10 NZX dividend stocks to watch out for in February 2021

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10 NZX dividend stocks to watch out for in February 2021

 10 NZX dividend stocks to watch out for in February 2021

Summary

  • Dividend stocks distribute a portion of company’s earnings to investors on a regular basis.
  • Good dividends by some companies have provided some relief to investors amid a challenging environment.
  • Many NZX-listed stocks are trading at high dividend yield.

 

Investing in a healthy firm with a long dividend record has been a preferred choice for the dividend lovers. Dividend stocks deliver a part of a company’s earnings to investors on a regular basis and provide an additional cover of protection, which is above the capital appreciation.

Amid an uncertain environment induced by COVID-19, investors are running towards dividend-paying companies with reduced expectations of returns.

In this view, let us examine 10 NZX-listed dividend stocks under spotlight.

Spark New Zealand Limited

 

Spark New Zealand Limited (NZX:SPK, ASX:SPK) delivered strong performance in FY20 with revenues up by 2.5% and EBITDA up by 2.1% on previous year.

The Group announced a dividend of 12.5 cents per share in H2 of FY20, taking the total dividend to 25 cents per share in FY20.

Spark is operating under high uncertainty but has built a robust platform for the year ahead. For FY ending 30 June 2021, SPK reaffirmed EBITDA guidance to be between $1,090 million and $1,130 million while dividend guidance of between 23 cents and 25 cents per share.

On 11 February, SPK ended the trading session at $4.68, up 0.21% from its previous close.

The Bankers Investment Trust Plc

 

The Bankers Investment Trust Plc (NZX:BIT) attained a positive result for the year ended 31 October 2020. After crashing earlier in the year, the Group’s share price and NAV recovered by late summers.

As at close of business on 8 February 2021, the unaudited net asset value per share calculated in accordance with the AIC formula was 1109.6p.

The Group increased dividend to 21.54p per year in 2020, up 3.1%, compared to 6% in 2019. BIT is optimistic about the returns for global equities in 2021.

     Source: BIT’s Monthly Factsheet at 31 December 2020, dated: 19 January 2021

On 11 February, BIT ended the trading session at $21.42, down 0.37% from its previous close.

 

Oceania Healthcare Limited

 

Oceania Healthcare Limited (NZX:OCA, ASX:OCA) posted strong sales volumes in H1 of FY21 and saw strong demand for its premium care suites across NZ. It reported an EBITDA of $35.4 million for 6 months ended 30 November 2020, up 2% on pcp.

The Group announced an interim dividend of 1.3 cents per share to be paid on 24 February 2021. The Dividend Reinvestment Plan (DRP) will apply to the dividend at a discount of 2.5%.

OCA is on track to complete 217 aged care beds and retirement village units by the end of FY21.

On 11 February, OCA ended the trading session at $1.57, down 0.63% from its previous close.

ALSO READ: Dividend stocks to watch out for on NZX main board

 

Heartland Group Holdings Limited

 

Heartland Group Holdings Limited (NZX:HGH, ASX:HGH) entered COVID-19 in a robust financial position and achieved a NPAT of $72 million for FY ended 30 June 2020.

Heartland paid a fully imputed final dividend of 2.5 cents per share on 9 October 2020. The Group paid a total dividend of 7 cents per share in FY20 together with an interim dividend of 4.5 cents per share.

     Source: HGH’s Annual Report 2020, dated: 30 October 2020

 

The Group remains capable of declaring an interim dividend at half year in line with previous ‘usual’ dividends if performance stayed supportive.

On 11 February, HGH ended the trading session at $1.92, up 2.13% from its previous close.

 

Henderson Far East Income Limited

 

Henderson Far East Income Limited (NZX:HFL) seeks to provide investors with a rising total annual dividend per share, as well as capital appreciation from a diversified portfolio of investments from the Asia Pacific region.

On 28 January 2021, HFL declared the first interim dividend of 5.8 pence per ordinary share for the year ending 31 August 2021. The dividend will be paid on 26 February 2021 while shares were quoted ex-dividend on 28 January 2021.

