Turners (TNR) bonds

[Snoopy]

Are they still the compelling investment that I believed the TNRHA bonds were two years ago? Let's see.

From an income perspective, I always like to compare the gross dividend an investor would receive if they held the shares with the equivalent bond yield.

	TNRHA	TNRHB
Bond Coupon Rate at Issue	9.0%	6.5%
TNR equivalent share price (one month before bond issue)	$2.50	$3.02
TNR equivalent dividend (adjusted for 10:1 share consolidation)	4c + 6c = 10c (actual gross)	3c + 3c +3.5c +3.5c = 13c (forecast net) or 18c (forecast gross)
Gross Share Yield	4.0%	6.0%

Helped by imputation credits from the shares beinhg available from late FY2016 on, the gap between income form the bonds and income from the shares has closed considerably. Because not all of the profits are paid out as dividends (policy is a 50-55% payout ratio), we can expect the retained earnings to grow profits over time. As the profits trend up, then so should the share price. OTOH the bond price will not change if held until maturity two years away. IMO the balance has now tipped towards buying the shares, not the bonds, from an overall investment perspective.

SNOOPY