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Is Now the Time to Buy Capital Shopping Centres Group plc (CSCG)?

LONDON — I’m always searching for shares that can help ordinary investors like you make money from the stock market.

So right now I am trawling through the FTSE 100 and giving my verdict on every member of the blue-chip index. Simply put, I’m hoping to pinpoint the very best buying opportunities in today’s uncertain market.

Today I am looking at Capital Shopping Centres Group plc (LON:CSCG) to determine whether you should consider buying the shares at 362 pence.

Capital Shopping Centres Group plc (LON:CSCG)

I am assessing each company on several ratios:

Price/Earnings (P/E): Does the share look good value when compared against its competitors?

Price Earnings Growth (PEG): Does the share look like a good value factoring in predicted growth?

Yield: Does the share provide a solid income for investors?

Dividend Cover: Is the dividend sustainable?

So let’s look at the numbers:

Stock Price 3-Yr. EPS Hrowth Projected P/E PEG Yield 3-Yr. Dividend Growth Dividend Cover
Capital Shopping Centres 362p 9% 22.2 N/A 3.8% -9% 1.1

The consensus analyst estimate for next year’s earnings per share is 16.3 pence (1% decline) and dividend per share is 15.1 pence (1% growth).

Trading on a projected P/E of 22.2, Capital Shopping Centres appears to be slightly cheaper than its peers in the retail investment trust sector, which are currently trading on an average P/E of around 23.4.

Unfortunately, Capital Shopping Centres’ P/E ratio and falling near-term growth rate give a negative PEG ratio, which cannot be of any help with my analysis.

Offering a 3.8% yield, the group’s dividend supplies the same income as the retail investment trust sector average. However, Capital Shopping Centres has seen its dividend fall a compounded 9% over the past three years, implying the yield could soon begin to lag that of its peers.

Furthermore, the dividend is only just covered by earnings and does not give Capital Shopping Centres much room for further payout growth.

Growth is stagnating, but should you buy for its yield?
Capital Shopping Centres is the owner of 15 shopping centres throughout the U.K., which leaves the company very exposed to the U.K.’s frail retail environment.

That said, within its interim report released last November, Capital Shopping Centres reported that 60 new stores had opened recently within its shopping centres — taking the overall occupancy level to 96%.

In addition, the company reported that footfall figures within its shopping centres had continued to remain flat.