5 Much Talked About Stocks When It Comes to Dividends: TLS, SSM, SOL, ANZ, WAM

  • Feb 14, 2020 AEDT
  • Team Kalkine
5 Much Talked About Stocks When It Comes to Dividends: TLS, SSM, SOL, ANZ, WAM

Companies have the option of whether to re-invest their profits in the business or pay a part to their shareholders. The amount paid out of the profits to shareholders as a reward for their confidence and loyalty towards the company is known as dividend.

In general, Board of Directors (BoD) of a company makes the final decision regarding how much dividend would be paid to the shareholders. The major portion of the company’s profit is kept with them for their ongoing and future business activities, while the remaining amount is allocated to their shareholders as dividend, and are paid on a scheduled frequency, like annually, quarterly or monthly.

Usually, best dividend players are the companies with large-market cap, owing to the fact that they have more predictable profits, and they seek to boost the wealth for their shareholders. For high growth and start-up companies, it is difficult to make dividend payments, as they require the funding for growth opportunities in the future.

Let’s have a look at five good dividend paying stocks listed on ASX.

Telstra Corporation Limited (ASX: TLS)

A technology and telecom company, TLS, in addition to offering a wide range of telecom and information services, provides mobiles, pay television and internet.

TLS Releases 1HFY20 Results; Declares 8 cps in Interim Dividend

On 13 February 2020, Telstra released its half year results for FY2020 ended 31 December 2019, which are in line with guidance and market expectations.

  • Total income, on a reported basis, went down by 2.8% and stood at $13.4 billion;
  • NPAT noted at $1.2 billion, down by 6.4% year on year;
  • Underlying EBITDA for the company also went down by 6.6% and reached $3.9 billion;
  • Underlying EBITDA without the in-year nbn headwind increased by roughly $90 million;
  • Interim Dividend for the first half reported at 8 cents per share.

According to Telstra CEO Andrew Penn, the company’s performance during the first half reflects that the T22 strategy was building value and resulting in positive financial momentum.

TLS Reconfirms FY20 Guidance

  • Total income is expected to be in the range of $25.3 billion to $27.3 billion;
  • Underlying EBITDA is anticipated in the range of $7.4 billion to $7.9 billion;
  • Restructuring costs of around $300 million;
  • Capital expenditure of $2.9 billion to $3.3 billion;
  • Free cash flow after operating lease payments of $3.3 billion to $3.8 billion.

TLS Annual Dividend Yield of 2.66%

The stock of TLS was trading at $3.785 per share on 14 February 2020 (AEDT 01:11 PM), up by 0.665% from its previous closing price, with a market capitalisation of $44.72 billion. The total outstanding shares of the company stood at 11.89 billion, while its fifty-two-week low and high was noted at $3.022 and $3.978, respectively. The last three and six month return of TLS stock stood at 7.74% and -3.55%, respectively.

Service Stream Limited (ASX: SSM)

SSM is a provider of essential network services to the telecom and utility sectors, engaged in service management across all territories and states, aided by a staff in surplus of 2,200 people and access to a group of more than 3,000 expert contractors.

SSM Announces Increased Interim Dividend of 4.0 cps for 1HFY20

The company has released its financial results for the half-year ended 31 December 2019. Key highlights of the result:

  • Group EBITDA from operations noted at $58.1 million on revenue of $497.8 million, up 50% on pcp;
  • Adjusted NPAT stood at $32.3 million, up 28% year on year;
  • Adjusted EPS grew by 14% to 7.96 cents;
  • OCFBIT of $32.8 million with profit to cash conversion in line with expectation;
  • Board declared an increased interim dividend (fully franked) of 4.0 cents per share, scheduled for payment on 19 March 2020.

SSM Annual Dividend Yield at 3.97%

The stock of SSM was trading at $2.375 per share on 14 February 2020 (AEDT 01:13 PM), down by 0.628% from its previous closing price, with a market capitalisation of $973.88 million. The total outstanding shares of the company stood at 407.48 million, and its 52-week low and high was noted at $1.885 and $3.060, respectively. The last three and six month return of the stock stood at -5.16% and -12.45%, respectively.

Washington H. Soul Pattinson and Company Limited (ASX: SOL)

SOL is engaged in the ownership of shares, in addition to Au and Cu mining & refining, and coal mining. The company also provides services related to property investment and consulting.

FY19 Dividend Up 3.6% to 58 cps

The company paid a fully franked final dividend of 34 cents per share for FY19, an increase of 3% from the last year’s dividend of 33 cents per share. The total dividend for the year (FY19) stood at 58 cents per share, up by 3.6%. The reason to pay dividends is the regular cash generated from the portfolio. In FY19, the regular cash from operations increased by 18% from the previous year.

More on the company’s results can be read here.

SOL Annual Dividend Yield at 2.7%

The stock of SOL was trading at $22.270 per share on 14 February 2020 (AEDT 01:25 PM), up by 3.485% from its previous closing price, with a market capitalisation of $5.15 billion. The total outstanding shares of the company stood at 239.4 million, and its 52-week low and high was noted at $19.700 and $31.230, respectively. The last 3-month and 6-month return stood at -5.16% and 4.11%, respectively.

Australia and New Zealand Banking Group Limited (ASX: ANZ)

ANZ is a provider of banking and financial products and services, catered towards individuals as well as business customers.

Full-Year Business Performance; Dividend of 160 cps

The bank reported statutory profit for the full year of $6 billion, down by 7% due to lower interest rates, intense competition and slower credit growth. The cash profit for the year stood at $6.5 billion, no change as compared to previous year.

On the positive note, cash earnings per share grew by 2% to 228 cents, mainly due to the capital management actions taken in past years. The bank paid final dividend of 80 cents per share, franked at 70%, taking the whole year dividend to 160 cents, mainly because of strong capital ratios.

ANZ Annual Dividend Yield at 6.05%

The stock of ANZ was trading at $26.600 per share on 14 February 2020 (AEDT 01:38 PM), up by 0.643% from its previous closing price, with a market capitalisation of $74.96 billion. The total outstanding shares of the company stood at 2.84 billion, and its 52-week low and high was noted at $24.090 and $29.300, respectively. The last 3-month and 6-month return stood at 4.88% and -2.15%, respectively.

WAM Capital Limited (ASX: WAM)

WAM Capital Limited is one of Australia’s leading listed investment companies, managed by Wilson Asset Management, which provides investors with exposure to an actively managed diversified portfolio of undervalued growth companies.

WAM Reports Stellar Operating PBT Growth; Interim Dividend of 7.75 cps

The company achieved a 168.4% increase in operating PBT to $95.6 million and a 176.9% increase in operating PAT to $70.4 million in the first half of FY20 ended 31 December 2019. Growth in the operating profit highlights the solid investment portfolio performance over the six-month period.

The company declared an interim dividend (fully franked) of 7.75 cps, representing an annualised dividend yield (fully franked) of 6.9%. The dividend is scheduled for payment on 28 April 2020.

WAM Annual Dividend Yield at 6.65%

The stock of WAM was trading at $2.330 per share on 14 February 2020 (AEDT 01:44 PM), with a market capitalisation of $1.68 billion. The total outstanding shares of the company stood at 721.26 million, and its 52-week low and high was noted at $1.920 and $2.340, respectively. In the time period of last 3 months and 6 months, the stock has delivered 4.48% and 10.43% in returns, respectively.


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