AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Summary
- Dividend is part of a Company’s earnings distributed to its investors, enabling them to consistently create long-term capital by the constant stream of income.
- WMI’s portfolio has returned 15.9% per annum since its inception in June 2017, and lately, declared an ordinary dividend and special dividend. On August 3, WMI extended SPP to its stakeholders, as an opportunity to grow their stake in the entity by purchasing up to $30k worth of ordinary and 100% paid WMI shares.
- Recently, WMI announced a fully franked dividend of 3 cps (cents per share) and a special fully franked dividend of 3 cps, bringing FY2020 fully franked full year dividend amount to 9 cps.
- RFF has an annual dividend yield of 5.19% (as on 6 August), and its earlier prediction of 11.28 distributions/unit for FY21 remains intact.
Dividend is part of a company’s earnings distributed to a class of its stakeholders. The amount can be provided in the form of cash payment, shares or any other way decided by the company's Board of directors. These payments are made by publicly listed companies as a reward to investors for putting money in their venture. Dividends are mostly part of the profits that a company shares with its shareholders.
ALSO READ: Dividend Stocks to Beef Up Portfolio Amidst Low-Interest Rate Regime
The stock market correction amid COVID-19 has emphasised the importance of following value investing strategies, including shortlisting companies based on their dividend yields.
Dividend shares listed on ASX can be one of the best ways to invest one’s money amid COVID-19. An entity that is paying dividend during these challenging times will be attractive to investors and investing in dividend-paying stocks is a great method to accumulate long-term wealth.
Let's have a look at 2 dividend stocks on ASX.
WAM Microcap Limited
WAM Microcap Limited (ASX:WMI) ended the day’s trading session at $1.45, up 0.694% on 6 August.
WAM Microcap is a listed investment company based in Australia that looks for making investment primarily in small and micro-cap companies. It is managed by Wilson Asset Management, which operates other listed investment companies as well.
FY20 Investment performance
The investment portfolio of WMI outperformed S&P/ASX Small Ordinaries Accumulation Index by 17.5% after increasing 11.8% over the 12-month period to 30 June 2020. WAM Microcap investment portfolio has surged 15.9% pa, topping the index by 10% pa since its inception in June 2017. The Company had profits reserve of 28.7 cents per share, as of 30 June 2020 before paying out dividends.
Source: ASX
Dividend
WAM Microcap declared fully franked final dividend of 3 cps (cents per share), indicating a 33.3% rise compared to a year ago and a special fully franked final dividend of 3 cents per share. This resulted in FY20 fully franked dividend to 9 cents per share, up by 33.3% compared to a year ago.
- FY2020 full-year dividend gives shareholders a fully franked dividend yield of 6.5% and a grossed-up dividend yield of 9.4% based on the share price of $1.375, as at 31 July 2020
- WMI has paid 15.75 cents per share in fully franked dividends since its inception.
- Given adequate profit reserves, franking credits and wise business practices, the Board remains committed to paying a rising stream of fully franked dividend to shareholders
ALSO READ: Dividend Stock Charter: TAH, APA, BKW, SOL
WMI announced SPP and Placement
On 3 August, WAM Microcap's Board announced SPP (Share Purchase Plan) for its stakeholders that give them the opportunity to obtain up to $30,000 ordinary fully paid shares without incurring any brokerage.
- Participants in SPP and Placement would be eligible to get final dividend and special dividend.
- Board intends to offer existing WMI professional and sophisticated investors the ability to participate in a Placement at the same price and terms as SPP.
- The issue price for each SPP share will be equal to WMI's net tangible asset (NTA) backing per share, as at 31 July 2020.
- WMI's pre-tax NTA backing per share stood at $1.31 per share, as at 30 June 2020.
As per WMI, the key objective of SPP and capital raising is to increase the Company's assets, its business presence, boost broker prospects and analyst reporting, raise financial planners' participation and obtain further exposure to investment opportunities such as pre-IPO capital raising.
Rural Funds Group
Rural Funds Group (ASX:RFF) is the owner of a diversified portfolio containing high quality Australian agricultural assets and seeks to create a steady income stream by leasing its properties to appropriate counterparts and capital growth by the market appreciation of such properties.
RFF closed the day flat at a price of $2.09, on 6 August. Contracted
RFF recently contracted to purchase 5,409 hectares of sugar cane farms in Maryborough, Queensland, and 8,060 ML of water entitlements from MSF Sugar Pty Ltd (MSF) for $81.1 million.
About 2,200 hectares of land will be converted into a macadamia orchard farm while the majority would be used for cropping, with settlement expected to happen in October 2020, and will be financed from an approved expansion to RFF's debt facility.
RFF’s FY21 distributions per unit of 11.28 cents remains unchanged and has an annual dividend yield of 5.19% based on the current share price (as on 6 August).
