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Consistent or Stable income is a major objective of an investor for every penny invested. Consistent income is generally known as a source which provides a decent amount of wealth despite all ups and downs in the economy. When it comes to investing in the stock market, that source of income is dividend income or dividend-paying companies.
To recall, Dividend is an amount paid by the company from their annual earnings in order to retain shareholders. Moreover, the payment of cash dividend is generally a common method followed. However, the company also pays dividend in the form of issue of shares or another asset. Dividends are generally of two types:
- Interim Dividend: Paid to shareholders during the mid of the financial year.
- Final Dividend: Generally, the company announces this on the release of its final year results.
However, in some cases company also declares a special dividend to win the trust of shareholders on the back of low debt, increased liquidity position.
In order to find good dividend stock, higher dividend yield happens to be one of the primary measures. Dividend yield expresses how much an organisation pays out every year of its retained earnings. In the economic downturn, when the price of shares is going down, dividend yield of the company rises.
Let us now look at some of the ASX-listed companies, which are known for paying a consistent amount of dividend and possess a decent annual dividend yield:
Transurban Group
Transurban Group (ASX:TCL) is an owner, operator and developer of electronic toll roads and intelligent transport systems. For the 1H FY20 ended on December 31, 2019, TCL reported a rise of 2.3% in average daily traffic and its proportional revenue stood at $1,396 million, which has increased by 8.6%. During the period, the company reported proportional earnings before interest, tax, depreciation and amortisation and before significant items amounting to $1,094 million with a rise of 9.5%. It reported underlying cost growth of 2.0%, which represents cost discipline as well as recent investments providing scale benefits.
On the operational front, the company witnessed progress on its other major projects around the Greater Washington Area which would extend the 95 Express Lanes to the south, and the 495 Express Lanes northwards throughout the Maryland border.
Distribution paid for 1H FY20
- Transurban Group has paid a distribution amounting to 31.0 cents per share for the half-year ended 31st December 2019. The said amount of distribution mainly consists of the distribution of 29.0 cps from Transurban Holding Trust and controlled entities as well as fully franked dividend amounting to 2.0 cps from Transurban Holdings Limited and controlled entities.
- Moreover, for FY20, the company anticipates paying a distribution of 62.0 cents per security, reflecting the growth of more than 5% as compared to the distribution of FY19.
The stock of TCL closed the day’s trade at $10.500 on 20 March 2020, an increase of 4.582% compared to the previous closing price. The Company has a market capitalisation of $27.46 billion while the total shares outstanding stand at 2.74 billion. The annual dividend yield of TCL stood at 6.08%, and the high and low price of $16.440 and $10.260, respectively during last 52 weeks. The stock of Transurban has generated a return of -35.48% and -32.02% during the last three-month and six-month, respectively.
Contact Energy Limited
Contact Energy Limited (ASX:CEN) is one of the largest company engaged in electricity generation and retailing of electricity in New Zealand. It officially got listed on Australian Stock Exchange in 2015.
For the 1H FY20 ended on December 31, 2019, the company reported a statutory profit amounting to NZ$ 59 million. EBITDAF from continuing operations witnessed a fall of NZ$ 57 million and stood at NZ$ 221 million. This decline was because of multiple reasons including rising thermal generation costs and lower sales to commercial and industrial customers.
In order to please shareholders, the company declared an interim dividend of 16 cents per share, which is payable on 7th April 2020. However, for the full year 2020, the company expects to pay a dividend of 39 cents per share.
Operating Report for February 2020
Recently, the company notified the market with the operating report for the month of February 2020 and outlined the following:
- During the period, the customer business of the company has recorded - mass market electricity and gas sales of 239 GWh. Mass market electricity and gas netback for the period stood at NZ$ 93.15/MWh.
- While wholesale business reported- contracted wholesale electricity sales of 629 GWh, including the ones sold to the Customer business.
On the outlook front, Contact Energy Limited is focussed on delivering its transformation programme for decreasing controllable costs, and capture value from scale efficiencies via geothermal development and leveraging its customer systems and lean operating model.
The stock of CEN closed the day’s trade at $5.310 on 20 March 2020, an increase of 1.919% compared to the previous closing price. The Company has a market capitalisation of $3.74 billion while the total shares outstanding stand at 718.08 million. The annual dividend yield of CEN stood at 6.71%, and the high and low price of $8.450 and $5.000, respectively during last 52 weeks. The stock of Contact Energy has generated a return of -26.31% and -34.05% during the last three-month and six-month, respectively.
The Star Entertainment Group Limited
The Star Entertainment Group Limited (ASX:SGR) mainly operates The Star Sydney, The Star Gold Coast and Treasury Brisbane and aims to be Australia’s leading integrated resort company.
For the 1H FY20, for the period ended on December 31, 2019, The Company declared fully franked interim dividend amounting to 10.5 cents per share at the company tax rate of 30%. SGR will pay the said dividend on 1st April 2020 to the shareholders with the record date of 26th February 2020.
The company stated that the trading in early 2H FY20 indicates challenging conditions, which is impacted by ongoing cautious consumer environment, bushfires and coronavirus. SGR added that COVID-19 has affected international and domestic visitation, mainly in Sydney. During the period, the company has reported growth in normalised EBITDA with strong domestic results. For FY20, the company expects net funding costs in the range of $45million-50 million.
In order to support the Government’s efforts for evolving COVID-19, the company has implemented various precautionary measures, which includes social distancing:
- The company exercised deactivation of every second gaming machine and electronic table game in order to create additional distance. It also reduced capacity at table games.
- Apart from the above step, it has limited the number of people in individual food and beverage, banqueting and conferencing, and theatre facilities to under 500 persons with limited density for each outlet.
The stock of SGR closed the day’s trade at $1.615 on 20 March 2020, a decline of 5.279% compared to the previous closing price. The Company has a market capitalisation of $1.56 billion while the total shares outstanding stand at 917.32 million. The annual dividend yield of SGR stood at 12.02%, and the high and low price of $4.930 and $1.610, respectively during last 52 weeks. The stock of Star Entertainment has generated a return of -64.18% and -60.26% during the last three-month and six-month, respectively.
