Goodman Earnings: Better Than Guidance but Securities Still Look Expensive

Narrow-moat Goodman Group’s fiscal 2024 results were broadly in line with our expectations. Operating earnings per security grew 14% to AUD 107.5 cents, up from AUD 94.3 cents last year, above guidance of an 11% increase. Unfranked distributions of AUD 0.30 per security were flat year on year. The company guides to operating earnings rising 9% in fiscal 2025, and our estimate of AUD 1.17 is in line. However, guidance is for distributions per security to be unchanged at AUD 0.30, which equates to a forward yield of less than 1%. Payout ratios will likely remain low in the near term, given the large development pipeline.