- COVID-19 pandemic is likely to affect retirement portfolios due to market volatility, leaving investors worried.
- Investing in diversified stocks when they are in their growth phase can help an investor in enduring an overall volatility.
- Fisher & Paykel, Summerset, Ryman, Goodman are some of the stocks that can be a good bet for retirement planning during COVID-19 crisis.
The concerns about the spread of coronavirus and financial shutdown have been on a rise, this year. Many retirement portfolios are not resistant to market volatility, which makes a lot of people worry about their retirement savings.
Let’s have a look at the performance of 6 NZX listed stocks for retirement planning.
Ryman Healthcare Limited (NZX:RYM)
RYM’s stock price has increased by more than 33% in the past 6 months. At the time of writing, Ryman healthcare’s shares were trading at $14.80, decreasing by 2.05%, on 15 October.
RYM is on track to roll out 5 more villages in Victoria by 31 December, though there is a slight possibility for a delay. COVID-19 bolstered the attraction for its villages as they have been viewed as safe haven by the residents.
RYM elevated the full-year dividend to 24.2 cents per share in June.
Oceania Healthcare Limited (NZX: OCA)
OCA’s stock price has increased above 54% in the past 6 months. On 15 October, Oceania’s shares were trading at $1.38, up by 6.15%.
The Group’s audited underlying EBIDTA stood at $63.5 million for the year ended 31 May 2020, in line with pcp. The Group had announced its final dividend of 1.2 cents per share in July 2020, which was later paid on 17 August 2020.
Let’s have a look at OCA’s financial metrics for year ended 31 May 2020.
Source: OCA Annual Report, dated: 23 July
Arvida Group Limited (NZX:ARV)
ARV’s stock price has increased by more than 31% in the past 6 months. At the time of writing, Arvida Group’s shares were trading flat at $1.8, on 15 October.
ARV witnessed a rebound in sales and settlements after activity resumed in May. On 31 August, the Group announced a Q1 cash dividend for FY21 of 1.2 cents per share.
Summerset Group Holdings Limited (NZX:SUM)
SUM’s stock price has increased by more than 603 in the past 6 months. Summerset Group’s shares, at the time of trading were trading at $10.35, increasing by 3.50, on 15 October.
Let’s have a look at SUM’s financials for 1H20.
Source: SUM update, dated: 17 August 2020
SUM reported 225 sales of occupation rights for Q3 of 2020, led by the demand for safety and security in retirement villages post lockdown.
Fisher & Paykel Healthcare Corporation Limited (NZX:FPH)
FPH’s stock price has increased by more than 31% in the past 6 months. On 15 October, Fisher & Paykel was trading at $34.93, decreasing by 2.29%.
FPH’s hospital hardware sales grew by 390% in April-July 2020. The Company is expecting NPAT between $365 million -$385 million for 2021.
Goodman Property Trust (NZX:GMT)
GMT’s stock price has increased by more than 14% in the past 6 months. At the time of writing, Goodman Property was trading at $2.43, marginally down by 0.61% on 15 October.
The Group has been pursuing an investment strategy focused on urban logistics. In September, GMT acquired specific properties in Otahuhu for $70 million. It expects to pay cash distributions of at least 5.3 cents per unit in FY21 under new distribution policy.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)
The sole motive of an investor is to grow his/her capital over a period to meet financial goals. In pursuit of this, investors are in a constant hunt for stocks that have capital appreciation potential and those that pay dividends, which one can reinvest to further increase the rate of return. Dividends can also be seen as an incentive for an investor to hold the stock for a longer duration of time, especially when the overall market enters a bear phase, or the underlying invested company goes through business troughs and peaks.
Stocks that have high dividend yield are considered to be a safe bet, but to take a blanket call just on dividend yield would be naive, as there is more to be analyzed to make a sound judgment on the ability of the business to keep paying a dividend over long periods.
Companies over time, increase dividend payout, and in the long term, an astute investor can reap high rewards by picking good dividend stocks, across sectors, thus diversifying and reducing the volatility of one’s portfolio. Investors in New Zealand can reap the benefit of dividend imputation credit and further increase their overall return on investment.
So, how should one pick a dividend stock? How to invest in stocks that have the wherewithal to not only pay a dividend but also increase dividend payout over the years?
With Kalkine, you will find answers to these questions, as we conduct a detailed analysis of companies based on quantitative and qualitative parameters.
Sound dividend stocks are investors' delight. They provide the benefits of capital appreciation and the joy of constant income despite the market volatility.