- Dividend payout should reflect the company’s health.
- Banker Trust Investment showed weak financials, while dividend payout was good.
- Australian Foundation Investment despite the drop in profits over 2019 kept the dividend the same.
- Oceania Healthcare reflected a better-than-expected performance and a good dividend payout.
Dividend payouts are a reflection of a company’s financial health. Generally, investors also track the dividend history of the company to make their investment decisions. They are not fixed income, but investors rely on them for a secure income. As a principle, financially-sound companies pay a higher dividend. So, if a company is doing well, it is believed to be doing well on its profitability front also.
Bankers Investment Trust Plc
Bankers Investment Trust Plc (NZX:BIT) is a financial company, which invests on behalf of its investors to give them good returns by growing their income and capital. Its portfolio includes equities from across the world.
The investment Company, which targets high-capital growth and income growth for its investors, announced its final quarterly dividend payout of 5.42 c (in GBP) and gross dividend yield of 2.03%. The Company had announced that the dividend will be paid on February 26 to its investors.
Overall financials for the Company showed a weakness during the coronavirus pandemic as most of the Companies were also hit by the effects of the disease. Its NAV total return growth was at 5.3% in 2020, over 12.1% in 2019. Share price total return rise was 8.1% as compared to 2019, when it was 13.6%.
Earning per share also fell and dividend distribution was also 3.1% as compared to 6% in 2019.
BIT closed at NZ$20.85 on 5 February 2021.
The City of London Investment Plc
The City of London Investment Plc (NZX:TCL) is a UK-based investment company, which operates in New Zealand as well. Its goal is to provide the investors with growth in income and capital in the long term via investing in equities on London Stock Exchange (LSE). It invests across sectors with 60% of its portfolio in FTSE-listed companies.
The Board of TCL announced its interim dividend of 4.75c (in GBP) per share of 25c each. This is for the year ending 30 June 2021. The dividend will be paid on February 26, 2021, and gross dividend yield was 5.41%.
The Company has also announced dividends on preference, and preferred ordinary stocks for half year to be paid on February 28, 2021.
TCL closed at NZ$6.84 on 5 February 2021.
Australian Foundation Investment Company Limited
Australian Foundation Investment Company Limited (NZX:AFI) is an investment company, which invests in Australian and New Zealand equities. Its main objectives are to pay dividends that grow over a period of time and attractive long- and medium-term returns.
The Company is expected to pay fully franked 10 c (in AUD) dividend to its ordinary shareholders on 23 February 2021 despite the impact of COVID-19 pandemic on its profitability.
The Company profits showed a significant 42% dip at NZ$84M in the half year ending December 31, 2020, over the same period in 2019. However, the dividend was the same as last year. The final for FY2020 was 14c per share (fully franked) paid to the shareholders on September 1, 2020.
AFI has recently announced a Dividend Reinvestment Plan (DRP). The price of the shares under the DRP will be set at 5% discount.
It has some of the big New Zealand companies in its portfolio. Total portfolio of Australian companies increased marginally over 2019 and so did return on the portfolio.
Going forward, its portfolio is well positioned, given the companies that are in its portfolio and the adjustments it made during the uncertain period.
AFI closed at NZ$8.10 on 5 February 2021.
Oceania Healthcare Limited
Auckland-based Oceania Healthcare Limited (NZX:OCA) is a healthcare services company, which operates in 40 locations across New Zealand in the retirement villages and aged care space.
In its interim results for six months ended 30 November 2020, it reported a 2% rise in EBIDTA at NZ$35.4M.
Oceania witnessed solid sales volume and a robust demand for its premium care suites throughout NZ in the first half of the financial year.
Operating cash flows were very robust over the period and increased from NZ$57.0M to NZ$74.6M, signifying a 40% jump. Assets growth was from $177.1M to $1.7B due to heavy capital expenditures in new developments.
The Company declared an Interim dividend of 1.3 cents (in NZD) per share to be paid on February 24. The gross yield is a strong 3.3%, but it has a short dividend payment history. It has been paying dividends only since last three years.
Overall, the Company is growing, and was very insular from COVID-19 related uncertainties.
OCA closed at NZ$1.60 on 5 February 2021.