High yield stocks are just like double-edged swords and need close scrutiny. A high yield could also indicate a falling share price.
Warren Buffett’s Berkshire Hathaway portfolio is said to have stocks with long history of paying dividends rather than stocks paying very high dividend yields.
A careful screening can bring out sustainable and consistent Dividend Paying Stocks. Some of the Possibly best dividend stocks on ASX having good growth prospects are
Abacus Group (ASX: ABG).
Following the de-stapling implementation on 3 August 2023, Abacus Property Group (ASX: ABP) had successfully separated its Self-Storage business to create two separately listed stapled groups: Abacus Storage King (ASX: ASK) and Abacus Group (ASX: ABG).
Abacus Group’s strategic focus on diversifying income streams and directing capital towards high-yielding assets has yielded positive outcomes in the first half of FY24
ABG has demonstrated year-on-year increases in Funds from Operations (FFO), indicating improving operational performance and financial stability. Additionally, the reduction in the percentage of debt to equity suggests a strengthening balance sheet and reduced financial risk. Furthermore, the increment in the interest coverage ratio reflects ABG’s enhanced ability to meet its interest obligations from its operating income, signaling improved financial health and risk management. These positive trends contribute to ABG’s overall financial strength and resilience.
The Commercial portfolio, consisting of 21 assets, played a pivotal role in supporting the group’s financials. FFO from this segment saw a commendable 4% growth to $38.9 million. This growth was underpinned by strong occupancy and income levels, with a Commercial Weighted Average Lease Expiry (WALE) of 4.3 years, reflecting stability in lease terms.
Kina Securities Limited (ASX: KSL)
Kina Securities Limited with its strong foothold in Papua New Guinea (PNG), is now setting its sights on a significant geographical expansion into the Pan Pacific market, presenting lucrative opportunities for growth. While pursuing this expansion to enhance its financial output, the company maintains a significant focus on improving its operating fundamentals and customer experience. In line with this goal,
KSL, among the Top Dividend Stocks anticipates a dividend cash flow of 0.7 cents per share (cps) in September 2024, followed by 1.05 cps in March 2025, and 1.26 cps in March 2026. These consistent dividend projections not only underscore KSL’s financial stability but also increase its attractiveness to investors looking for both capital growth and a dependable income stream. Such dividends demonstrate the company’s confidence in its financial performance and capacity to deliver sustainable returns, positioning KSL as a compelling investment opportunity in the market.
In FY23, KSL announced a final dividend of AUD 6.0 cents per share or PGK 15.9 toea. This final dividend resulted in a total dividend for the full fiscal year of AUD 10.0 cents per share or PGK 25.6 toea.
Kina’s impressive historic financial performance, marked by substantial revenue and earnings growth rates, coupled with resilient and stable operations, presents a highly attractive investment opportunity. This sentiment is further reinforced by the active income-generating opportunity offered through an attractive dividend yield of 9.09%.
IGO Limited (ASX: IGO)
IGO Limited has a strong presence in important mining regions, especially WA, from which it can strategically tap into the growing demand for vital minerals. This puts it in a strong position within the clean energy sector.
A strong cash position, lower debt, and positive net cash inflows from operations are just a few of the company’s healthy financial metrics that offer a strong platform for upcoming investments and growth. IGO’s commitment to growth and innovation is demonstrated by the ongoing expansion efforts at Greenbushes, the increase in lithium hydroxide production at Kwinana, and the value shown at the Cosmos Project.
Whitehaven Coal Limited (ASX: WHC)
Whitehaven Coal Limited released its quarterly results for the period ended 31 March 2024. The acquisition of BMA’s Daunia and Blackwater coal mines, completed on April 2, has transformed Whitehaven into a leading metallurgical coal producer. During the quarter, Whitehaven achieved an average coal price of $219 per tonne.
The company is committed to expanding its operations through key projects currently under the capital allocation framework. One noteworthy project is the Vickery early mining project, which has made significant progress. The first ROM production is expected in the June 2024 quarter, representing a significant short-term advancement for Whitehaven. Additionally, the Narrabri underground mine stage 3 expansion is set to greatly enhance the company’s production profile. This expansion plan aims to extend the mine life from 2031 to 2044 and is currently undergoing regulatory processes.
The company’s strong growth trajectory and financial profile are evident from the significant revenue growth achieved over the years, with notable increases from $1.72 billion in 2020 to $6 billion in 2023. Additionally, the company’s earnings have experienced exceptional growth, rising from $30 million to $2.66 billion. This impressive growth is expected to continue in both the short and long term, thanks to key expansion plans in Whitehaven’s pipeline that will lead to enhanced production rates.
McMillan Shakespeare Limited (ASX: MMS)
McMillan Shakespeare Limited (ASX: MMS) announced its half-year results for the period ending 31 December 2023 on 20 February 2024.
During this reporting period, the company achieved a normalized revenue from continuing operations of $261.1 million, reflecting an 8.1% increase over the previous corresponding period (pcp).
Normalized earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 42.9% on pcp to $86.9 million. Additionally, normalized underlying net profit after tax and acquisition amortization (UNPATA) surged by 48.2% on pcp to $53.2 million. The return on capital employed (ROCE) increased by 7.5 percentage points, reaching 46.2%.
MMS has a track record of being a consistent dividend payer, evidenced by its recent interim fully franked dividend of 76.0 cps, compared to 58.0 cps in the same period last fiscal year. This dividend represents a 100% payout ratio of Normalised UNPATA. Projections for MMS’s dividend cashflows indicate a notable increase over the forecast period. Beginning at 0.34 cps in September 2024, the dividends are expected to experience significant growth, reaching 0.69 cps by March 2028. This upward trajectory reflects a positive outlook for the company’s financial performance and highlights its commitment to delivering returns to shareholders.