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Each single investor looks for feasible return while making investments such as dividend yield, return-on-equity, etc. However, dividend payment is not an obligation for the company, but in case of surplus earnings or to boost shareholdersâ confidence, the companies pay dividends.
Tamawood Limited (ASX:TWD)
Tamawood Limited (ASX: TWD) provides home design and preliminary project management services and associated activities. Recently, the company via a release reported that it has downgraded its revenue for the year ended 30th June 2019. In addition, the preliminary net profit before tax was 48% lower in 2019 as compared to the previous year 2018. The profit after tax will likely be adversely impacted by the tax adjustments, which are yet to be estimated. Previously, the company also proposed the listing date for SenterpriSys Limited.
As per the release dated 10th May 2019, the company reported an improvement in appointments and sales for the three months to April 2019, regardless of Easter break, school holidays, the appointments and sales are at levels, which have been experienced in the fiscal year 2017.
The company via a release announced fully franked dividend of 27 cents with an additional special dividends of 6 cents, which have been paid by the company in April 2019. The total dividend equated to 33 cents fully franked for the year 2019. This has brought the companyâs franking account balance close to zero. The record date for the dividend was 11th March 2019, which was paid on 18th April 2019. The annual dividend yield of the company stood at 7.18%, with franking of 100%. The following picture provides an idea of dividend yield. In the past five years, the company provided dividend of 0.25 cents, 0.25 cents, 0.27 cents, 0.27 cents and 0.33 cents for financial years 2015, 2016, 2017, 2018, 2019, respectively.
Dividend Yield Data (Source: Company Reports)
The company reported gross margin, EBITDA margin and operating margin of 19.3%, 7.9% and 7.7% in 1H FY19 as compared to 20.0%, 9.5% and 9.4% in 1H FY18, respectively. The net margin of the company stood at 5.4% in 1H FY19 when compared to 6.5% in 1H FY18. The company posted a return-on-equity of 23.6%, which can be considered as a good return to shareholders. The company reported an asset-to-equity ratio of 1.93x in 1H FY19.
The stock of TWD, at market close on 26th July 2019, was trading at $3.650 per share, down 3.694% during the dayâs trade, with a market cap of $104.65 million. The stock has delivered return of 0.53% for the one month and 9.86% for the three month period, respectively.
CSL Limited (ASX:CSL)
CSL Limited (ASX: CSL) is involved in the manufacturing, development and marketing of pharmaceutical and diagnostic products, cell culture media and human plasma fractions. The company was listed on Australian Stock Exchange in the year 1994. Recently, the company via a release dated 17th July 2019, announced that Gordon Naylor will be retiring this year and Ms Anjana Narain will be replacing Mr Naylor as Executive Vice President and General Manager of Seqirus business, effective from 1st August 2019. Additionally, the company reported sales revenue of US$4,505 million in 1H FY19, reflecting a rise of 11% when compared to 1H FY18, driven by a rise in usage of immunoglobulin products used for chronic therapies and sales of transformational Hereditary Angioedema product, HAEGARDA® which has tripled during the period.
As per the 2018 Annual Report, Directors of the company had resolved to settle the final dividend of US$0.093 per ordinary share, which was unfranked. As a result, the dividend for the FY18 reached to US$1.72 per share. Additionally, the company also declared an interim dividend of US$0.85 per share, reflecting a rise of 8% as compared to 1H FY18. When converted into Australian currency, the companyâs interim dividend stood at $1.20 per share, reflecting a rise of 20%. The ex-date for the interim dividend was 13th March 2019, with a record date of 14th March 2019. The company paid the dividend on 12th April 2019. Looking at the past five yearâs dividend history, the company paid dividends of 1.64 cents, 1.70 cents, 1.75 cents, 2,28 cents and 1.20 cents in 2015, 2016, 2017, 2018 and 2019, respectively. CSLâs annual dividend yield has been reported at 1.09%.
