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Highlights
Australian equites have traded on a weak note so far this year.
The stock market gains have remained low on account of high volatility and uncertainty.
As a result, investors would closely be looking at income stocks.
The Australian share market is currently seeing a period of volatility and uncertainty. The benchmark ASX 200 index has fallen over 13% on a year-to-date (YTD) basis. In such a scenario, investors would be closely looking at income stocks with decent dividend paying history.
(High dividend-paying shares are not good always. A stock’s dividend yield might be on the higher side due to a significant fall in its stock price, implying financial trouble that could impact its ability to deliver future dividends)
On this note, let’s look at two ASX-listed income shares with over 5% annual dividend yield:
Charter Hall Long WALE REIT (ASX:CLW)
Charter Hall Long Wale REIT is a real estate company which makes investments in Australian real estate assets. The firm’s objective is to set investors up for both income and capital growth so that they can enjoy stable and secure income through exposure to a portfolio with a long WALE(weighted average lease expiry).
The company’s portfolio has nearly 550 properties with a combined worth of AU$7 billion. The company focuses on high-quality real estate on long-term leases. It has a 99.9% occupancy rate. Its weighted average lease expiry (WALE) was 12.2 years, as of December 2021.
The REIT’s rental income growth is driven by annual increases in all leases. The company aims an operating earnings per security (EPS) of at least 30.5 cents in FY22. It implies a Y-O-Y growth of nearly 4.5%. The company has an annual dividend of yield of 6.48%, as of last Friday’s closing share price.
Pacific Current Group Ltd (ASX:PAC)
Pacific Current Group is a multi-boutique asset management firm with investments in 16 boutique asset managers globally. The company combines capital with strategic business development to help businesses grow.
The company has recently witnessed a healthy growth of its portfolio’s funds under management (FUM). In the first half of FY22, FUM surged 16% to US$165 billion, or 11% excluding the US$35 million new investment in Banner Oak. Underlying revenue rose 21% and underlying net profit after tax (NPAT) soared 26%. The healthy earnings helped the company boost its interim dividend by 50%.
The company’s portfolio FUM fell US$1.4 billion to US$164 billion, as of 31 March 2022. However, in native currencies, US dollar-denominated fund managers registered a 2.1% rise in FUM, and Australian dollar-denominated fund managers witnessed a 3% rise.
The company has an annual dividend yield of 5.71%.
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