Henderson Far East Income Limited Edison issues review on Henderson Far East Income

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Henderson Far East Income Limited

07 June 2019

London, UK, 7 June 2019

Edison issues review on Henderson Far East Income (HFEL)

Henderson Far East Income (HFEL) continues to reward its investors with a c 6% dividend yield, fully covered by revenues and growing year-on-year (4.9% CAGR over five years), as well as capital growth (total returns of c 8-14% a year over three, five and 10 years). Manager Mike Kerley notes that payout ratios across the Asia-Pacific region are increasing, supported by the strong cash position of many companies, although at an index level it is hard to observe the improvement, because of the huge growth of non-yielding Chinese internet stocks. The manager holds a relatively concentrated (c 50 names) portfolio of stocks that are broadly evenly split between those with a high starting yield and those offering good dividend growth prospects, and are diversified by sector and geography.

At 6 June 2019, HFEL's shares traded at a 1.4% premium to cum-income NAV. On average the shares have traded at a premium over one, three, five and 10 years. HFEL regularly issues shares to meet demand and control the premium, yet it has still consistently managed to cover its dividend, grow the distribution year-on-year, and transfer money into its revenue reserve, in spite of having to spread its income (current yield of 6.3%) over an ever-increasing share base.

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June 07, 2019 11:08 ET (15:08 GMT)