Stock Watch - Stock Picks — Fortress B and Nike

Nick Crail from Ashburton Investments chose Fortress REIT Ltd B as his stock pick of the day and Bright Khumalo from Vestact chose Nike Inc.

Crail said: "I'm going to go for a local stock with a high dividend yield and that is Fortress B, a property share. You have the A and B shares, the A shares effectively guarantee a 5% increase in dividend on an annual basis. The B shares are the ones that take the beating should the overall company not have the ability to pay that out. But when having a look at that share at the moment, if consensus is right and you see the B shares actually growing their dividend next year, it could be around 18% dividend yield on a forward basis. If you even think that dividend is going to be cut by 20%, it is still on a forward dividend yield of 13%. Assets themselves are I think good quality and certainly I just think it is at the right price and something to get invested in.

Khumalo said: "I'm going with Nike, last week Thursday they released the Q1 numbers for the 2020 financial year. I like the fact that Nike direct is doing well. What do all luxury companies have in common? They all control their supply chain so that they can control the experience to the people. Apparently in New York, the Nike store experience is just amazing, you don't even need a card or cash to pay, you go onto the app to shop and the quality of the items is guaranteed to be better than the competitor. Nike direct is growing double digits as everyone is going online. As a result the underlying businesses are seeing more margin expansion."