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Genesis Energy

High dividends from diversified energy model

QuickView | Utilities | 31 Oct 2018

Genesis Energy leverages its diversified energy business model to generate attractive shareholder remuneration, with Bloomberg consensus estimates implying an FY19e dividend yield of 7.2%, towards the top end of utilities globally. The company has a strong track record on delivering attractive remuneration to shareholders and on generating enough cash flow to cover dividend payments.

Genesis Emerging Markets Fund

Emerging markets specialist, unloved asset class

Initiation | Investment trusts | 30 Oct 2018

Genesis Emerging Markets Fund (GSS) was launched in July 1989, making it one of the first emerging markets funds to be listed in the UK. It seeks to generate long-term capital growth, primarily through investing in emerging and frontier markets equities. With few constraints relative to the benchmark MSCI Emerging Markets index, the investment approach is bottom-up and focused on high-quality companies that trade on reasonable valuations. The manager believes income convergence with developed economies, and a rapidly growing middle-class, creates compelling long-term opportunities for the asset class. In the nearer term, the manager is finding attractive entry points for investments following a c 20% correction of the benchmark index since January 2018. The board has recently increased its efforts to promote GSS, including a resumption of distributions, while a tender offer was successfully completed in August 2018. The fund’s 13.5% discount to cum-income NAV is at the lower end of the peer group range, suggesting there is scope to narrow over time.

Genesis Energy

Executive interview - Genesis Energy

Edison TV: | Utilities | 24 Sep 2018

is an energy company involved in the generation of electricity, retailing and trading of energy, and the development and procurement of fuel sources. The company operates through four segments: customer experience, energy management, oil and gas, and corporate. The customer experience segment is engaged in supplying energy (electricity, gas and liquefied petroleum gas [LPG]) and related services to end-user customers. The energy management segment is engaged in generating and trading electricity and related products. It includes electricity sales to the wholesale electricity market, derivatives entered into to fix the price of electricity, and wholesale gas and coal sales. The oil and gas segment is engaged in the exploration, development, production and sale of gas, LPG and light oil. The corporate segment is engaged in new generation investigation and development, fuel management, information systems and property management, among others.

Genesis Energy

It is all about free cash flow

Update | Utilities | 02 Oct 2014

Genesis Energy's (GNE) FY14 results were ahead of the March 2014 prospective financial information (PFI) in terms of earnings, dividend and cash flow, but undershot in terms of revenue and customer numbers. The outlook for the sector is ‘benign' with little revenue growth forecast and earnings growth expected to come primarily from lowering operating costs over the next few years. GNE and the sector will generate considerable free cash flow between now and FY18, which will largely be paid out to shareholders via dividends. Our valuation is now NZ$2.21/share, underpinned by the company's strong free cash flow position.

Genesis Energy

Cash 'n Kupe - a great combination

Initiation | Utilities | 31 Mar 2014

The New Zealand government is selling up to 49% of Genesis Energy (GNE) via an IPO at an offer price of NZ$1.55. The offer is supported by a strong gross dividend yield, projected to be 11.5% for FY14 and 14.3% for FY15. GNE's 31% stake in the Kupe oil and gas field provides a diversification of earnings away from the domestic electricity sector and a source of potential value uplift in the medium term. Downside risks relate primarily to the Labour/Greens NZ Power proposal, which we believe has a low chance of implementation, although 2014 is election year. We conclude a fair value range of NZ$1.79 to NZ$1.97 for GNE with a mid-point valuation of NZ$1.88, a 21.3% premium to the offer price.

Utilico Emerging Markets Trust

Infrastructure and utilities in growth markets

Initiation | Investment trusts | 03 Oct 2013

Utilico Emerging Markets (UEM) is a closed end investment company investing in utilities, infrastructure and related companies in emerging markets. Unusually among funds investing in this area, it offers a yield of over 3%, reflecting investment in cash-generative businesses. Following a period of weakness for emerging markets earlier this year, investors may wish to consider using UEM to gain exposure to companies that are integral to the development of these long-term growth markets.