AUS
NZ
UK
CA
USA
IND
A dividend is an integral part of the Australian equity market, as investors follow the dividend pay-out ratio of fundamentally strong stocks. Investors seek higher returns, both in terms of stock price gain and higher dividend yield. In many cases, fundamentally sound companies with stable earnings growth do not have a good track record of paying a higher dividend to its shareholders.
Dividend stocks become attractive in a scenario where the interest rates are low. Also, individuals who are retired or on the verge of retirement find dividend stocks appealing as they provide stable earnings.
In this article, we will discuss four stocks that have generated a dividend yield of more than 8%, and their recent updates.
Alumina Limited (ASX:AWC)
Alumina Limited is engaged in mining and refining activities of different minerals including bauxite, alumina-based chemicals and aluminium smelting through its 40% stake in Alcoa World Alumina & Chemicals.
Alumina announces FY2019 results; revenue up 56%
Alumina announced its FY2019 results on 25 February 2020 with a substantial increase of 56% in revenue from continuing operations (US$2.5 million). Key highlights include:
- Alumina production reaches an all-time high of 12.6Mt
- Cash cost of alumina production (per tonne) fell 7%.
- EBITDA declined from US$1.37 billion in FY2018 to US$1.26 billion. Excluding significant items, EBITDA stood at US$1.59 billion
- NPAT stood at US$214.0 million, down from US$635.4 million
- Net cash inflows were US$730.7 million, down from US$1.07 billion
Outlook: AWC expects annual production of 12.7 Mt of Alumina in FY2020. For bauxite, the company predicts 6.7 M bdt (bone dry tonnes) in 2020, up 0.5% from pcp.
Dividend Announcement: The company has announced a fully franked dividend of US$0.036 per ordinary share on 25 September 2020.
Stock Update: The stock of AWC last traded at $2.130 on 25 February 2020, a decline of 1.389% from its previous close. The company has a market capitalization of $6.22 billion and 2.88 billion outstanding shares. The stock has generated a dividend yield of 12.09% on an annual basis and has a P/E ratio of 7.620x.
New Hope Corporation Limited (ASX:NHC)
New Hope Corporation Limited is a diversified energy company that operates in coal mining, exploration, port operation, conventional oil, agriculture, innovative technologies and investments. On 24 February 2020, the company announced that JP Morgan Chase & Co. and its affiliates became substantial holders on 20 February 2020, with 11.62% voting power.
Quarterly Highlights for the Period ended 31 January 2020:
New Hope declared its operating highlights for the second quarter ended FY20 on 19 February 2020, wherein the company reported total Saleable Coal Production of 2.882 tonnes, an increase of 9% compared to pcp. The quantity of Coal sold stood at 3.019 tonnes, depicting a change of 26% on pcp terms.
During the period, the business reported the application of new hope’s pastoral expertise successfully to the agricultural land surrounding the Bengalla operation. The company reported a continued focus on safety measures during the period. New Hope also announced the completion of coal production at Jeebropilly.
Key Quarterly Highlights for the Period ended 31 January 2020 (Source: Company Reports)
Dividend Update: The Board distributed a dividend of $0.090 per ordinary share on 05 November 2019.
Stock Update: The stock of NHC last traded at $1.625 on 25 February 2020, an increase of 4.502% from its previous close. The company has a market capitalization of $1.29 billion and 831.71 million outstanding shares. The stock has generated a dividend yield of 10.93% on an annual basis and has a P/E ratio of 6.140x.
Fortescue Metals Group Ltd (ASX:FMG)
Fortescue Metals Group Ltd is engaged in the mining, processing and transporting of iron ore across the Pilbara region of Western Australia. On 25 February 2020, the company announced that Ms Sharon Warburton has resigned from her post of Non-Executive Director and the resignation is effective 31 March 2020.
H1FY20 Half Yearly Financial Highlights for the Period ended 31 December 2019
Fortescue Metals declared its half-year FY20 results, wherein the company reported 1.3 billion tonnes of shipment at an average rate of 170 mtpa to 175 mtpa. Below are the highlights:
- The company reported revenue of US$ 6.485 billion, up from US$3.540 in 1H FY19.
- Underlying EBITDA came in at US$4.228 billion, significantly higher than US$1.633 in pcp.
- The company reported its EBITDA margin at 65%, as compared to 69% in pcp.
- Underlying NPAT during the first half stood at US$2.464 billion vs. US$644 million in 1H FY19.
- The company reported its net debt and cash in hand of US$0.7 billion and US$3.3 billion, respectively as on 31 December 2019.
Dividend Update: The company announced a fully franked dividend of $0.760 per ordinary share on 19 February 2020, with a payment date of 06 April 2020.
FY20 Guidance: The company expects full-year shipments, within the range of 170 mt to 175 mt with a cost of US$12.75 to US$13.25. The Capital Investment is likely to be around US$2.4 billion in FY20.
Stock Update: The stock of FMG last traded at $10.930 on 25 February 2020, a decline of 0.636% from its previous close. The company has a market capitalization of $33.87 billion and 3.08 billion outstanding shares. The stock has generated a dividend yield of 9.09% on an annual basis and has a P/E ratio of 4.760x.
Southern Cross Media Group Limited (ASX:SXL)
Southern Cross Media Group Limited is a media company which owns and operates 96 FM, AM and DAB+ radio stations in Australia.
SXL announces H1 FY2020 results, group revenue down 8.2%
SXL reported its first-half results for FY2020, wherein the company reported revenue $308.1 million, a decline of 8.2% compared to pcp due to a full advertising contraction impacting all markets and segments – including Audio and Television. Below are the highlights:
- Underlying EBITDA stood at $62.2 million, depicted a fall of 26.7% from H1FY19. Statutory EBITDA came in at $67.5 million, which was impacted by $8.2 million non-cash benefits relating to the adoption of AASB 16 (Leases) and $2.9m in one-off restructuring costs.
- NPAT came in at $22.4 million, as compared to a net loss of $119.2 million in H1FY19.
- The business reported 12% lower Net Debt 12% due to debt-funded acquisition of Redwave Media.
Dividend Update: The company announced an unfranked dividend of $0.0275 per ordinary share on 20 February 2020, with a payment date of 16 April 2020.
Stock Update: The stock of SXL last traded at $0.750 on 25 February 2020, a decline of 4.459% from its previous close. The company has a market capitalization of $603.68 million and 769.01 million outstanding shares. The stock has generated a dividend yield of 8.6% on an annual basis and has a P/E ratio of 12.420x.
