Although there are multiple ways to build wealth and earn passive income, investing in dividend stocks requires least subsequent effort once you have made the initial investment. The Best Dividend Stocks not only increase their dividend payouts but build wealth through capital appreciation too.
Yancoal Australia Limited (ASX: YAL)
Yancoal Australia Limited has achieved substantial growth in revenue generation over the past few years, increasing from $4.65 billion in 2019 to $7.77 billion in 2023. During the same period, earnings have grown from $719 million to $1.81 billion, reflecting improved earning capabilities. Additionally, the company has significantly reduced its debt levels, decreasing from $3.49 billion in 2019 to $146 million in 2023. This deleveraging effort has strengthened the company's balance sheet. Moreover, the company's liquidity remains stable, as demonstrated by its healthy current ratio.
Yancoal reported a 12% decrease in saleable production volumes of 11.3Mt during the March 2024 quarter compared to the final quarter of 2023. This decline was already anticipated due to favorable operating conditions in 4Q 2023 and natural variations in mine plans from quarter to quarter. However, there was a 47% increase in saleable production from 1Q 2023, reflecting a strong recovery over the past 12 months.
The realized thermal coal price aligned with coal index trends, while the realized metallurgical coal price outperformed relevant indices due to higher priced carryover supplied within the period.
Additionally, the company reported a $260 million increase in cash holding compared to the end of FY23.
In FY23, despite the challenging coal price environment, Yancoal demonstrated resilience with an Operating EBITDA of $3.5 billion and an EBITDA margin of 45%, underscoring the quality of its assets.
Throughout the year, Yancoal achieved significant milestones in coal production, with ROM (Run of Mine) coal production totaling 60.2 million tonnes (100% basis). The second half of the year saw a notable 44% increase in production, reflecting the effective implementation of mine recovery plans.
Yancoal maintains a significant focus on both organic and inorganic growth initiatives as part of its strategy to expand and complement its robust portfolio of producing coal assets and projects. Organically, in 2024, the company will prioritize advancing exploration and expansion efforts across its tier one assets such as Moolarben, MTW, and HVO. Additionally, Yancoal is progressing plans for a renewable energy hub that includes a Pumped-Hydro Energy Storage project and a solar farm. This initiative aims to diversify the company’s operational base in alignment with the global energy transition while offering economic opportunities for reusing depleted mining assets and land. From an inorganic growth standpoint, Yancoal continues to explore acquisition opportunities to further expand its portfolio and drive operational growth.
Yancoal Australia Ltd has maintained a consistent track record of paying dividends. As of the end of FY23, the company held a cash balance of $1.4 billion. The Board has now declared a fully franked final dividend totaling $429 million, which equates to A$0.325 per share. As of the end of March, Yancoal had $1.66 billion in cash reserves, with a significant portion allocated towards this dividend payment.
Kina Securities Limited (ASX: KSL)
Kina Securities Limited has demonstrated strong financial health, consistently maintaining a capital adequacy ratio exceeding 20%, surpassing industry averages. Additionally, its revenue growth has been impressive, with a compound annual growth rate (CAGR) of approximately 18.36% between 2018 and 2022.
Furthermore, the year-on-year drop in the debt percentage of total equity from 16.8% in 2018 to 6.9% by FY22 indicates prudent Financial Management and a strengthening balance sheet.
In 2023, Kina exhibited a robust performance across its key financial indicators. The net profit before tax (NPBT) surged by nearly 20% to PGK 175.3 million, buoyed by a substantial expansion in the loan book, augmented fees and commissions, and an impressive 200 basis points decrease in the cost-to-income ratio, settling at 54.2%. Notably, net fees and commissions experienced a notable 18% increase to PGK 137.0 million, attributable to the ongoing development and expansion of Kina’s channel network. The digital channels particularly flourished, with a remarkable 44% upsurge in digital channel fees and a 30% year-on-year transaction volume growth due to strategic enhancements in EFTPOS and terminal deployment.
KSL reported a customer fraud incident on 18 June 2024. Although the stock is on a recovery path, it revised forecast NPAT for the half year ending 30 June 2024, to be between PGK34.6m and PGK42.9m.
Kina Securities Limited has consistently demonstrated its commitment to providing value to shareholders through regular dividend payouts.
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.
KSL 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 highlight KSL's Financial Stability but also make it more attractive to investors who are looking for both capital growth and a reliable income stream.
Source - Company Reports
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