Financial advisor Martin Hawes thinks shares in Mighty River Power, which is the first state-owned energy company to be partially floated, should be a good buy.
In an email to investors he writes:
Quite a few people are saving their pennies at the moment knowing that Mighty River Power is coming up for partial sale soon. The word is that Government is very keen for this to be a success and although the shares will not be given away cheap (neither they should!), they should represent good buying.
I have heard from various people that the price will be at a level that will give a dividend yield of 6% and some have even said 7%. Given where interest rates are at the moment that would represent fairly good value. The company is not without risk (what is?) but a company that provides green, renewable energy should be in demand. It will depend on price but you should be ready to buy some shares …
A dividend yield of around 6%, would beat money in the bank at current rates and would be a far safer investment than finance companies.
Homepaddock 