Dividend Stocks to Ascertain Regular Income: MND, AZJ, GPT

Summary

  • Amid uncertain and unpredictable conditions driven by COVID-19, few businesses have continued to fetch market attention for making dividend distributions.
  • Monadelphous Group registered a 2.6% increase in FY20 revenue and declared a final dividend of 13cps. The engineering group entered FY21 with a solid forward workload.
  • Aurizon Holdings reported solid FY20 result with EBIT of $909 million, up 10%, and a final dividend of 13.7cps. FY21 group EBIT guidance is in the range of $830 million to $880 million.
  • GPT Group announced an interim distribution of 9.30cps while reporting a 23.3% decline in H1 FFO. The company remains well placed despite the current uncertainty, backed by factors like strong balance sheet and high-quality asset portfolio.

With uncertainties around the COVID-19 pandemic, dividends have been under pressure. However, there are some businesses that have been attempting to stand strong. In this article, we are discussing three ASX-listed companies that have recently released financial results and declared dividends. These companies are from the industrials and real estate sectors.

Do Read: How much dividend stocks are safe to invest amid COVID-19 crisis?

Record Performance of Monadelphous’ Maintenance and Industrial Services Division, Final Dividend at 13cps

Perth-headquartered engineering group, Monadelphous Group Limited (ASX: MND) has released results for FY20 ended 30 June 2020, registering record revenue performance in maintenance and industrial services.

Source: ASX Update

FY20 result highlights included:

  • Revenue amounted to $1.65 billion, reflecting a rise of 6% over pcp. The result indicated a significant rise in shutdown and maintenance work in the resources sector, mainly in 1H FY20, as well as the commencement of several large resource construction projects.
  • Maintenance and industrial services division noted annual revenue of $1.05 billion, reflecting a 5.1% increase on the previous year. This is the third consecutive record annual revenue performance of the division.
  • MND reported a net profit after tax amounting to $36.5 million. The earning for 2H FY20 were impacted by disruption caused by COVID-19 and disappointing levels of profitability in the Water Infrastructure business.
  • Cash balance at end-FY20 stood at $208 million, reflecting a strong balance sheet despite challenging economic and operating conditions.

Since the beginning of FY20, the company secured new contracts and extensions worth around $1.2 billion, including numerous strategically important contract wins for Mondium and its rail infrastructure maintenance services business.

During 1H, the company completed a number of strategic acquisitions, adding its overseas diversification strategy into South America and expanding its service offering in the coal seam gas and rail sectors.

Do Read: How these ASX-listed Engineering Players are Performing?

The Board declared a final dividend of 13 cents per share (cps), taking the full-year dividend to 35cps, fully franked. This reflects a dividend payout ratio of around 91% of reported net profit after tax.

Entering FY21 with a solid forward workload, MND is well positioned to capitalise on opportunities and address the challenges ahead, according to Monadelphous Managing Director Rob Velletri.

Stock Performance - MND stock closed the day’s trade at $11 per share on 21 August 2020, moving up by 0.733% from its previous close. MND has a market capitalisation of $1.03 billion and annual dividend yield of 3.18%. The stock has generated returns of more than 12% in the last one month and negative 35.03% in the last one year.

Aurizon Holdings Maintained FY20 Dividends at 100% for Fifth Year

Australia’s largest rail freight operator, Aurizon Holdings Limited (ASX: AZJ) reported solid FY2020 result with EBIT in line with guidance range. The company reported group underlying earnings before interest and tax amounting to $909 million, reflecting a rise of 10% over pcp.

Underlying Net Profit After Tax for the period stood at $531 million, indicating an increase of 12% from FY19. Return on Invested Capital (ROIC) experienced a growth of 1.2ppt to 10.9% against FY19.

Source: AZJ ASX Update

The company experienced solid tonnages in Coal and Network with no significant volume impact from COVID-19. The bulk business outperformed during FY20, on the back of new contracts and efficiency improvement.

AZJ declared a final dividend of 13.7cps, franked to 70%, taking the full-year dividend to 27.4 cps, 70% franked. This represents 100% of continuing underlying net profit after tax for the fifth consecutive year.

Outlook - For FY2021, group EBIT guidance is in the range of $830 million to $880 million. Considering the current view of COVID-19 impact on coal demand, the company is expecting flat coal volumes of 210-220mt.

Stock Performance - At the close of session on 21 August 2020, the stock of AZJ traded flat at $4.660, with a market capitalisation of $8.92 billion and annual dividend yield of 5.88%. The stock has generated returns of 1.75% and negative 14.81% during the last three and six months, respectively.

GPT Group Well Placed to Manage through the Pandemic, Announced Interim Distribution of 9.30cps

GPT Group (ASX: GPT) is a leading property group of Australia, which owns and manages a portfolio of retail, office and logistics property assets in the country.

Recently, the company released activities report for the half-year period ended 30 June 2020, highlighting

  • Funds from Operations (FFO) amounted to $244.5 million, which resulted in FFO per security of 12.55 cents, a fall of 3% over pcp.
  • During 1H FY20, the company reported net tangible assets of $5.52 per security, indicating a decline of 4.8% on 31 December 2019, primarily due to decline in property valuations.
  • GPT posted net loss after tax amounting to $519.1 million, mainly due to negative property valuation movements of $711.3 million.

Source: GPT ASX Update

During the half year, the company finalised three logistics developments, with a combined value of $89.1 million and a weighted average lease expiry of 7.5 years. Also, GPT acquired two logistics facilities for a consideration of $74.6 million with a weighted average lease expiry of 7.6 years.

Do Read: How REITs are reacting to COVID-19 Pandemic?

GPT paid an interim distribution of 9.30 cents per security, which indicated a payout ratio of 99.6 per cent of free cash flow. The company closed the period with a healthy balance sheet comprising cash and undrawn bank facilities of $1.2 billion and less than $5 million of debt maturing through to December 2021.

Backed by a strong balance sheet, a high-quality asset portfolio and a very experienced management team, the company remains well placed despite the current uncertainty arising from COVID-19 pandemic, according to GPT CEO Bob Johnston.

Stock Performance - At the close of session on 21 August 2020, the stock of GPT traded flat at $3.770 per share. The company has a market capitalisation of $7.34 billion and annual dividend yield of 6.01%. The stock has generated negative returns of 6.22% and 39.39% during the last three months and six months, respectively.

Good Read: Three Unique Investment Tips to Build Recession-Proof Portfolio in COVID-19 Crisis

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