3D’s of Stocks’ Investing Strategies – Diversification, Dividend-Payments & Defensive Nature: BHP, BKW, JBH, KGN, COL

  • May 11, 2020 AEST
  • Team Kalkine
3D’s of Stocks’ Investing Strategies – Diversification, Dividend-Payments & Defensive Nature: BHP, BKW, JBH, KGN, COL

At the time when the market is highly volatile, market participants always look for such stocks that have the potential to generate a consistent return. They look for players which have past dividend record and greater financial stability as compared to others.

While planning investment strategies, people try to diversify their portfolio based on their risk appetite to reduce the probability of losing their money. When the market is bearish, participants can get the stocks of some big players at a lower price.

In this article, we have filtered out the stocks of five different ASX-listed companies and will discuss their businesses or brands, their dividend history, and their present and past performance.

BHP Group Limited

Headquartered in Melbourne, BHP Group Limited (ASX: BHP), is a dual listed world-leading resources company. It is in the business of extracting as well as processing minerals, oil, and gas. The products manufactured by the company are sold globally.

BHP Businesses:

These businesses are of low-cost and produce superior products & have strong development potential. Let discuss about them:

Minerals Australia: It comprises of operated assets in Queensland, Western Australia, South Australia, and New South Wales. The focus of this group is on copper, iron ore, coal, and nickel.

Minerals Americas: Comprises of operated & non-operated assets and projects located in Chile, Canada, Colombia, Peru, Brazil, and the US. These assets & projects concentrate on copper, zinc, iron ore, coal & potash.

Petroleum: Includes unconventional and conventional oil & gas operations. It further includes development, production, exploration as well as marketing activities in Trinidad and Tobago, Australia, and the US.

Marketing: This is an independent core business of BHP. It connects BHP’s global operations to its customers globally.

Dividend Payment History:

BHP has been consistently giving dividend to its shareholders since the past five financial years. In 1HFY2020, the company distributed fully franked interim dividend of US 65 cents.

1H FY2020 ended on December 31, 2019 Highlights:

  • Revenue from continuing operations increased by 7% to US$ 22,294 million.
  • Profit after tax from the continued operation improved by 20% to US$ 4,868 million.

 

Image Source: BHP's presentation report

 

Operational Review for 9 Months ended 31 March 2020:

  • Financial position remained strong with good numbers for first half results.
  • Strong operation performance was seen across its portfolio.
  • Production guidance for FY2020 remains unchanged for petroleum, iron ore & metallurgical coal.

 

Stock Information:

By the end of day’s trade on 11 May 2020, BHP shares settled at A$ 31.55 per share.

Brickworks Limited

Brickworks Limited (ASX: BKW) is a well know building material manufacturer of diverse nature.

BKW’s Brands:

  • Austral bricks
  • Bowal Bricks
  • Crafted Bricks and Pavers
  • Glen-Gery
  • Nubrik
  • Austral Masonry
  • GB Masonry
  • UrbanStone
  • Austral Precast
  • Bristile
  • Pronto Panel
  • Terraçade
  • Southern Cross Cement
  • Lawrenceville Brick
  • Cushwa Brick
  • Sioux City Brick
  • Glen-Gery

 

BKW’s Dividend History:

BKW has consistently provided its shareholders with a dividend for the past five years. In 1H FY2020, the company declared an interim dividend of A$ 20 cents per share fully franked.

1H FY2020 Highlights:

  • In 1H FY2020 for the period ended 31 January 2020, revenue from the continuing operations increased by 1.39% to A$448.622 million.
  • Net profit after tax from continuing operations before significant items declined 37.2% to A$ 100.293 million.
  • Net profit for the period attributable to members dropped 49.23%.

 

Image Source: BKW's report

 

Recent Update: Pennsylvania brick plants cleared for re-commencement:

On 19 March 2020, the company closed its manufacturing operations at its five Pennsylvania brick plants in response to the Governor Tom Wolf’s order to close all non-life-sustaining businesses in the state. After consulting the Governor, the company is being advised to restart the brick plant.

Outlook

Even when the situation is highly unpredictable due to Coronavirus outbreak, the Company’s diversifies portfolio and robust balance sheet to face the challenges ahead.

Interesting Read: Dividend stories amidst current turmoil - SOL, RFF, BKW

Stock Information:

By market closure on 11 May 2020, BKW shares settled at A$ 13.62 per share.

JB Hi-Fi Limited

JB Hi-Fi Limited (ASX: JBH) is the specialty retailer of home consumer products. It focuses on consumer electronics, software, whitegoods, and appliances and provides services in educational, insurance, and commercial sector with more than 300 stores in New Zealand and Australia.

