2 Supermarket Giants on a downtrend - Woolworths and Wesfarmers

  • Aug 20, 2018 AEST
  • Team Kalkine
2 Supermarket Giants on a downtrend - Woolworths and Wesfarmers

Woolworths Group Limited (WOW

Woolworths shares were initially dragging the Australian share market lower, but later slipped down 0.98% to $29.31 by mid-day trading on August 20, 2018, despite posting 12.5% jump in profit for Fiscal Year 2018. Retail giant posted $1.7 billion profit for the year ending 30 June 2018, an increase of 12.5% on previous corresponding year. Revenue was up by 3.5% to $57.2 billion as Metro sales grew in double digit, WooliesX headed for digital enhancements and BIG W is taking a turnaround.

Australian supermarket sales grew 4.3 per cent, while Comparable sales at Woolworths' bottle shop chains grew 3.6 per cent. However, their earnings growth confined to 9.6 per cent and 2.8 per cent, respectively.

But Woolworths’ Australian food business observed slow momentum in sales at the start of FY19 as customers backflipped by plastic bags bans while rival, Coles bagged attention with Little Shop miniature.

The annual ordinary dividend yield of the retailer is 93 cent per share with the final dividend of 50 cents per share, fully franked. Woolworths’ alliance with Caltex benefitted the investors with special dividend of 10 cents per share as co-branded fuel outlets allowed for standard cost reduction. Though customers’ satisfaction was high during the year, investors seem to be unsettled on Woolworths’ FY18 performance as they stocked down on early trade.

Wesfarmers Limited (WES)

Wesfarmers dropped down by 1.55% to $51.715 as company goes ex-dividend on Monday, 20 August 2018. That means buyers no longer have the right to receive the most recently declared dividend, which is nothing less than annual yield of 223 cents per share for FY18.

In FY18 results declared last week, company posted striking decline of 58.3% in Net Profit After Tax to $1.2 billion, mainly driven by $1.65 billion loss from Bunning UK and Ireland venture.

Group’s earnings before interest and tax was $2.8 billion, down 36.5% in comparison to previous year. The hardware chain reported earnings before interest and tax of $1.5 billion, an increase of $0.17 billion from last year. Earnings for BANZ increased 12.7% to $1.5 billion with revenue growth of 8.9%.

The group’s department stores presented mixed results where Kmart sales was up 8% while Target sales dropped down by 4.7%. Coles’ Little Shop giveaway has given butterflies to peer retailers on supermarket frontiers but in recent results failed to show earnings growth, posting EBIT of $1.5 billion in FY18, down from $1.6 billion in FY17.

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

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.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK