Real estate is one of those sectors analysts are betting on for 2022. The ASX 200 Real Estate index (ASX:XRE) has had a smooth ride in 2021, delivering a decent YTD return of 15.44% to the last traded price of 3,927.3, as of 12:30 PM AEDT, 17 December 2021, and trading very close to the 52-week high of 3,981.1.
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As the vaccination drive is progressing around the world, borders are opening across economies, and early data on Omicron is suggesting that it is not as severe as the Delta variant (although more contagious), an uptrend in real estate is expected to continue next year as well. Aggressive and high risk-appetite investors are looking at a few real estate penny stocks which are trading at an attractive dividend yield and have raked in higher profits in FY21 over FY20. Let us have a look at three of them.
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- Cromwell Property Group (ASX:CMW)
Cromwell Property Group is an investment management company, having operations in Australia and New Zealand and specialising in commercial real estate. The company has a market capitalisation of AU$2.3 billion and clocked a higher net profit of AU$308.2 million in FY21, compared to AU$181.1 million in FY20.
Although the company’s shares remained flat throughout the year, as of the last traded price of AU$0.88, at 12:30 PM AEDT on 17 December 2021, they are trading at an attractive dividend yield of 7.38%. In CY21, the company declared a total dividend of AU$0.067 per share.
- Finbar Group Limited (ASX:FRI)
Finbar Group is Western Australia’s largest apartment developer, having worked on some of the luxurious apartments like Dianella apartments, Riverena apartments, etc. The real estate developer has raked in a net profit of AU$8.85 million in FY21, a healthy increase over AU$6.62 million profit in FY20.
Finbar Group has a market capitalisation of AU$224.5 million, and its share price is trading at a dividend yield of 6.9%. In CY21, the company paid a total of AU$0.04 per share in dividends. The YTD return of FRI shares is slightly negative, at 3.66%.
- AVJennings Limited (ASX:AVJ)
Founded in 1932, AVJennings is an ASX-listed residential property developer and is also listed on the Singapore Stock Exchange. The company more than doubled its net profit in FY21 to AU$18.72 million on revenue of AU$311.09 million, compared to a profit of AU$9.04 million and revenue of AU$262.35 million in FY20.
AVJ shares have delivered a return of 13.46% this year, and consequently, the market capitalisation has risen to AU$239.6 million. In CY21, the company declared a dividend of AU$0.025 per share, translating to a dividend yield of 6.1%.