NZX 50 listed 4 dividend stocks to be considered in 2021

Summary

  • Seeka has issued a special 12 cps dividend on the back of an excellent recent financial performance.
  • F&C Investment Trust has dipped into its savings to issue 6 cps dividend for its underperforming portfolio.
  • Turners Automotive Group issued a guidance of 17 cps for FY21, indicating that a lift in performance is expected going forward.
  • Private Land and Property Fund returned 4.5% in 2020 via dividends, outperforming competing term deposit rates.

Nine dividend payments are expected from NZX listed companies in February and the remainder of this month. The four closet approaching distributions are examined below in an attempt to contextualise the dividend payments and highlight what can be expected from the companies moving forward.

Seeka Limited

Seeka Limited (NZX:SEK) would pay a special dividend of $0.12 per share to holders of ordinary shares on 27 January 2021.

The special dividend was announced in December last year after guidance targets were exceeded. Seeka sold part of its Australian Kiwifruit orchard, while the integrated services it provides to orchards were provided more cost effectively. As a result, earnings were stronger than expected while debt was significantly reduced.

The special dividend is supplementary to a $0.10 per share dividend paid in September 2020.

On 27 January 2021, at the time of writing, Seeka was trading at $4.75, down by 1.04%.

F&C Investment Trust PLC

F&C Investment Trust PLC (NZX:FCT) third interim dividend for 2020 will be paid out on the 2 February 2021. The dividend is worth 2.9 pence per share, or approximately NZD 0.06 per share. The dividend equates to a yield of 1.53% .

2020 marks the 50th year of continuous increases in dividend payment from the company. This is an important milestone for F&C although not entirely reflective of a year-on-year improvement in the management of their investment portfolio. Rather, F&C hold cash reverses in the event that dividend payment cannot be supported by the income generated in a given year. F&C were obliged to dip into their reverses for dividend payments in 2020.

On 27 January 2021, at the time of writing, F&C Investment was trading at $15.00, down by 3.29%.

Turners Automotive Group Limited

Turners Automotive Group Limited (NZX:TRA) announced a 4.000 cps dividend, last November, which is to be paid tomorrow (28 January 2021), taking HY21 dividends to 8.000 cps.

Guidance for FY21 dividends is 17.000 cps as the Company is confident in its position to deliver strong yields to its shareholders going forward. Supply constraints on new vehicles has boosted their auto retail segment while their finance division is attracting higher quality borrowers.

The stress test of Covid disruptions at the beginning of 2020 provided the impetus for Turners to reduce their costs and improve the efficiency of their operations. The long term implications of this is expected to be reflected in the dividend payments going forward.

Turners dividend policy goal is to pay-out 60 to 70 percent of net profit after tax.

On 27 January 2021, at the time of writing, Turners Automotive Group was trading at NZ$3.28, down by 0.61%.

Private Land and Property Fund

Private Land and Property Fund (NZX:PLP) income is derived from leases distributed to shareholders.

PLP is currently generating annual returns of approximately 4.5%. The fund is generally considered low risk and is designed to be complementary to other low risk but lower yielding assets such as term deposits.

PLP announced a dividend of 0.530 cps for the 3 months ending on 31 December at the beginning of the month. The dividend is expected to be paid today (27 January), with total amount associated with the distribution equalling $285,427.

On 27 January 2021, at the time of writing, Private Land Property was trading at NZ$1.052, down by 0.47%.

 

 


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