While we know that investors looking at income stream are always on the watch for diverse stocks that can pay sustainable dividends; and given this backdrop, 2 income stocks that are good to watch in this regard include Qantas Airways Limited and Suncorp Group Limited.
Qantas Airways Limited (ASX: QAN) is under industrial sector, and its stock was trading at a market price of $6.805 with a daily price change of $0.015 and a percentage change or rise of 0.221% as at July 31, 2018, post market open. The annual dividend yield for the stock is 2.06%. Qantas performance is dependent on its cash flows that are in a decent shape while the oil price scenario has been a bit volatile. Further, cash tax payments that have been indicated for FY19 and onwards are raising some concerns. Dividends supported with cash flows give a better sustainable yield and the group aims to benefit from its domestic revenue despite the challenges laid ahead. Then, replacing old planes with new ones can be an important move from the perspective of future performance. The group lately ordered 6 additional 787-9 Dreamliners for delivery by the end of 2020. QAN stock has moved up 27.6% in one year given the developments and consistent performance over the last few years. The group has also been working on its board succession plan and lately Leigh Clifford has announced to step down while Richard Goyder will assume the role in October.
Suncorp Group Limited (ASX: SUN), the insurance player was trading at a market price of $14.780 with a daily price change of -$0.30 or a percentage decline of -1.989% as at July 31, 2018, post market open. The annual dividend yield for the stock is 4.83% which is fully franked. The most recent dividend was of 33c with dividend ex-date as February 21, 2018 and dividend pay-date as April 05, 2018. The stock has seen a performance change of 5.53% over the past 12 months. The company will soon announce the full-year results and the questions are raised whether the lid will be on costs, by the CEO Michael Cameron. A strong performance is expected in general insurance and a moderate outlook in banking. The ordinary dividend/distribution franked amount per security is expected to be around AUD 0.996600 with dividend ex-date as August 31, 2018, record date as September 3, 2018 and dividend payment date as September 17, 2018. The key aspect is that the group’s credit quality has been improving over the years and the group is all geared up for positive reforms in banking sector given the funding mix, growth in deposits, sound credit quality and strong customer base. With this, the group is targeting cost to income ratio for FY19 of 50% while impairment losses are anticipated to stay below the lower end of operating range of 10 to 20 bps of gross loans and advances.
While the dividends might not look exorbitantly high, the sustainability is what that matters and these stocks become key to watch in view of the upcoming reporting season in light of dividend payments.
[pluginops_form template_id=’23834′ ]
The Income available from dividends remains attractive for many investors.
We take a look at the best yields on the market and assess what they say about a company’s prospect.
One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”
ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.
Click here to get your free report.
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.