ALX and WOR: ASX Dividend Stocks in Focus

Highlights

• ALX reported a 6.9% increase in weighted average toll revenue in FY23.
• WOR's 1HFY24 revenue surged by 22% year-over-year.
• WOR aims for 75% revenue from sustainability projects by FY26.

Dividend stocks provide reliable income to investors, offering stability and a hedge against market volatility. They signify a company's financial health and commitment to shareholders. This article explores two dividend stocks listed on the ASX.

Atlas Arteria Limited (ASX: ALX)

ALX has a global operation specialising in toll roads. The company commands a market capitalisation of AUD 7.47 billion, as of 3 July 2024. Offering investors an annual dividend yield of 7.76%, ALX distributes dividends semi-annually.

In FY23, ALX achieved a 6.9% year-over-year increase in weighted average toll revenue and a 7.1% year-over-year increase in weighted average EBITDA. Additionally, the company reported a fixed asset turnover ratio of 8.79x for FY23, significantly surpassing the industry median of 0.93x.  

Historical financial trend

Recent business update - ALX recently announced agreements with co-investors in APRR Group, achieving several key outcomes:

• Refinancing the Financière Eiffarie debt facility in H1 2025 with reduced amortisation
• Releasing €200 million for debt payments in H2 2024
• Increasing Eiffage's equity in MAF2 by €55.5 million, slightly diluting Atlas Arteria's economic interest in APRR Group to 30.82%.

Outlook – The company expects a dividend distribution of 40 cents per share in FY24.

Stock performance – The stock price of ALX has tumbled by around 5.04% in the past month whereas, it has declined by around 11.48% in the past six months.

ALX Daily Technical Chart (Data source: EODHD/Others, as of 03 July 2024)

Worley Limited (ASX: WOR)

Worley is engaged in providing engineering design and project delivery services, catering to the energy, chemicals, and resources sectors. The company has a market cap of AUD 7.79 billion, as of 3 July 2024. Its annual dividend yield stands at 3.38% and it pays dividends on a semi-annual basis.

In 1HFY24, WOR’s aggregated revenue surged by around 22% compared to pcp. Similarly, underlying EBITDA surged by 28%, mainly due to higher professional services revenue, a diverse project mix, and rate improvements.

Historical financial trend

Recent business update- In May, Worley announced a strategic alliance agreement and a 20-year license agreement with Nano One Materials Corporation (TSX:NANO). The agreements aim to develop, market, license, and deploy cathode active material production facilities.

Outlook – WOR projects aggregated underlying EBITA margin for FY24 to range between 7.5% and 8%. Additionally, the company targets that 75% of its total revenue will come from sustainability-related projects by the conclusion of FY26.

Stock performance – The stock price of WOR has dipped by around 0.62% in the past month whereas, it has tumbled by around 14.62% in the past six months.

WOR Daily Technical Chart (Data source: EODHD/Others as of 03 July 2024)

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 3 July 2024. The reference data in this report has been partly sourced from EODHD/Others.

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