Last checked at 26 Nov 2020 15:01
London, UK, 26 November 2020
Edison issues review on The Merchants Trust (MRCH)
The Merchants Trust (MRCH) has been managed by Simon Gergel at Allianz Global Investors (AllianzGI) since 2006. He is continuing to find interesting opportunities in the UK market, seeking high-quality, reasonably valued companies with attractive dividend yields. The manager says we are 'past the worst' in terms of dividend cuts in the wake of the coronavirus pandemic, with many companies reinstating their payments. MRCH has sufficient revenue reserves to be able to build on its record of 38 years of consecutive annual dividend growth. As shown in the chart below, the trust offers a consistently above-market dividend yield.
MRCH's discount to NAV narrowed in the fourth quarter of 2018, and notwithstanding a period of volatility during the stock market sell-off earlier in 2020, has essentially maintained its higher valuation. The current 0.3% share price premium to cum-income NAV compares with a range of an average 0.7% premium to a 3.1% discount over the last one, three, five and 10 years. MRCH has a progressive dividend policy and currently offers a 6.3% yield.
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