Known for their consistency, these stocks could prove to be excellent picks for stable dividends. Showing recovery, these could have potential for growth in the long term.
Deterra Royalties Limited (ASX: DRR)
Deterra Royalties Limited (ASX: DRR) continues to demonstrate the value of its royalty-based model, underscored by recent updates from Lithium Americas Corporation (LAC), the operator of the Thacker Pass Lithium Project in Nevada, USA. Deterra holds a 4.8% gross revenue royalty on Thacker Pass, which will reduce to 1.05% following the expected partial royalty buyback for US$13.2 million. Thacker Pass has now been confirmed as the world’s largest measured lithium reserve and resource, with Non-JORC Proven and Probable mineral reserves of 14.3 million tonnes of lithium carbonate equivalent (LCE) and Non-JORC Measured and Indicated resources of 44.5 million tonnes LCE. The project’s expansion plan targets 160,000 tonnes per year of battery-grade lithium carbonate production in four phases, doubling the previous Feasibility Study capacity. Life-of-mine estimates have increased to 85 years from 40 years, with optimized production costs of $6,238/tonne over the initial 25 years, positioning Thacker Pass as a cost leader.
Key milestones include an anticipated final investment decision for Phase 1 in early 2025, first concrete pouring in Q2 2025, and initial production in Q4 2027. The strategic importance of Thacker Pass is reinforced by a US$2.3 billion U.S. Department of Energy loan and US$625 million investment by General Motors. Deterra also provided a quarterly portfolio update for the period ending 30 September 2024. The acquisition of Trident Royalties plc added 22 royalty and offtake assets across lithium, gold, copper, silver, iron ore, and mineral sands, delivering enhanced diversification. Quarterly portfolio revenue was $53.1 million, with Mining Area C iron ore royalties contributing $50.7 million despite lower volumes and pricing.
The company continues to benefit from stable cash flows from its flagship Mining Area C royalty, now supported by the completed South Flank expansion. With a dividend yield of 7.2%, Deterra remains well-positioned to deliver shareholder value through its exposure to Tier-1 assets like Thacker Pass and its diversified portfolio. These developments underscore Deterra's ability to generate long-term, low-risk returns in a growing resource market.
NIB Holdings Ltd (ASX: NHF)
NIB Holdings Ltd (ASX: NHF) has provided FY25 guidance for underlying operating profit (UOP) of $235–$250 million, driven by robust growth in its Australian residents' health insurance (arhi) segment. arhi achieved 52% net policyholder growth YoY over the first four months of FY25, with an annualized growth rate of 3.2%, significantly outperforming industry averages. Net margins for FY25 are expected to remain within the 6.0%–7.0% target range. However, nib’s New Zealand health insurance business faces challenges due to post-pandemic claims inflation, mirroring sector-wide trends. The segment is expected to incur a ~$10 million operating loss in 1H25. Management anticipates recovery in 2H25 as higher pricing, cost efficiencies, and moderating claims inflation improve profitability, albeit below FY24 levels.
In FY24, nib delivered 5.9% UOP growth (pre-AASB17) to $257.5 million, alongside a 2.8% increase in net profit after tax (NPAT) to $181.6 million. Revenue rose to $3.3 billion, and the full-year dividend totalled 29.0 cents per share, reflecting a 75.7% payout ratio. nib continues to expand its “Payer to Partner” strategy, positioning itself as a broader health management company. Initiatives like Honeysuckle Health and Midnight Health are driving innovation in chronic disease management and obesity treatment, with early success in leveraging GLP-1 agonists. nib Thrive, which supports ~40,000 NDIS participants, aligns with government-backed navigator models for disability services. The company has been paying continuous dividends and has a dividend yield of 5.25%.
The travel insurance business, which returned to profitability in FY24, underperformed expectations due to softer market conditions and the loss of a key contract. Nonetheless, nib’s international inbound insurance business achieved record policyholder numbers, reflecting strong growth despite immigration policy pressures. CEO Mark Fitzgibbon’s upcoming retirement in late 2024 marks the conclusion of over two decades of transformative leadership, during which nib evolved into an ASX100 company. Incoming CEO Ed Close, with extensive operational expertise, is expected to sustain nib’s growth trajectory and focus on innovation. While near-term pressures in New Zealand pose challenges, nib’s strong fundamentals, diversified strategy, and ongoing expansion position it for sustained long-term growth.
Source: Company’s Report
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