With the ongoing political and war tensions increasing between the US and Iran, devastating bushfire in Australia and the trade war between US-China, it can be said that the year 2020 did not start well for these countries. The first question which comes up in everyone’s mind is, how the investors will earn during such situations.
How can investors still earn a profit on their investments?
Investing in Dividend Stocks can be an answer to this question. Interest rate across the globe are declining, which shall be advantageous for solid dividend stocks as they offer both defensive investment strategy and high income. Knowing this, interest rates in Australia are already at record low levels of 0.75 per cent, as announced in October 2019, dividend stocks are viewed by the investors as the most appealing investment opportunity in the current scenario.
How to Calculate Dividend Yield
To calculate dividend yield the investor simply need to divide the annual dividend by the current share price. For Example, if the company has paid an annual dividend of $1.50 and the current share price of the company is $55, then the dividend yield can be calculated as;
Dividend Yield = $1.50 x 100 = 2.7%
Dividend yield changes over time either by a change in current market price or increase or decrease in the dividend issued.
We have screened five high dividend yield stocks which have witnessed good operational progress and shared dividends among their investors in the recent past.
Alumina Limited (ASX: AWC)
Exclusively positioned in the world’s alumina market in joint venture with Alcoa World Alumina & Chemicals, Alumina Limited invests in alumina refining and bauxite mining. AWC paid dividend of USD 0.044 per share for the half year ended on 30 June 2019. The declared dividend/distribution is 100 per cent franked, and the stock has an annual dividend yield of 11.31 per cent as on 13th January 2020.
AWC and Alcoa approved AWAC’s point Comfort Operation Closure
On 17 December 2019, Alcoa Corporation and Alumina Limited have approved AWAC closing its alumina refinery in Point Comfort, Texas, which has been fully curtailed since June 2016. The company’s equity share of the charges would be $104 million. Under the partnership agreement, AWAC is 60 per cent owned and managed by Alcoa Corporation and 40 per cent owned by the company.
In order to view the company’s operating performance for Q3 FY 19 click here
On 13 January 2020, AWC stock last traded lower at $2.290, fall by 0.866 per cent from its last close. The stock has produced a positive return of 2.21 per cent in the past 30 days duration.
Whitehaven Coal Limited (ASX: WHC)
Whitehaven Coal Limited is a largest independent superior quality coal producer in North West NSW. The Whitehaven Coal paid final dividend of 30 cents (50% franked) bringing the total dividend for the year ended on 30th June 2019 to 0.50 cents. Annual dividend yield stands at 10.64 per cent as on 13th January 2020.
Whitehaven expands interest in Narrabri Mine
WHC acquired EDF Trading Australia Pty Limited, possessing 7.5 per cent benefit in the Narrabri underground mine, on 2 January 2020. Post-acquisition the company will own 77.5 per cent of ownership in the mine and if all Joint Venture Participants exercised their rights of preemption the interest would decrease to approximately 75.7 per cent.
The total consideration of acquisition is US$72 million.
On 13th January 2020, WHC stock last traded at $2.550, lower by 0.391per cent from its last close. The stock has produced a negative return of 3.40 per cent in the past 30 days duration.
Bank of Queensland Limited (ASX: BOQ)
Bank of Queensland Limited is a leading regional bank and is ranked as one of the top 100 companies in Australia on market capitalisation. The Company paid dividend of 31 cents relating to the period of six months (for the period closed on 31 August) on 27 November 2019. Bringing the total pay-out for the year to $0.65. The BOQ declared a 100 per cent franked dividend and has an annual dividend yield of 8.84 per cent as on 13th January 2020.
Bank of Queensland Completed SPP
On 30 December 2019, Share Purchase Plan (SPP) completion was announced by the company. The share Purchase Plan was started on 25 November 2019 in conjunction with BOQ’s fully underwritten $250 million institutional placement.
The company has raised approximately a total of $89.7 million under SPP which shows a 2 per cent discount to the VWAP1 of company’s shares traded on ASX between 16 – 20 December.
On 13th January 2020, BOQ stock last traded at $7.320, lower by 0.408 per cent from its last close. The stock has produced 0.68% as return in the past 30 days duration.
Southern Cross Media Group Limited (ASX: SXL)
Being one of the Australia’s biggest entertainment company with a reach of more than 95 per cent of Australia’s population through Television, Radio and Digital Assets. Southern Cross-media paid the final dividend of 4 cents relating to the period of six months (for the period closed on 30 June 2019) on 8 October 2019 bringing the total dividend for the year to $0.08. The company declared 100 per cent franked dividend and has an annual dividend yield of 8.76% as on 13th January 2020.
Refinanced debt facilities
On 11 December 2019, the company has announced that it has successfully negotiated the refinancing of its syndicated debt facility for a further 3 years.
- The new facilities will include a 3-year revolving $435m facility.
- The Financial covenants will remain at a maximum of 3.5 times Net Debt.
- The refinancing will be formally completed on 8 January 2020.
To know about the strategies for value creation in the communication and media space in Australia click here
On 13th January 2020, SXL stock last traded at $0.895, higher by 1.13 per cent from its last close. The stock has produced a negative return of 3.28 per cent in the past 30 days duration.
New Hope Corporation Limited (ASX: NHC)
Being a majorly Australian owned, New Hope Corporation Limited has a business interest in exploration, agriculture, oil coal mining etc. The company operate as a diversified energy company. The New Hope Foundation paid dividend of 9 cents per share relating to the period of twelve months (for the period closed on 31 July 2019) on 5 November 2019. Bringing the total for the year to $0.17. The NHC declared a 100 per cent franked dividend has an annual dividend yield of 8.37 per cent.
To know about the recent decision of the Queensland Court on New Hope Corporation Limited click Here
On 13th January 2020, NHC stock last traded at $2.030, lower by 0.976 per cent from its last close. The stock has produced a positive return of 3.02 per cent in the past 30 days duration.
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There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.