A successful investment is subject to the choice of right asset classes. An investor has a variety of options available for investment such as bonds, commodities, debentures equity etc. Investors who choose to deploy their capital in equity have a variety of investment strategies to choose from - growth shares, value shares, dividend shares to name a few. The one who choose to derive income from their investment tend to be inclined towards dividend stocks. When capital appreciation is a priority, investors tend to invest in the growth shares.
Growth shares typically invest the free cash flow generated back in the business as the need for growth capex is higher. Hence, such businesses avoid paying dividends to its shareholders, on the other hand, dividend shares are usually from the mature businesses, and their capex needs are taken care of and the business does not call for incremental capital. Hence, the management of dividend shares typically pay out large portion of the earnings in the form of dividends.
However, there are instances, wherein we find businesses that have characteristics of both dividend and growth. Ideally, investing in such businesses would be rewarding for the shareholders, as both the short- term income and long- term capital appreciation are taken care of.
In the article below, we will be digging into five ASX-listed dividend growth shares and their recent updates:
CSL Limited (ASX: CSL)
CSL Limited was established in 1916 and is committed to improve the quality of life for individuals with unusual and serious ailments across the world. The company supports the activities related to issues related to plasma-protein consisting of bleeding disorders and such diseases among the patients.
CSL paid the dividend of $1.45 for the period closed 30 June last year, on 10 October 2019. It had an ex-dividend date of 10 September 2019. The declared dividend/distribution was 100 per cent unfranked. Moreover, the stock has an annual dividend yield of 0.89 per cent.
Healthcare Conference Presentation
On 14 January 2020, the company released 2020 JP Morgan Healthcare Presentation, a few highlights of the presentation are as follows;
- The company was ranked number one in plasma therapies $30 billion industry and ranked number two in influenza vaccines which is a $6 billion industry.
- CSL has a strong market position with revenue approximately of $8.5 billion in more than 100 countries.
- CSL limited has strong financial position with net debt / EBITDA of 1.4x and A3/A- credit rating.
- The company’s KCENTRA® remains the first, and only FDA approved 4F-PCC for reversing patients on warfarin.
On 20 January 2020, CSL was trading at $304.429, rising by 1.44 per cent (at AEDT 3:46 PM). The stock has produced a positive return of 5.40 per cent in the past 30 days duration.
Altium Limited (ASX: ALU)
Established in 1985, Altium Limited is headquartered in San Diego, California and was listed on ASX in1999. It is an IT sector player that concentrates on electronics design systems for 3D PCB design etc.
ALU paid the dividend of $0.18 cents on 25 September 2019, for the period closed 30 June last year. It had an ex date of 3 September 2019. The declared dividend/distribution was 100 per cent unfranked, and the stock has an annual dividend yield of 0.88 per cent.
Technology and Strategy Presentation
On 6 December 2019, the company released 2019 Technology Presentation, a few highlights of the presentation are as follows;
- The company’s next stage of growth would be different from its previous stages.
- During the next phase of growth, Altium will be stepping up from Optimal Performance to Extreme Performance by changing its change to its “Line and Length” strategy.
- The Altium incubation zone will have small acquisitions like PCB:NG, Upverter, Gumstix.
- The company would target 100,000 active subscribers by 2025 to compel key industry stakeholders to aid its agenda to alter electronic design and its realisation.
- Altium Designer, NEXUS, TASKING will be in the Dominance Zone, and Octopart will be in the Transformation Zone.
ALU stock last traded at $38.540, moving up by 0.26 per cent from its last close, as on 20 January 2020. The stock has produced a positive return of 6.66 per cent in the past 30 days duration.
Ramsay Health Care Limited (ASX: RHC)
Ramsay Health Care Limited is an international hospital group. Being a healthcare service provider, the company operates across around 500 locations across Australia, United Kingdom, France, Sweden, Norway, Germany, Indonesia, Hong and Italy.
As per the company’s update on 29 August 2019, RHC paid the dividend of $2.293 on 21 October 2019, for the period closed 20 October last year. It had an ex-dividend date of 2 October September 2019. The declared dividend/distribution was 100 per cent franked, and the stock has an annual dividend yield of 1.98 per cent.
Appointment of Group Chief Financial Officer
On 18 December 2019, the company announced the appointment of Mr Martyn Roberts as Group Chief Financial Officer. He is currently the Group Chief Financial Officer at Coca-Cola Amatil he has been holding the position since July 2015.
Prior to Amantil, he had worked for seven years with Woolworths Ltd (ASX: WOW). Mr Robert will begin with his role in the first half of 2020. He was a replacement of Mr Bruce Soden who will step down at the end of the year.
On 20 January 2020, RHC last traded at $77.490, moving upwards by 1.254 per cent from its last close. The stock has produced a positive return of 4.55 per cent in the past 30 days duration.
Alumina Limited (ASX: AWC)
Focussed on alumina, Alumina Limited is engaged in investing in alumina refining and bauxite refining through its 40 per cent ownership of Alcoa World Alumina and Chemicals (AWAC).
AWC paid the dividend of USD0.044 on 12 September 2019, for the period closed 30 June last year, and its ex-dividend date was 28 August 2019. The declared dividend/distribution will be 100 per cent franked, and the stock has an annual dividend yield of 11.41 per cent.
AWC’s Joint Venture Alcoa Corps reported Q4 2019 Results
On 16 January 2020, the company’s updated on Alcoa Corp’s Q4 2019 results, a few highlights of financial report are as follows;
- Alcoa Alumina segment’s adjusted EBITDA decreased to $133 million in the fourth quarter as compared to the third quarter 2019’s $133 million due to lower API pricing.
- The company’s bauxite segment noted a decrease in the adjusted EBITDA to $132 million in the fourth quarter compared to 2019 3rd quarter’s $134 million due to minor increase in other production costs.
- Bauxite segment EBITDA margin has been increased to 42.4 per cent in Q4 2019 from 38.2 per cent in Q3 2019 period.
- The Alcoa’s Net Debt / (Cash) in Q4 2019 stood at $54.8 million.
AWC has 40 percent stake in each of the AWAC companies, which is a part of the Alcoa bauxite and alumina business divisions.
Alumina Limited’s CEO, Mike Ferraro, commented on Alcoa’s and Bauxite and Alumina segment:
On 20 January 2020, AWC last traded at $2.330, moving up by 1.747 percent from its last close. The stock has produced a negative return of 3.78 per cent in the past 30 days duration and a positive result of 0.44 per cent in the last three months.