- SPG decides to pay total combined cash dividend of 9.91 cents per share and it has a gross dividend yield of 6.848%
- CNU has declared interim dividend of 10 cents per share
- FRE reached agreement with its banking syndicate to increase funding facilities
Many new investors might not be familiar with the concept of dividends. When somebody buys a share of the company, he or she becomes eligible to get dividends. Generally, most of the investors decide to make equity investments primarily because of dividends. However, there are investors seeking capital appreciation as well. Some of the market players track growth in dividends in order to assess financial health of the company.
Dividends are not fixed income, but generally, investors rely on it as a source of income. However, investors need to note that fundamentally sound companies are generally the ones announcing dividends. Therefore, dividend-seeking investors need to conduct a thorough analysis in order to assess the financial footing.
Dividends are considered as the reward to the company’s investors, for keeping their trust on the company. If the company pays high dividend, it is believed to be doing well.
Recent Trends in Dividend Stocks
Due to the uncertainty caused by the outbreak of COVID-19, several companies all around the world have opted to stop their dividend payments. In a country like New Zealand, where dividend stocks have always been considered as an attractive investment, it has become more difficult for investors to select the right stocks for their portfolio.
Let us have a look at the companies paying decent dividends.
Stride Property Ltd & Stride Investment Management Ltd (NZX: SPG)
The company’s stock is currently trading at a P/E multiple of 27.270x. Notably, the gross dividend yield of the company stood at 6.848%.
Announcement of FY 2020 Results
Stride Property Group has released its FY20 results for the year ended 31 March 2020. Key highlights are:
- Net rental income stood at $59.1 million, up by $1.8 million from FY19;
- Profit before income tax stood at $28.7 million, down $52.7 million;
- The company reported Net Tangible Assets (NTA) per share of $1.91, down 1 cps from $1.92 as at 31 March 2019;
- SPL announced a cash dividend for the fourth quarter of FY20 of 2.1575 cents per share;
- SIML announced a cash dividend for the fourth quarter of FY20 of 0.32 cents per share.
The stock of SPG closed the day’s trading at NZ$1.890 per share on 10th July 2020. The company has a market capitalisation of around $690.515 million. The stock has given a total return of 13.17% in the time period of one month.
Chorus Limited (NZX: CNU)
The company’s stock is currently trading at a P/E multiple of 63.200x. Notably, the gross dividend yield stood at 4.244%.
The company has released connections update for Q4 FY 2020, wherein, it stated that period of lockdown had a significant impact on Q4 fibre activity and uptake. The restrictions which were imposed on non-essential activity reduced fibre installations by around 15k as well as halted UFB2 rollout. It was also stated that total fixed line connections fell by 4k to 1,415,000.
The stock of CNU closed the day’s trading at NZ$7.070 per share on 10th July 2020, down by 8.06% on an intraday basis. The company has a market capitalisation of around $3.14 billion. The stock has given a total return of 6.95% in the time period of three months.
The company’s stock is currently trading at a P/E multiple of 18.550x. Notably, the gross dividend yield stood at 6.000%.
FRE Reports Marginal Increase in Revenue
For the half-year ended 31st December 2019, the company reported total revenue of $318.91 million, an increase of 1% on the previous corresponding period (pcp). Net profit from continuing operations for the period was reported at $29.19 million, a decrease of 13% on pcp.
The company has decided to pay an interim dividend of 15 cps, fully imputed at a tax rate of 28 per cent, in line with the interim dividend of previous corresponding period. This shows a payout of about $23.3 million, which is also in line with pcp.
Trading Performance during Lockdown
The company’s revenue dropped on average by approximately 32% during the month of April but showed a steady improvement through that period of time, both in volume as well as in the type of activity being performed.
In the release dated May 14, 2020, it was mentioned that the company has reached agreement with its banking syndicate to increase funding facilities available by NZD50 Mn to provide further liquidity should it be required, and to extend certain existing facilities that mature in 2021 by an additional time span of 2 years. The company stated that there has been a strong focus towards reviewing various scenarios for the purpose of examining funding, liquidity as well as business requirements and ensure that it is well positioned to cope with economic situation as it develops.
The stock of FRE closed the day’s trading at NZ$7.060 per share on 10th July 2020. The company has a market capitalisation of $1.167 billion. The stock has given a total return of 23.85% in the time period of three months.