On 9 February 2021, HFL revealed that the unaudited net asset value per share computed in accordance with the AIC formula was 321.4 pence as at close of business on 8 February 2021.

On 11 February, HFL ended the trading session at $6.42, down 1.23% from its previous close.

 

The City of London Investment Trust Plc

 

The City of London Investment Trust Plc (NZX:TCL) provides long-term growth in income and capital, primarily by investment in UK equities.

As at close of business on 9 February 2021, the unaudited net asset value per share stood at 351.7 pence. Since the end of FY20, the Board has announced a first interim dividend of 4.75p per ordinary share, in respect of the year ending 30 June 2021.

      Source: TCL’s Monthly Factsheet at 31 December 2020, dated: 19 January 2021

The investment process for CTL aims to prevent companies that cannot sustain dividend payments, and the diversification of the portfolio limits the impact of any dividend cuts. TCL has a strong dividend growth track record and solid reserves position amid an uncertain outlook.

On 11 February, TCL ended the trading session at $6.8, down 1.45% from its previous close.

 

Australian Foundation Investment Company Limited

 

Australian Foundation Investment Company Limited (NZX:AFI, ASX:AFI) witnessed tough operating conditions arising from COVID-19 with its profit after tax falling to $84.1 million in H1 ended 31 December 2020, down 42.4% on pcp.

AFI paid a final dividend of 14 cents per share for FY20. The interim dividend for H1FY21 was 10 cents per share and is due to be paid on 23 February 2021. Shares are also expected to begin trading on an ex-dividend basis on 8 February 2021.

DO READ: NZX 50 listed 4 dividend stocks to be considered in 2021

AFI portfolio is well positioned in high-quality companies, which are well placed to deliver earnings growth over long term.

On 11 February, AFI ended the trading session at $7.99, up 0.5% from its previous close.

 

Argosy Property Limited

 

Argosy Property Limited (NZX:ARG) made a strong start to FY21 despite a challenging environment. ARG’s business is resilient at present and is supported by a diversified portfolio of quality assets in prime locations. It has a sound capital and portfolio position as it steps into H2 of FY21.

The Group paid a dividend of 1.6375 cents per share for Q2 of FY21 (3 months to 30 September 2020) on 23 December 2020. The strike price, calculated at 3% discount, for DRP was at $1.4921 per share.

The Board announced an expected dividend of 6.45 cents per share for FY21, up from 6.35 cents per share, reflecting continued sound delivery of strategy.

Source: ARG’s FY21 Interim Result Presentation, dated: 26 November 2020

On 11 February, ARG ended the trading session at $1.55, down 0.96% from its previous close.

 

Scales Corporation Limited

 

Scales Corporation Limited (NZX:SCL) witnessed a challenging 2020, but it projects a solid financial result as it benefitted this year from its diversification and leadership.

SCL declared a fully imputed interim cash dividend of 9.5 cents per share for FY20, to be paid on 15 January 2021. It reiterated to pay an annual cash dividend of not less than 19 cents per share while holding net cash at a level no more than actual Net Profit for each year.

The Group reaffirmed guidance for 2020 at the lower end of earlier announced underlying Net Profit range of $30 million to $36 million, though earnings mix across division will differ from prior years.

On 11 February, SCL ended the trading session at $4.92, up 1.23% from its previous close.

 

Trustpower Limited

 

Trustpower Limited (NZX: TPW) witnessed higher levels of customer contacts but lower C&I electricity volumes for Q3 of FY21. Customer preferences for fast fibre products continued in Q3, whereas South Island generation production was 13% lower than the pcp hindered by low inflows.

The Group paid an interim dividend of 17 cents per share on 4 December 2020.

Trustpower expects its FY21 EBITDAF to be in the range of $185 million to $205 million. The company possesses growth capacity and potential to participate strongly in a dynamic and fast developing retail environment.

On 11 February, TPW ended the trading session at $8.92, down 0.78% from its previous close.

 

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

 

 

 

 

 

 

 

 

 

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