JBH’s Popular Retail Brands:

  • JB Hi-Fi
  • The Good Guys

 

Dividend History:

The company has consistently provided its shareholders with dividend in the past five years. In 1H FY2020, the company announced a fully franked interim dividend of 99 cents per share.

Sales update for Q3 FY2020:

JBH released its Q3 FY2020 sales update and the impact of COVID-19 on its business on 6 May 2020.

Australian businesses update: Online business scaled:

During the COVID-19 difficulty period- The JB HI-FI Australia and The Good Guys retail stores, online and commercial businesses remain open. They continued to provide customers with the items required to work, learn, & live.

The online business scaled during the period, and it provided a high-level of customer service and on-time delivery.

New Zealand business Update:

After the introduction of alert level 4 restrictions in New Zealand, that restricted all non-essential businesses, 14 stores of JB HI-FI New Zealand were closed, online and commercial business closed on 26 March 2020. However, on 2 April 2020, the online and commercial businesses started trading with a smaller number of essential products by contactless home delivery as approved by government policy.

 

Image Source: JBH's report

 

1H FY2020 Highlights of JB Hi-FI Limited:

  • Revenue from ordinary activities in 1H FY2020 ended 31 December 2019 increased by 3.94% to A$ 3,995.2 million.
  • NPAT during the period increased by 6.55% to A$ 170.6 million as compared to the previous corresponding period.

 

Stock Information:

By the end of the day’s trade on 11 May 2020, JBH shares closed at A$ 36.12 per share.

Kogan.com Limited

Kogan.com Limited (ASX: KGN) is a portfolio of retail & services businesses which comprise of:

  • Kogan Retail
  • Kogan Marketplace
  • Kogan Mobile
  • Kogan Internet
  • Kogan Insurance
  • Kogan Health
  • Kogan Pet Insurance
  • Kogan Life Insurance
  • Kogan Travel

 

KGN’s Business Update; Generated strong Gross Sales and Gross Profit growth in Q3FY2020:

On 20 April 2020, KGN released its business update for the Q3FY2020 quarter ended 31 March 2020. The company during the period reported strong gross sales and gross profit growth during the period while successfully navigating through the considerable interruptions due to COVID-19 pandemic.

  • Active Customers by the end of the quarter was 1,809,000.
  • Gross sales improved by over 30%.
  • Gross Profit increased by more than 30%.
  • By the end of the quarter, the company has net cash of A$ 47.8 million.

 

1HFY2020 Results; Gross sales increased by 16.4% on pcp

For 1H FY2020 ended 31 December 2019, KGN registered 16.4% growth in the gross sales on pcp.

  • Revenue declined by 5.3% to A$ 219.541 million.
  • Profit after tax attributable to members increased by 20.8% to A$ 8.929 million.
  • No of active customers base increased to 1,699,000. The number increased by 10.2% on pcp.
  • Declared fully franked Interim dividend of A$ 7.5 cents per share.

 

Dividend History:

KGN has consistently provided a dividend to its shareholders since 2017.

Stock Information:

By the end of the trading session on 11 May 2020, KGN shares closed at A$ 8.36 per share.

Coles Group Limited

Coles Group Limited (ASX: COL) is an Australian retailer of products like fresh food, groceries, household goods, liquor, fuel & financial services through stores as well as online mode.

Coles Businesses:

  • Coles Supermarkets
  • Coles Online
  • Coles Liquor
  • Coles Express
  • Flybuys
  • Coles Financial Services
  • Spirit Hotels

 

Q3 FY2020 Sales Results; total sales increased by 12.4% on pcp:

For 12 weeks from 6 January 2020 to 29 March 2020, Supermarket sales improved by 13.1% to A$ 8,230 million on pcp. Liquor sales grew by 7.2% to A$ 740 million and Express (c-store) sales by 4.3% to A$ 256 million.

1H FY2020 Highlights:

For 1H FY2020 ended 5 January 2020, total revenue from ordinary activities declined by 5.7% to A$ 19,046 million as compared to 1H FY2019. EBIT increased by 60.5% to A$ 910 million on pcp. Net profit for the period was A$ 489 million, down 33.7% on pcp.

The board declared an interim dividend of A$ 30 cents per share.

Coles Dividend History:

Coles has consistently provided a dividend to its shareholders for the past two years.

Stock Information:

By the end of the trading session on 11 May 2020, COL shares closed at A$ 15.10 per share.

 


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