I Bought A Pub; Recent Investment June 2017

June just started and I already did my first investment. And to be honest this company was not on my watch list at all, I just came across it an article about stocks you should own your entire life. Most of them I already knew and I actually have them in my portfolio. But I did not know Greene King, it owns several pubs and restaurants in the UK and has an impressive dividend history, and it is also my first British stock.

Company Overview

Greene King plc. is an integrated pub retailer and brewer. The Company operates, tenanted, leased and franchised pubs, restaurants and hotels, including brands, such as Hungry Horse, Chef & Brewer, Flaming Grill, Farmhouse Inns and its Greene King locals estate. The Company’s segments include Pub Company, Pub Partners, and Brewing & Brands. The Company’s ale brand portfolio includes Old Speckled Hen, Greene King IPA, Abbot Ale and Belhaven Best. The Pub Company segment operates approximately 1,820 pubs and restaurants across Britain. Currently it pays a yearly dividend 0.326 GBP per share that makes it a yield of 4.37%.

Stock analysis

After the Brexit vote the share price of GNK suffered a lot, its 5 year high was at 9.68 GBP in the beginning of 2016, currently, it trades at 7.45 GBP, that means the current price is around 23% below the 5 year high. At the same time revenue almost doubled in the last 5 years and EPS grew from 0.49 GBP in 2011 to 0.64 GBP in 2016, that is an average annual increase of 5.5%. In the same period, the dividend was increased from 0.23 GBP to 0.30 GBP, which makes it an average increase of as well 5.5% per year. As you can see the payout ratio is also still on a healthy level, around 50%.

Looking at the current valuation the stock looks also undervalued.

Stock_Valuation GNK

As probably most the of the British stocks, GNK had to suffer because of the Brexit vote, but this makes it currently an attractive investment for me.

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Disclosure: Long GNK.

Disclosure: I do not recommend any decision to the reader or any user, please consult your own research. Thank you for your understanding.

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