Coalfield Resources PLC Surges 50%, But Is It Better Than British Land Company PLC, Land Securities Group plc And Capital & Regional plc?

Is Coalfield Resources PLC (LON: CRES) a more enticing investment than British Land Company PLC (LON: BLND), Land Securities Group plc (LON: LAND) and Capital & Regional plc (LON: CAL)?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Shares in Coalfield Resources (LSE: CRES) have risen by 50% today after the company announced it will purchase the 75.1% stake in Haworth Estates that it does not already own, for £150m. Coalfield Resources, which was previously the parent company of UK Coal but is now a pure-play property company, will raise £115m of the funds via a placing, with the remainder of the £150m being paid for via shares in the new entity.

This is positive news for Coalfield Resources, since the price paid for the stake represents a near-20% discount to the net asset value of Haworth Estates. It also means that the seller of the 75.1% stake in Haworth Estates, the Pension Protection Fund, will become a 25% shareholder in the new entity. And, with Coalfield Resources set to change its name to Haworth Estates PLC, this could be the start of a more prosperous period for investors in the new entity, with it having delivered relatively disappointing share price performance in recent years.

Industry Peer

Of course, the UK property market has enjoyed a relatively prosperous period of late, with results released today by shopping centre operator Capital & Regional (LSE: CAL) highlighting that the sector could be enjoying a purple patch. For example, Capital & Regional has seen its property portfolio valuation rise by £36.9m in the last year, which has contributed to its bottom line rising from £7.5m in 2013 to £67.2m in 2014. This has allowed it to increase its dividend by 46%, so that even after today’s 7% rise in its share price, Capital & Regional still yields an impressive 4.2%.

Looking Ahead

However, neither Capital & Regional nor Coalfield Resources offers the size, scale and stability of British Land (LSE: BLND) and Land Securities (LSE: LAND). And, while their yields may be lower than that of Capital & Regional at 2.6% (Land Securities) and 3.4% (British Land), they offer much more consistency when it comes to the paying of dividends, with them having been paid in each of the last five years and not being subject to a cut in that time.

Furthermore, British Land and Land Securities have remained highly profitable during the last five years, while Capital & Regional and Coalfield Resources have had loss-making periods. And, with the current favourable conditions in the property market that have been caused by an ultra-loose monetary policy unlikely to last over the medium to long term, the wider economic moats of British Land and Land Securities could make a real difference moving forward.

As such, and while Coalfield Resources and Capital & Regional are companies with bright futures, British Land and Land Securities appear to be the better investments at the present time.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of British Land Co and Land Securities Group. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »