Fund Manager Summary
The fund managers believe that the outlook for APA Group presents a significant opportunity, particularly with its position as Australia's largest owner of energy infrastructure, which includes natural gas pipelines and storage assets. In their opinion, the recent diversification into gas fired generation and electricity transmission enhances growth potential. They are particularly attracted to APA's dividend yield of approximately 7%, which they expect to grow by 2-5% per annum until FY30. The fund managers are optimistic that the resolution of concerns regarding a potential equity raise has cleared the path for APA to pursue its development pipeline, ensuring the sustainability of multi-decade dividend streams.
Source: Trading View
Commentary From The Managers
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Endeavor Asset Management
30 Apr 2025
$8.22
Summary
- Endeavor Asset Management initiated a new investment in APA Group, recognizing it as Australia's largest owner of energy infrastructure.
- APA Group owns natural gas pipelines and storage assets, and is diversifying into gas-fired generation and electricity transmission.
- The fund manager is attracted to APA's dividend yield of approximately 7%, with expectations for growth of 2-5% per annum through FY30.
- Endeavor Asset Management believes the market has moved past concerns regarding a potential equity raise that previously affected APA's share price.
- This clarity allows APA to focus on executing its development pipeline, which is expected to support sustainable multi-decade dividend streams.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Endeavor Asset Management
30 Apr 2025
$8.22
- Endeavor Asset Management initiated a new investment in APA Group, recognizing it as Australia's largest owner of energy infrastructure.
- APA Group owns natural gas pipelines and storage assets, and is diversifying into gas-fired generation and electricity transmission.
- The fund manager is attracted to APA's dividend yield of approximately 7%, with expectations for growth of 2-5% per annum through FY30.
- Endeavor Asset Management believes the market has moved past concerns regarding a potential equity raise that previously affected APA's share price.
- This clarity allows APA to focus on executing its development pipeline, which is expected to support sustainable multi-decade dividend streams.
Summary
BKI Investment Company
31 Mar 2025
$7.90
- APA Group has reported strong financial results, with revenue increasing by 7.1% to $1,364 million.
- EBITDA growth of 9.1% to $1,015 million driven by newly acquired assets and increased customer demand.
- Performance boosted by inflation-linked tariff increases and effective cost management.
- Strategic long-term investment in the Pilbara Energy System is crucial for powering regional mining operations.
- Ongoing investments aim to deliver critical infrastructure projects to meet growing energy demands in the Pilbara.
- APA's capital investment reached $339 million in the first half of FY2025, focusing on growth projects.
- Completed projects include the Port Hedland Solar and Battery project and the Kurri Kurri lateral pipeline project.
- Future growth projects include the Sturt Plateau Pipeline and expansion of the East Coast Gas Grid.
- Free Cash Flow rose to $552 million, supporting an Interim Distribution of 27.0cps.
- Final Distribution guidance for FY2025 is 30cps, reflecting management's focus on shareholder wealth creation.
- BKI Investment Company continues to hold a 4.9% portfolio weight in APA, indicating an overweight position compared to the index.
Summary
Tyndall Asset Management
31 Mar 2025
$7.90
- APA Group outperformed again in March, showcasing its strong defensive characteristics.
- Increased investor interest in defensive assets due to uncertainty created by US trade policy.
- Tyndall Asset Management continues to hold its position in APA Group, reflecting confidence in its resilience.
Summary
Wilson Asset Management
31 Mar 2025
$7.90
- APA Group is a leading energy infrastructure business managing a $27 billion portfolio of gas, electricity, solar, and wind assets.
- The company delivered strong FY2025 half year results in February, with positive momentum continuing into the current period.
- Market concerns regarding its balance sheet have been alleviated, with management providing reassurance about sufficient funding.
- Funding supports dividends, committed pipeline of projects, and additional growth opportunities.
- APA Group is well positioned in the current environment, offering a highly defensive investment profile due to contracted capacity and CPI-linked revenue streams.
Summary
BKI Investment Company
30 Sept 2024
$7.76
- APA delivered a strong FY24 EBITDA growth of 10%, reaching $1.89 billion, aligning with consensus forecasts and guidance.
- Growth was supported by the east coast gas expansion and an 8-month contribution from the acquisitions of Pilbara Energy and Bass Link.
- Corporate cost growth was below guidance, positively impacting profits.
- APA is recognized as a high-quality business with a strong market share position in Australia.
- Distributions are paid from Free Cash Flow, ensuring they are well covered rather than reliant on statutory EPS.
- FY25 distribution forecast is set at 57cps, an increase from 56cps in FY24.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With a promising dividend yield and a diversified growth strategy, it seems APA Group is positioned to capitalize on its clean air for development. Investors may find this infrastructure player a compelling long-term hold as it navigates the evolving energy landscape."
Last Updated: 30 Apr 2025
Query The Data
Frequently Asked Questions
Who is investing in APA Group (ASX:APA)?
Fund managers including Endeavor Asset Management, Wilson Asset Management, BKI Investment Company and Tyndall Asset Management have invested in APA Group (ASX:APA).
Why do fund managers invest in APA Group?
Fund managers are investing in APA Group due to its position as Australia's largest owner of energy infrastructure, including natural gas pipelines and storage. The company is diversifying into gas-fired generation and electricity transmission, which enhances its growth potential. With an attractive dividend yield of approximately 7% and expected annual growth of 2-5% through FY30, APA is seen as a stable investment. Recent clarifications regarding its balance sheet have alleviated market concerns, allowing the company to focus on its development pipeline and sustain long-term dividend streams.
What happened to APA Group (ASX:APA)?
There have been no recent updates from fund managers regarding APA Group although fund managers including Endeavor Asset Management, Wilson Asset Management, BKI Investment Company and Tyndall Asset Management have previously commented.