What Is This Buzz About Defensive Income And Growth Stocks - RMD, LLC, TLS, TCL, WOW, SGR, TAH, REA, QBE

  • Sep 12, 2019 AEST
  • Team Kalkine
What Is This Buzz About Defensive Income And Growth Stocks - RMD, LLC, TLS, TCL, WOW, SGR, TAH, REA, QBE

Defensive Stocks Explained: A defensive stock refers to the shares of a company delivering consistent returns for the shareholders on the back of consistent financial performance, which is mainly dependent on the existing product line of the company. Despite the volatility of the market, such stocks manage to gain traction as the company issuing the shares is generally into the business of goods and services that fulfil daily requirements of customers.

Growth Stocks Explained: A growth stock is characterised by a company whose shares are estimated to grow significantly in comparison to the average growth rates for the industry or the market. Such companies do not distribute any dividends and rather invest the earnings generated for further growth of the business.

ResMed Inc

ResMed Inc (ASX: RMD) develops and manufactures medical devices and cloud-based software solutions.

Dividend: The company recently announced that it will be paying a dividend amounting to USD 0.039 per share on 19 September 2019.

FY19 Performance: During the year ended 30 June 2019, the company generated revenue amounting to US$2,606.57 million, increasing 11% in comparison to $2,340.20 million in prior corresponding period. Looking at the segment performance, net revenue from Sleep and Respiratory Care business increased by 7%. Devices revenue witnessed a rise of 4% and masks revenue increased by 10%. SaaS business witnessed 76% increase in revenue, the highest among all businesses.

Revenue (Source: Company Reports)

The stock of the company generated returns of 35.63% over a period of 6 months. Currently, the stock is trading at a market price of $19.450, up 0.673% on 12 September 2019 (AEST – 12:36 PM).

Lendlease Group

Lendlease Group (ASX: LLC) is involved in property and infrastructure internationally.

The company recently issued Lendlease Trust Fund Payment Notice, declaring a Fund Payment of 34.535068 cents per unit.

Dividend Distribution: The company also released an announcement regarding payment of dividend amounting to AUD 0.3000 per share on 16 September2019.

Financial Performance: During the year ended 30 June 2019, the company reported profit after tax amounting to $153.63 million, as compared to $212.80 million in prior corresponding year. Key transactions during the year included partial disposal of units in Lendlease One International Towers Sydney Trust, on market stapled security buyback of $33.85 million and further investment of $49.60 million w.r.t Australian Prime Property Fund – Commercial and $16.17 million w.r.t Australian Prime Property Fund – Industrial.

Statement of Comprehensive Income (Source: Company Reports)

The stock of the company is currently trading at a market price of $16.790, down 1.409% on 12 September 2019 (AEST – 1:01 PM).

Telstra Corporation Limited

Telstra Corporation Limited (ASX: TLS) is engaged in provision of telecommunications and information services for domestic and international customers.

Director’s Interest: The company recently updated that Roy H Chestnut, one of the directors, acquired 27,000 ordinary shares for a consideration of $97,051.50.

The company recently modified its FY20 guidance for NBN Co’s Corporate Plan 2020. The company reduced the total number of premises forecast for FY20, was revised to 1.5 million, from 2 million earlier. As a result of the above modification, cost reduction target for the year was changed to $630 million, as compared to the previous target of $660 million.

Revised Guidance (Source: Company Reports)

The stock of the company is currently trading at a market price of $3.615, up 1.545% on 12 September 2019 (AEST – 1:14 PM).

Transurban Group

Transurban Group (ASX: TCL) is engaged in building and operation of toll roads.

FY19 Performance: In FY19, revenue from ordinary activities stood at $4,166 million, representing an increase of 26.3% on prior corresponding period. EBITDA during the period amounted to $1,996 million, up 21.0% on prior corresponding period. Net profit attributable to security holders, excluding significant items, amounted to $261 million.

Proportional Results compared to the prior period: Toll revenue for FY19 witnessed a rise of 10.3% at $2,581 million. Free cash increased by 25.7% to $1,527 million and EBITDA decreased by 4.4% to $1,696 million.

Income Statement (Source: Company Reports)

The stock generated returns of 15.34% over a period of 6 months and is currently trading at a market price of $14.180, up 0.071% on 12 September 2019 (AEST – 1:23 PM).

