Regular dividend payouts form an essential component of the total return which the shareholder gets from the shares of the companies over time. With the prevailing uncertainty in the market, dividends have become extremely desirable. The fact that payouts are the first to get slashed when there exists uncertainty in the market cannot be ignored. This was evident during the pandemic.
There are multiple ways to assess dividends, as well as potential traps. Hence it is crucial to investigate the most useful measures. These are:
- It is always attractive to see stocks with a high dividend yield. But we need to be careful with stocks that provide excessive dividend (usually over 10%).
- Consistent growth in dividend
- Dividend safety is the third pillar which gives an idea of whether the Company can fund the payout or not. It is calculated as dividing earnings per share over dividend per share. If the multiple is below one, then we consider that the Company cannot fund the payout from its earnings.
Keeping the points mentioned above in mind, let us look at three ASX-listed dividend-paying stocks with an annual dividend yield in the range 5%-10%.
Smartgroup Corporation Ltd (ASX:SIQ)
Smartgroup Corporation Ltd provides salary packaging administration and fleet administration services. The Company has consistently provided its shareholders with dividend since March 2019.
The Company is providing an annual dividend yield of 6.06%. The Company paid a fully franked dividend of A$0.17 for 1H FY2020 ended 30 June 2020 on 16 September 2020.
At AEDT 2:21 PM, SIQ shares were trading at A$6.365, up 0.236% from the previous close. SIQ has a market cap of A$843.41 million.
Pendal Group Limited (ASX:PDL)
Global asset management company Pendal Group Limited has consistently provided a dividend since December 2018. Below is the image for reference.
Pendal Group would be providing a 10% franked dividend of A$0.22 for FY2020 (ended 30 September 2020) on 17 December 2020. The annual dividend of the Company is 5.13%.
At AEST 2:21 PM, PDL shares were trading at A$7.020, down 2.636% from its previous close. PDL has a market cap of A$2.33 billion.
Perenti Global Limited (ASX:PRN)
Diversified global mining services group, Perenti Global Limited provided a fully franked dividend of A$0.03 for FY2020 (ended 30 June 2020) on 03 November 2020. The Company has been consistent in paying a dividend since October 2020. Below is the image for reference.
The annual dividend yield of the Company is 5.22%.
At AEST 2:22 PM, PRN shares were trading at A$1.422, up 6.156% from the previous close. PRN has a market cap of A$943.75 million.