What is Dividend?
Dividend is a portion of net profit; which company returns to its shareholders for retaining their investment in the company. However, there is no legal obligation for paying dividend as it totally depends on the wish of management. Dividend can be paid in the form of shares or cash or other property as well. Out of which most common is cash dividend.
It is very important for an investor to know about the announcement date, Ex-dividend date, record date and payment. In the below article we would be looking at six dividend paying companies, which have returned a decent amount to shareholders in the form of dividend. Let’s have a look at those companies:
Dicker Data Limited
Dicker Data Limited (ASX: DDR) is a wholesale distributor of computer hardware, software and related products. The company reported revenue amounting to $1,289.1 million, for 9 months to September 2019, reflecting a rise of 17.8% as compared to the same period last year. This has been resulted by strong performance throughout all its vendor partnerships as well as realising full value for new vendors.
The operating profit before tax amounted $47.4 million for the period, indicating a rise of 38.6% against comparative period last year.
Return to Shareholders
- For the half year ended 30th June 2019, the company returned total $19.3 million (fully franked) in the form of dividend, out of which the company paid cash dividends amounting to $16.0 million and amount of $3.2 million has participated in the DRP.
- As a result of profit amounting to more than $12 million from the divestment of 230 Captain Cook Drive property, the company paid a special dividend on 4th October 2019. This special dividend was amounted to 5.00 cps. This brought the total dividends paid so far for FY19 to 22.00 cps.
The stock of DDR closed at $6.950, with a rise of 2.811% as on 3rd January 2020. The stock has delivered returns of -10.78% and 30.39% during the last three months and six months, respectively.
Telstra Corporation Limited
Telstra Corporation Limited (ASX: TLS) is engaged in providing telecommunication and information services. This includes mobiles, internet as well as pay television. During FY19, the company has wrapped up its strategic investment program amounting to around $3 billion, which was required to create the types of networks it would need in the future as well as to completely digitalise its business. The company mentioned in its investor day presentation that it continues to aim cost savings and productivity. This saving is for all recorded fixed costs and the entire cost-base structure followed by the company. An additional approx. $300 million restructuring costs is anticipated by the company for with T22 in FY20.
The board of the company declared a total final dividend amounting to 8 cps, fully franked. This amount comprises of a final ordinary dividend and a final special dividend of 5 cps and 3 cps, respectively. Together with the total interim dividend, which was paid in February 2019, for FY19, the shareholders of the company have received a total dividend amounting to 16 cps.
Also Read: How these tech companies are ready for 2020?
The stock of TLS closed at $3.590, with a rise of 0.279% as on 3rd January 2020. The stock has delivered returns of 5.59% and -6.24% during the last three months and six months, respectively.
Qantas Airways Limited
Qantas Airways Limited (ASX: QAN) provides domestic and international air transport services. The company also sells domestic and worldwide holiday tours. The company recently announced that BlackRock Inc. and subsidiaries has become an initial substantial holder in the company on 30th December 2019.
Rise in Revenue in Q1 FY20
The company recently notified the market with the results for Q1 FY20 and outlined the following:
- During Q1 FY20, the company continued to deliver revenue growth of 1.8% and the figure stood at $4.56 billion in comparison to $4.49 billion in the pcp. While the group unit revenue witnessed a rise of 2.1% against the prior corresponding period.
- The Group is on track to deliver minimum $400 million in transformation benefits in FY20, with an increased focus on cost reduction initiatives in the 2H.
When it comes to dividend, the company paid a fully franked ordinary dividend amounting to 13 cents per share. Also, the company has returned $1 billion in the form of dividends and buybacks in FY19 to shareholders.
The stock of QAN is trading at $7.190, with a rise of 0.419% as on 3rd January 2020. The stock has delivered returns of 14.13% and 31.44% during the last three months and six months, respectively.
Nick Scali Limited
Nick Scali Limited (ASX: NCK) is in locating and retailing of house-hold furniture and other linked fittings. The company recently announced that Perpetual Limited and its related bodies corporate has made a change to their substantial holdings in the company on 26th November 2019 and the current voting power stands at 11.22% as compared to the previous voting power of 10.10%.
During FY19, the company declared final dividend of 20 cps, fully franked, which was paid on 29th October 2019. This brought the total dividend to 45 cps, fully franked for FY19, reflecting a dividend payout ratio of 87% for the full year.
The company recently advised the market participants that difficult trading conditions have continued into the first three months of the current financial year (FY20) and the company provided following guidance:
- For the half-year ending 31 December 2019, the company anticipates NPAT would be in the vicinity of $17m-$19m, against $25m for the corresponding period in FY19.
- The company continues to generate positive cashflows, maintains a strong balance sheet even with the softer trading conditions.
The stock of NCK is trading at $6.700 with a fall of 1.76% as on 3rd January 2020. The stock has delivered returns of -6.94% and 5.18% during the last three months and six months, respectively.
Metals & Mining company Alumina Limited (ASX: AWC) possesses 40% interest in the series of operating entities forming Alcoa World Alumina and Chemicals (AWAC). The company recently announced that The Vanguard Group Inc. and its controlled entities have become an initial substantial holder with the voting power of 5.001% on 23rd December 2019.
A Look on 1H FY19 Performance
- For the half-year ended 30th June 2019, the company declared a fully franked interim dividend amounting to 4.4 US cps. At the current market price of A$2.280 on 3rd January 2020, the Annual dividend yield of the company stood at 11.46%.
- During the same period, company reported EBITDA and NPAT amounting to USD 950 million and USD 552 million, respectively.
- The cash flow from operation stood at USD 456 million at the end of 1H FY19.
On the outlook front, the company stated that Aluminium demand is anticipated to grow consistent with longer term trends and this would help in supporting the alumina price in the future
The stock of AWC is trading at $2.280 on 3rd January 2020. The stock has delivered returns of -2.15% and -5.00% during the last three months and six months, respectively.
Southern Cross Media Group Limited
Southern Cross Media Group Limited (ASX: SXL) is involved in the creation and broadcasting of content. This content is usually out on either free-to-air commercial radio, online media, or TV among other such platforms throughout Australia. The company recently announced that Challenger Limited and its entities has made a change to their substantial holdings in the company on 3rd December 2019 and the current voting power stands at 6.14% as compared to the previous voting power of 5.09%.
At the end of financial year ended on June 30, 2019, the Board of the company declared a final ordinary dividend of 4.00 cps. In combination with interim dividend of 3.75 cents, the total dividend for FY19 stood at 7.75 cents per share.
Weak Media Market
- The company recently updated the market with trading update and guidance for the six months ending 31 December 2019 (1H FY20)
- SXL stated that media markets have been weak throughout Q1 FY20 and operating costs for Q1 FY20 were $1M below the prior comparable period.
The stock of SXL is trading at $0.850 on 3rd January 2020. The stock has delivered returns of -25.76% and -33.07% during the last three months and six months, respectively.
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