Dividends are a fraction of the company's profits distributed by the Board to its shareholders and usually considered as an indicator of good financial health and sound future prospects of that company. Dividends are usually independent of the share price but may vary with change in interest rates and general market conditions. A dividend yield between 4% and 6% is considered quite good and even better if it is beyond that.
Let’s look at the following ASX listed companies that boasts of dividend yields above 7%.
Source: ASX (As on 22 November 2019)
Alumina Limited (ASX: AWC)
Alumina Limited owns 40% of each of the AWAC entities, which form a part of the Alcoa bauxite & alumina business segments.
Source: MB Fastmarkets International Aluminium Conference Presentation
Alcoa Corp Third Quarter 2019 Results: On 18 October 2019, Alumina disclosed the Alcoa Corp’s 3Q 2019 Bauxite and Alumina Segments’ results which demonstrated resilience of the company’s low-cost operations (Alcoa’s Bauxite and Alumina segments) that continue to deliver solid returns amidst environment of a lower alumina price.
Source: Alcoa Corp Third Quarter 2019 Earnings Release
For the six months’ period ended 30 June 2019, Alumina paid out a fully paid ordinary dividend of USD 0.04400000 (Record Date: 29 August 2019; Payments Date: 12 September 2019).
Stock Information: On 22 November 2019, the AWC stock price settled the day’s trade at AUD 2.390 with ~ 5.9 million shares traded. AWC generated a positive return of 10.65% in the last 3 months and 7.66% YTD. Recently, Vanguard Group became a substantial shareholder in AWC upon buying ~ 143.99 million shares representing voting power of 5%.
Southern Cross Media Group Limited (ASX: SXL)
Southern Cross Media Group Limited operates broadcasting and publishing businesses including regional radio and television stations in Australia and publishes community newspapers in the United States.
Redwave Media Acquisition: On 18 October 2019, Southern Cross Media Group disclosed the details of its proposal for the acquisition of Western Australia-based regional radio business Redwave Media which is owned by the company, Seven West Media Group Limited (ASX:SWM). Redwave Media comprises-
|Redwave Media Segments||Licenses|
|Red FM||Geraldton, Broome, Karratha and Port Hedland plus greater western regional mine sites|
|Spirit AM||Geraldton, Broome, Karratha, Port Hedland and Southwest/Bunbury|
- Purchase price: $ 28 million (payable in cash) on completion. The price represents an FY19 Enterprise Value/EBITDA multiple of 8 times.
- The acquisition, if executed, is expected to be EPS accretive for Southern Cross Media Group for the going year and generate a return on invested capital above the company’s 8.9% hurdle rate.
- Subject to regulatory approvals from the Australian Communications and Media Authority and the Australian Competition and Consumer Commission.
SXL paid out an ordinary fully-paid dividend of AUD 0.040 (Record Date: 9 September 2019; Payment Date: 8 October 2019) for the half year to 30 June 2019.
Stock Information: SXL settled the day’s trade on 22 November 2019 at AUD 0.920, edging up 0.54% by AUD 0.005 with ~ 845,567 shares traded. SXL has generated a 1-month positive return of 7.02%.
Whitehaven Coal Limited (ASX: WHC)
Whitehaven Coal Limited is an Australia-based coal producer engaged in the mining and supply of metallurgical and thermal coals to the global steel, power generation, and metallurgical industries.
September 2019 Quarter Production Report Highlights: The company reported that the quarter saleable coal production of 4.9Mt was 23% higher than the prior corresponding period (pcp) and the quarter coal sales of 5.5Mt were 14% higher than pcp. The company also achieved improvement in the safety performance with TRIFR at 5.14 for the 12 months to 30 September 2019.
The uptick in sales volume was mainly due to the improvement in the Narrabri production relative to pcp, which was affected by the move to LW107. Also, the company’s equity sales were more than saleable production for this quarter due to the drawing down of stocks that were built up towards FY19-end.
During the reporting period, Whitehaven signed an agreement with EDF to acquire EDF’s 7.5% interest in the Narrabri underground longwall mine which when completed would take Whitehaven’s equity ownership in EDF to around 77.5%.
Source: Company’s Quarterly Report
For the six months to 30 June 2019, Whitehaven Board announced an ordinary fully paid dividend of AUD 0.30 (Record Date: 6 September 2019; Payment Date: 19 September 2019).
Stock Information: The stock of Whitehaven settled the market trading on 22 November 2019 at AUD 3.060 with ~ 5.74 million shares traded.
Harvey Norman Holdings Limited (ASX: HVN)
Australia-based Harvey Norman Holdings Limited (ASX: HVN), a retail icon throughout Australia, is a holding company for companies and trusts in a third-party franchise agreement.
Annual Report FY19 Highlights: Harvey Norman Holdings reported Franchisee Aggregated Sales Revenue of AUD 5.66 billion which was 1.8% lower on the prior year on a headline basis and 0.9% lower on a comparable sales basis. The company’s operated sales revenue amounted to AUD 2.23 billion, which was 12.1% higher relative to the previous year. The Profit Before Tax for the period totalled $ 574.56 million, up 8.4% on previous year.
The Group’s net assets stood at AUD 3.2 billion, surpassing the AUD 3 billion milestone for the first time during FY19. There was a 25.50% improvement in the net debt to equity ratio which was at 19.46% as at 30 June 2019.
Harvey Norman Holdings paid an ordinary fully-paid dividend of AUD 0.210 (Record Date: 11 October 2019; Payments Date: 1 November 2019) for the six months to 30 June 2019.
Stock Information: The HVN stock settled the day’s trade at AUD 4.280, edging up 1.42% on 22 November 2019. HVN has also delivered positive returns of 36.51% YTD and 7.305 in the last 6 months.
AMP Limited (ASX: AMP)
AMP Limited based in Sydney, Australia, is a wealth management company offering solutions and services including financial advice, life insurance, superannuation, investment management, self-managed superannuation funds (SMSFs), retirement income etc to global clients, especially various blue-chip companies in Australia.
Third Quarter 2019 AUM and cashflows update: All AMP’s business segments performed well in line with expectations for the period Q3 19. There assets under management (AUM) grew in value for Australian wealth management and AMP Capital business segments on the back of strong investment markets to AUD 133.2 billion and AUD 202.2 billion respectively.
In addition, the cash inflows increased in Australian wealth management offset by higher outflows including AUD 0.6 billion of regular pension payments and AUD 0.2 billion from the impact of new Protecting Your Super legislation. The net external cash inflows for the AMP Capital business totalled AUD 0.8 billion primarily on account of strong infrastructure debt and real estate flows, taking the AUM beyond AUD 202 billion.
The company announced an ordinary fully-paid dividend of AUD 1.0497 for the quarter to 22 December 2019 (Record Date: 13 December 2019; Payments Date: 23 December 2019).
Stock Information: The stock of AMP closed the market trading session on 22 November 2019 at AUD 1.955, down 0.255% by AUD 0.005. AMP has generated one month and 3-month positive returns of 11.36% and 12.64% respectively.
Recently, Blackrock Group became a substantial shareholder in the company upon purchasing 174,978,238 ordinary shares representing a voting power of 5.09%.
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