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Why I bought Rural Funds Group shares



Rural Funds Group is a Real Estate Investment Trust (REIT) who own a diversified portfolio of agricultural assets in Australia and derive income from leasing those assets to experienced agricultural operators, Rural Funds Group offer an attractive 6.13% dividend yield.

As Rural Funds Group is a real estate trust their income shouldn't be too impacted by poor performance in the agricultural sector, as tenants still need to pay rent, for this reason I feel that Rural Funds Group is a fairly safe bet with a high yield dividend payout.

Here are a couple more reasons I decided to buy Rural Funds Group shares.

  1. RFF shares are trading at an almost 30% discount from its year high at $2.42

  2. Dividend yield of 6.13%

  3. RFF has recently increased its dividend
  4. Rural Funds Group is in the top 25% of dividend payers in Australia (5.6%)
  5. Stable management with the average tenure of 9.6 years
  6. Tenants still need to pay rent regardless of an underperforming sector.

Some things to consider about Rural Funds Group

  1. Debt is quite high at 60% however this is how REITS operate and a low interest rate environment might be good for RFFs investments.


As I continue my investment journey and build my stockpicking toolbelt this analysis will continue to become more detailed.

Rural Fund Group's dividend


At the time of consideration Rural Funds Group pays a 6.13% or 11 cents per share dividend, now with an investment of $1500 that nets you about $95, compare that to my bank account that currently pays 1.6% pa or $24 with $1500 in savings.

Rural Funds Group currently has a payout ratio of 82% with a future payout ratio of 81% and it's future cash flow value more than covers future dividend payouts.



Need another opinion? Check out the Motley Fools thoughts on RFF 


Those are my thoughts on Rural Funds Group, if you have any thoughts on Rural Funds Group shares feel free to leave a comment below.

Please note that this article should not be considered as investment advice, you can read the full disclaimer at our Site Disclaimer Page.

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