Turning to the returns to shareholders, CSL limited posted return-on-equity of 26.0% in 1H FY19 in comparison to the industry median of -5.3%. This showcases that the company is providing better returns to shareholders compared to the broader industry.
The gross margin of the company stood at 58.3% in 1H FY19, reflecting the growth of 1.4% on a Y-o-Y basis. The company delivered an EBITDA margin and operating margin of 39.5% and 32.4% in 1H FY19 against 41.7% and 34.3% in 1H FY18, respectively. In addition, it posted a net margin of 25.7% in 1H FY19 as compared to the negative industry median numbers. The current ratio of the company stood at 2.93x in 1H FY19, reflecting a growth of 2.5% on Y-o-Y basis. This represents that the company is improving its position to address its short-term obligations. When it comes to leverages, the company delivered the asset-to-equity ratio of 2.38x in 1H FY19 against the industry median of 1.53x and debt-to-equity ratio stood at 0.96x in 1H FY19 when compared to the industry median of 0.25x.
The stock of CSL Limited, at market close on 26th July 2019, was trading at $226.690 per share, down 0.575% during the dayâs trade, with a market capitalisation of $103.32 billion. The stock has generated returns of 6.36% and 14.48% for the one month and six month period, respectively.
ERM Power Limited (ASX:EPW)
Australia registered company, ERM Power Limited (ASX: EPW) is involved in the operations of electricity sales, generation and solutions businesses. As per the Investor Presentation, the company is meeting the end-to-end customer supply and demand needs. The company is well placed to manage and execute the regulatory changes, which includes the introduction of Retailer Reliability Obligation, Introduction of the 5-minute Settlement and a new National Emissions Policy. The company further added that it has a significant interest in Solpod with property giants like GPT Group and Property New South Wales, which have signed up for an Australian Renewable Energy Agency co-funded pilot program.
Additionally, the company reported an underlying net profit after tax of $14.9 million in 1H FY19 as compared to $17.2 million in 1H FY18 and underlying EBITDAF of $47.3 million in 1H FY19 against $49.7 million in 1H FY18. In 1H FY19, the company wrapped up the acquisition of Out Performers, which was in accordance with its strategy to deploy capital in order to expand Energy Solutions business and increase the long term shareholder value. Previously, the company also provided updates on its Buy Back program.
Looking at the dividend side of things. The company declared a fully franked interim dividend of 4.5 cents per share, which was paid on 17th April 2019. The record date for the same was 27th March 2019.
Previously, ERM Power also declared a fully franked dividend of 4 cents per share on 23rd August 2018, which was paid by the company on 10th October 2018 to the shareholders, with a record date of 17th September 2018. However, EPWâs dividend reinvestment plan was not applied to this dividend. In the series of declaring dividends, ERM Power declared a fully franked special dividend of 3 cents per share, which was paid on 17th April 2019, with a record date of 27th March 2019.
Turning to the returns to shareholders, the company reported return-on-equity of 24.5% in 1H FY19 as compared to the industry median of 3.2% and reported Y-o-Y growth of 12.6%. This implies that the company is providing better returns to the shareholders when compared to the broader industry.
The company reported EBITDA margin of 2.9% in 1H FY19 as compared to the industry median of 32.3% and posted a net margin of 4.8%, reflecting a Y-o-Y growth of 0.6%, which represents that the company is improving its position to effectively convert its top line into the bottom line. EPW delivered current ratio of 1.16x in 1H FY19 as compared to the industry median of 0.85x. This implies that the company is in a sound position to meet its short-term obligations. When it comes to leverage, it posted asset-to-equity ratio of 4.03x in 1H FY19 against the industry median of 1.94x and delivered debt-to-equity ratio of 0.53x in 1H FY19 when compared to the industry median of 0.36x.
The stock of ERM Power Limited was trading, at market close on 26th July 2019, at a price of $1.805 per share, down 0.278% during the dayâs trade, with a market capitalisation of $450.52 million. The stock has delivered return of 3.75% for the three months and 16.79% for the six month period, respectively.
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