New Advisor (CLAST-费祎)

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In my previous post, I associated my shares in my SG Dividend Portfolio with the various advisors of Shu in the "Three Kingdoms".  After much deliberation, I decided to expand my portfolio with a tinge of diversification by adding a counter into my portfolio.  Many will think that this is not much of a diversification, as it is a business trust, but I see it as a form of diversification as it is involved in the hospitality industry, which is something that I do not own in my REITs portfolio.  This counter is none other than Capitaland Ascott Trust (CLAST-费祎).


I decided to add one more counter to my portfolio to reduce the weightage of some shares.  CapitaLand Ascott Trust has always been in my list, but I have yet to include it in my portfolio as previously when my capital was lower, too many shares will cause the little capital I have to be spread out too thinly.  Currently when the portfolio market value (including realized profits from partial sale of some shares) is above SGD 500K, I think it is a good time to include another counter.

I like CLAST for a few reasons:

1)     Low Price to Book Ratio of <0.80, indicating it is undervalued (slightly higher than CDL Hospitality Trust and Frasers Hospitality Trust).  

2)     High Interest Coverage Ratio of >4, indicating that it can service it's debt without much issues (CDL Hospitality Trust and Frasers Hospitality Trust has lower interest coverage ratio of between 3 to 4).

3)     Dividend Yield of >5.5%, not an exceptionally high dividend yield, but it is a comfortable yield I would like to include in my portfolio (CDL Hospitality Trust and Frasers Hospitality Trust has lower dividend yield of <5%).

4)     Low Cost of Borrowing of <2.5% (CDL Hospitality Trust has borrowing cost of 4.1% while Frasers Hospitality Trust has borrowing cost of 2.9%).

5)     I like the inclusion of student's accommodation in CLAST's portfolio.

6)     Recovery of tourism worldwide will continue to boost the earnings of hospitality trusts.  I know I am about 3-6 months late, but better late than never.

7)     It is the biggest hospitality trust listed on SGX in terms of market capitalization, and although having Temasek Holdings as its largest shareholders does not mean it is the safest Trust, it is no doubt a blue chip, and for now I am pleased to own it after looking at all its metrics.

So, I am happy to include CLAST into my SG Dividend Portfolio, and will continue to accumulate the shares below SGD 1.  May this investment pay off in the long term and contribute to my dividend compounding process.  Barista FIRE, here I come...!

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