Summary

  • In 1H FY 2020, HGH posted growth of 20% as compared to 1H FY 2019 in NPAT to $39.9 million. It declared interim dividend amounting to 4.5 cps, a rise of 1.0 cps from 1H FY 2019.
  • Despite the fall of 26% in profit from continuing operations, CEN’s annual dividend stood at 39 cents per share which is in line with the last year.
  • GNE declared final dividend of 8.675 cps, and it will be paid on September 25, 2020.

When somebody buys a share of the company, he or she becomes eligible for the dividend payments. Some market participants decide to purchase stocks for the purpose of capital appreciation and some investors invest only to take dividends.

Let us look at the importance of dividends.

Dividend is not a fixed income, but generally, investors rely on it as a source of income as the companies pay dividend from time to time. For the younger generation, having other sources of income as well, re-investing the amount can be considered as a feasible option.

Why do companies pay dividend?

Dividend is considered as a reward to the company’s investors, for keeping their trust on the company. Generally, if the company pays high dividend, it is believed to be doing well. It can be said that the companies having robust balance sheet and financial position can declare decent dividends.

Recent trends in dividend stocks

Due to the ambiguity surrounding the blows of Coronavirus and related risks, several companies have opted to stop their dividend payments till issues get resolved. In a country like New Zealand, where dividend stocks have always been considered as an attractive investment, it has become difficult for the investors to select the right stocks for their portfolio.

Let us have a look at some companies declaring dividends in NZ.

Heartland Group Holdings Limited (NZX: HGH)

For the six months ended 31 December 2019, the company reported a net profit after tax of $39.9 million, an increase of 20.4% from 1HFY19. Receivables rose by $177 Mn primarily due to growth in Reverse Mortgages, Business Intermediated, Motor, Harmoney and Open for Business (O4B), offset by decreases in non-core lending, specifically Business and Rural Relationship.

Total assets increased by $263 million (11% annualised growth), mainly led by the increase in net finance receivables.

Heartland has declared an interim dividend (fully imputed) of 4.5 cps, an increase of 1.0 cps from 1HFY19.

Dividend per share (cps) (Source: Company Reports)

Contact Energy Limited (NZX: CEN)

For the 12 months ended 30 June 2020, the company reported statutory profit of $125 million. This was $220 Mn lower than FY 2019, but last year consisted a $170 Mn gain on sale of Rockgas business and Ahuroa gas storage facility. EBITDAF from continuing operations was down by $54 million or 11% on last year to $451 million, due to a combination of lower renewable generation, lower wholesale prices as well as impact of increasing costs of thermal generation and restricted gas supply.

The company has decided to pay an annual dividend of 39 cents per share, which is in-line with previous year. The company approved a final ordinary dividend of 23 cents per share which would be paid on 15 September 2020. An interim ordinary dividend amounting to 16 cps was also paid in the month of April 2020.

Key Financial Metrics (Source: Company Reports)

Australia and New Zealand Banking Group Limited

For the third quarter to 30 June 2020, Australia and New Zealand Banking Group Limited (NZX: ANZ) has reported an unaudited statutory profit of $1,327 million with an unaudited cash profit from continuing operations of $1,498 million. The bank has also declared a interim dividend (full franked) amounting to 25 cents per share.

The bank’s capital position remains strong, with a Level 2 Common Equity Tier 1 capital (CET1) ratio of 11.1% at 30 June 2020.

Key Financial Metrics (Source: Company Reports)

Genesis Energy Limited (NZX: GNE)

For the full-year ended 30 June 2020, the company reported EBITDAF of $356 million and Net Profit (NPAT) of $46 million, with underlying earnings of $53 million. The company’s overall hydro generation decreased by 491 GWh versus the prior year. Its retail business has continued its momentum from 1H, supported by increased uptake of digital products as well as promotions, such as Power Shout, which saw a record 141,000 customers participate in the month of May.

The company has declared a final dividend of 8.675 cents per share, which has a record date of 11 September 2020 and will be paid on 25 September 2020. This takes the full year dividend to 17.20 cents per share.

Spark New Zealand Limited (NZX: SPK)

For the year to 30 June 2020, the company reported revenue growth of 2.5% to $3,623 Mn. It registered 10.8% growth in cloud, security, and service management revenue and mobile service revenue rose by 3.9 percent.

NPAT rose by 4.4% to $427 Mn, mainly led by growth in EBITDAI as well as lower tax expense. The company announced H2 FY 2020 total dividend per share amounting to 12.5cps, 100% imputed, which brought total FY 2020 dividend to 25cps.

 

 


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