Stocks with upheld dividend plus growth, amid Coronavirus

  • Mar 23, 2020 AEDT
  • Team Kalkine
Stocks with upheld dividend plus growth, amid Coronavirus

Coronavirus is spreading across the nations around the world and that too at an exponential rate. Worldwide, the financial markets are in turmoil, bringing the economy to a big-time halt, escalating lockdowns, and a lot more of agonising choices for human lives. At this moment, for an investor it becomes vital to pick the right stock to enhance his portfolio. In this article, we will have a look at 3 stocks from varied sectors who have a good dividend with growth. Moreover, a dividend is beneficial in terms of passive income and growth stock is useful for the capital gain.

Three stocks under radar: CGC, RMD and FPH

Also Read: Healthcare Stars – CSL, RHC, SHL

Costa Group Holdings Limited (ASX: CGC)

ASX-listed company, Costa Group Holdings Limited grows, packs and market the fresh vegetables and fruit. Five core categories in which the Company operates are avocados, berries, citrus, mushrooms and glasshouse cultivated tomatoes.

Shares of CGC showcased the return of 20.49 percent and 17.13 percent in 3-months period and YTD. Specifically, on the release date of full year results on 27 February, the stock gained 5 percent on the previous closing price.

On 27 February 2020, Costa Group released its 2019 annual report for the period ended 29 December 2019. Revenue increased by 5.8 percent on prior year to stood at $1,048 million. EBITDA was $98.3 million and NPAT was at $28.4 million. Due to the acquisition of African Blue and non-cash items associated with mushroom category, CGC owned a statutory net loss after tax of $33.8 million. In December 2019, the net debt of CGC was $178.8 million, along with leverage of 1.82.x EBITDA-SL.

The enhanced grape marketing volume and sales of new Colignan citrus farm led to the growth in total revenue.

Additionally, a fully franked dividend of 2 cents per shares was declared by the Company which is to be paid on 8 April 2020. It had a record date of 13 March 2020 and ex date of 12 March 2020.

As at 23 March 2020, the annual dividend yield of CGC stock was noted at 1.87 percent. Also, the past 4 years annual dividend of the Company was at 0.09 in FY 2016, 0.11 in FY 2017, 0.135 in FY 2018, which dropped to 0.085 in FY 2019.

The Company’s outlook assumptions for CY 2020 mentioned the new Monarto capacity would be ordered from Q2 CY 2020. The outlook also highlighted an upward trend among mushroom, berry, avocado and downward trend in Citrus.

On 23 March 2020, CGC was trading at $2.580, moving down by 12.245% (at AEDT 2:33 PM).

ResMed Inc (ASX:RMD)

An ASX listed health care company, ResMed Inc owns software platforms that helps healthcare attendants and practitioners who aid individuals remain healthy in the house or care setting as per their preference. RMD is into the business of creating medical devices for patients with COPD, sleep apnoea, and other chronic diseases. The Company had improved the lives of more than 100 million in the year 2019 and caters to more than 140 countries.

RMD showcased a balanced growth across software solutions, global markets and product portfolio in its second quarter of FY 2020 results for the period ended 31 December 2019. The snippets of the performance are mentioned below.

  • Revenue grew by 13 percent on prior year and stood at $736.2 million.
  • Net income for the period improved by 29 percent on pcp to $160.6 million.
  • Net operating profit and non-GAAP operating profit of ResMed increased by 26 percent and 21 percent, respectively.
  • GAAP and non-GAAP diluted earnings per share were $1.1 and $1.21, respectively.
  • GAAP gross margin and non-GAAP gross margin were reported at 58 percent and 59.7 percent, respectively.

The Company’s positive sentiments have been witnessed on its stock market with 1 percent of return in YTD period. Furthermore, RMD has a good dividend history. It has an annual dividend yield of 0.71 with price to earnings ratio of 49.12x. In January, an unfranked dividend distribution of 3.9 cents per security, for the period ending 31 December 2019 was

declared to its shareholders. It had an ex date of 12 February 2020 and was paid on 19 March 2020.

Going forward, RMD intends to adopt the following.

  • Continue its lead in digital health by transforming lives in out of hospital healthcare space
  • lead the innovation of medical software and devices
  • To create efficiencies
  • Reduce the costs for overall healthcare system
  • For developing a robust growth ahead, RMD is on its way to improve the lives of 250 million in 2025.

On 23 March 2020, RMD was trading at $19.680, slipping by 11.511% (at AEDT 3:02 PM).

Fisher & Paykel Healthcare Corporation Limited (ASX:FPH)

ASX- listed Health care provider, Fisher & Paykel Healthcare Corporation Limited is into the business of offering innovative products which are useful for respiratory care.

While majority of the businesses felt the heat of coronavirus due to indulgence of China in their business cycle. However, FPH is relaxed in this area as the Company does not have any manufacturing facility based out in China, although some of its suppliers of raw materials are established in China. Thereby, FPH claims to have no major material impact from Coronavirus.

Fisher & Paykel has delivered a positive return of 23.03 percent on YTD basis amidst of coronavirus outbreak. FPH had followed a significant return in past, with 21.13 percent return in 3 months and 64.44 percent in 6 months.

On 23 March 2020, after an announcement made by NZ’s PM that coronavirus alert status would be elevated to Level 4 in 2- day time period, FPH updated the market that it has been designated as essential service by the NZ government and will maintain operations in its Auckland facilities. 

Owing to the weakening of NZ dollar as against most currencies, FPH had notified the market about an update of its earnings and revenue guidance for FY 2020 for the period ending 31 March 2020. Considering an NZ:US exchange ratio to be nearly sixty-one cents and an NZ:EU exchange ratio to be around fifty-five cents for the outstanding financial year, FPH projects the following.

  • Complete year operating revenue to be increased to $1.24 billion as compared to the previous figure of $1.2 billion
  • NPAT to lie in the range of $275 - $280 million. Earlier guidance updated in February projected NPAT to be in the range of $260 - $270 million.

On 23 March 2020, FPH’s annual dividend yield was noted at 0.94 with price to earnings ratio of 66.24x.

On 23 March 2020, FPH was trading at $ 26.51, rising by 2.752% (at AEDT 3:22 PM). FPH has a market cap of $14.82 billion with outstanding shares of ~574.56 million.

More about FPH: Fisher & Paykel Healthcare: A Star in Respiratory Care Devices Market

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