From ASX listed companies, some stocks with an upcoming record date are especially suited for passive income seekers. Rural Funds Group is one such for being among high dividend stocks.
Rural Funds Group (ASX: RFF)
Share price -$1.76
Annual dividend yield - 6.66%
Dividend Pay date - 30 April 2025
Dividend amount per share $0.029
Franking - 0%
Dividend ex date - 28 March 2025
Market cap $685.91 M
As of 24 March 2025
Rural Funds Group (RFF), in its half year report for the period ending December 31, 2024, highlights strong financial and operational performance. The company, managed by Rural Funds Management Limited (RFM), is among high quality dividend stocks. It saw its net property income jump by 17.3%, amounting to $45.5 million. This increase was mainly driven by additional rental income from macadamia developments, which form a key part of RFF’s agricultural asset portfolio. Adjusted funds from operations (AFFO) were reported at 5.73 cents per unit, aligning with the company’s full-year forecasts. Distributions per unit (DPU) stood at 5.87 cents, maintaining consistency with prior expectations.
The company witnessed a slight decline in its adjusted net asset value (NAV), which decreased by 1.2% to $3.10 per unit. This reduction was primarily attributed to revaluations of interest rate swaps. However, despite this, RFF remains financially robust, as reflected in its expanded syndicated debt facility, which provides the necessary funding to complete its 3,000-hectare macadamia development project leased to TRG JV.
RFF has reaffirmed its financial guidance for the full fiscal year 2025, projecting an AFFO of 11.4 cents per unit and maintaining distributions at 11.73 cents per unit. The company has also provided an early forecast for fiscal year 2026, projecting continued distributions at the same rate.
During the reporting period, RFF successfully executed leasing agreements for eight properties with a combined asset value of $119 million and an average lease term of 9.7 years. This included cropping properties leased to TRG JV, lease extensions for five vineyards under Treasury Wine Estates, and a cattle property leased to a private farming enterprise. Additionally, some of the group’s unleased assets are currently being developed and are already generating an operational return.
To support its ongoing developments, RFF has secured a bank debt facility with $155.9 million in available headroom, compared to its committed capital expenditures of $104.6 million over the next 18 months. The company also plans to reduce its gearing through further asset sales, aiming to achieve a target range of 30-35%.
From a strategic perspective, RFF’s portfolio provides exposure to a defensive property sector centered around food production, offering a hedge against inflation. The company’s leasing structure features a long weighted average lease expiry (WALE) of 13.0 years, with most leases following a triple-net model. Its portfolio is diversified across 64 properties spanning five agricultural sectors and various climatic zones. Notably, 79% of the company’s projected FY25 income is derived from corporate and institutional lessees, ensuring a stable revenue stream. The company’s rental growth strategy combines lease indexation and periodic market rent reviews to sustain long-term profitability.
RFF will continue to focus on improving productivity and maximizing the potential of its agricultural assets through ongoing development and leasing initiatives. The company remains committed to delivering consistent distribution growth, supported by high-quality lessees and strategic capital investments.
(Source: Company's Report)
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