OMSP1: Swiss real estate leader Allreal joins the portfolio

The Obermatt Swiss Pearls (OMSP1) portfolio just underwent its monthly review process. As a result of this analysis, Allreal, a leading Swiss real estate company, was added to the portfolio's holdings, while Swissquote was removed. This decision was based solely on the Obermatt 360° View, our ranking system that takes all of our ranks into consideration when assessing a company's investment potential. At the time of review, Allreal's 360° View at 58 was significantly stronger than Swissquote's at 7.

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Allreal manages a diversified portfolio of commercial and residential properties across Switzerland. Additionally, their Projects & Development division focuses on growing their holdings through development and construction of new real estate projects. This diversification and growth potential can benefit investors seeking a combination of income generation and capital appreciation over time.

As of mid-June, Allreal boasts a dividend yield of around 4.6%. This translates to regular payouts for investors, making it attractive for income-focused investors and the OMSP1 portfolio. Additionally, Allreal's history of increasing dividends indicates a degree of financial stability, which is desirable for income generation and long-term investing.

While Allreal presents attractive qualities, it's important to acknowledge some potential drawbacks. It’s worth noting that Allreal's business is concentrated exclusively in Switzerland and a downturn in the Swiss real estate market could negatively impact their property values, rental income, and overall performance. Also, changes in interest rates can affect the value of real estate investments. Rising interest rates could lead to a decrease in property values and rental income for Allreal.

Overall, Allreal offers an attractive dividend yield and a history of stability, making it a potentially good option for the income-focused OMSP1 portfolio. However, the dependence on a single market require consideration, especially for investors with a longer-term horizon that includes capital appreciation goals.