Woolworths Group Limited

Woolworths Group Limited (ASX: WOW) is engaged in retail operations primarily in Australia and New Zealand.

FY19 Highlights: The company generated sales amounting to $59,984 million, rising 3.4% on prior corresponding period. EBIT stood at $2,724 million, representing an increase of 5.0% on previous year. NPAT for the year amounted to $1,752 million, rising 7.2% on prior corresponding period. During the year, the company reported robust customer scores, especially in Q4. The period saw material improvement in momentum in Big W.

Dividend: The company also declared a dividend amounting to AUD 0.5700 per share, to be paid on 30 September 2019.

FY19 Financial Summary (Source: Company Presentation)

The stock of the company generated returns of 28.35% over a period of 1 year. Currently, the stock is trading at a market price of $36.780, up 0.41% on 12 September 2019 (AEST – 1:33 PM).

The Star Entertainment Group Limited

The Star Entertainment Group Limited (ASX: SGR) actively manages integrated resorts. It additionally, provides entertainment, hospitality services and gaming.

Dividend: The company recently updated that it will be paying a dividend of AUD 0.1000 per ordinary share, on 26 September 2019.

FY19 Performance: During the year, the company generated statutory net revenue of $2,158 million, up 3.6% on prior corresponding period. Statutory EBITDA for the period stood at $553 million, up 14.1% on prior corresponding period. Statutory NPAT was reported at $198 million, representing an increase of 33.7% on prior corresponding period.

Financial Highlights (Source: Company Presentation)

Outlook: The company expects significant growth and maintenance capital works to be completed by end of FY20. Group capex and JV contributions are expected to decline from the previously issued guidance over the medium term.

Guidance (Source: Company Presentation)

The stock of the company generated returns of 14.63% over a period of 1 month. Currently, the stock is trading at a market price of $4.330, up 2.364% on 12 September 2019 (AEST – 2:17 PM).

Tabcorp Holdings Limited

Tabcorp Holdings Limited (ASX: TAH) operated in the business of providing gambling and entertainment services.

Dividend: The company recently released an announcement for payment of dividend amounting to AUD 0.1100 on 20 September 2019.

Financial Results: In FY19, the company’s revenue and EBITDA increased by 8.7% and 7.6%, respectively. The period was marked by record result from Lotteries & Keno on the back of successful game portfolio initiatives, strong growth in digital and retail channels and favourable jackpots.

Financial Summary (Source: Company Presentation)

The stock of the company is currently trading at a market price of $4.790, up 0.419% on 12 September 2019 (AEST – 2:27 PM).

REA Group Limited

REA Group Limited (ASX: REA) is a provider of property and property-related services across Australia and Asia.

Director’s Interest: The company recently updated that Tracey Fellows, one of the directors, disposed 9,100 ordinary shares for a consideration of $956,428.

Dividend: As per a recent notification, the company will be paying a dividend amounting to AUD 0.6300 per share on 19 September 2019.

FY19 Results: During the year ended 30 June 2019, the company generated revenue amounting to $874.9 million, up 8% on prior corresponding period. EBITDA for the year stood at $501.2 million, up 8% on prior corresponding period. During the year, the company generated net profit after tax amounting to $295.5 million, up 6% on the previous year.

FY19 Results (Source: Company Reports)

The stock of the company generated returns of 29.17% over a period of 6 months. Currently, the stock is trading at a market price of $104.420, down 0.22% on 12 September 2019 (AEST – 2:44 PM).

QBE Insurance Group Limited

QBE Insurance Group Limited (ASX: QBE) operated in the insurance space and primarily engaged in the business of underwriting general insurance and reinsurance risks.

The company recently appointed Todd Jones as the CEO, North America, in place of Russ Johnston.

1H19 Results: During the half, the company reported a statutory net profit after tax amounting to $463 million, up 29% from $358 million in prior corresponding period. Cash profit after tax amounted to $520 million, up 35% in comparison to prior corresponding period. The company’s debt to equity ratio reduced to 36.8%, from 38.0% in FY18.

Operating Results (Source: Company Presentation)

FY19 Targets: The company is expecting FY19 operating ratio in the range of 94.5% - 96.5%. Net investment return for the year is expected to be between 3.0% - 3.5%.

The stock of the company is currently trading at a market price of $12.480, down 1.188% on 12 September 2019 (AEST – 3:02 PM).


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