To create wealth, investors scout for not only the growth stocks but also the Best Dividend Paying Stocks since these reflect upon the strength of the company. Value investing calls for high quality dividend stocks with long term growth plans. Two such best long term dividend stocks are
Nickel Industries Limited (ASX: NIC)
Nickel Industries Limited is among dividend paying companies having declared an interim dividend of A$0.025 per share, which is a 25% increase from the previous year.
From December 31, 2020, to December 31, 2023, the dividend payout ratio increased from 49.0% to 94.4%, showing a significant rise in the proportion of earnings returned to shareholders.
Nickel Industries is advancing its strategic growth by investing in Excelsior Nickel Cobalt (ENC), a cutting-edge HPAL project. This initiative is set to produce around 72,000 tonnes of nickel metal annually, significantly diversifying the company’s production portfolio. The ENC project, which is progressing well, will produce mixed hydroxide precipitate (MHP), nickel sulphate, and nickel cathode, aligning with the company’s goal to enhance its product range and reduce its carbon emissions.
Nickel Industries is ready for growth, particularly with its focus on the electric vehicle battery market and sustainable nickel production. Nickel Industries Limited (NIC) is acquiring the Sampala Project, a highly prospective nickel-cobalt asset spanning 6,654 hectares, located 36.9 km from its existing operations at the Indonesia Morowali Industrial Park (IMIP). The project contains a JORC 2012 compliant resource of 2.3 million tonnes of nickel metal within just 900 hectares, with only 20% of the mapped laterite drilled so far. This acquisition, set to be completed under favorable terms in 2026, will secure long-term nickel ore resources for the company, supporting its IMIP operations for the next 40-50 years and enhancing its self-sufficiency. The acquisition of the Sampala Project, with its substantial nickel resource and strategic location, will bolster the company's long-term ore supply and operational self-sufficiency.
Nickel Industries stands to gain from the rising demand for sustainable nickel in the electric vehicle sector. As the global shift towards electric vehicles accelerates, the demand for nickel, especially high-purity nickel used in lithium-ion batteries, is expected to surge. Its low-cost production facilities and key partnerships in Indonesia provide a competitive advantage. Despite recent production challenges, its proactive investments, particularly in the ENC HPAL project and Sampala Project acquisition, position it for future growth and stability.
SRG Global Limited (ASX: SRG)
From FY23 to FY24, SRG Global Limited experienced significant financial growth. Revenue increased from $809.0 million to $1,069.3 million, marking a 32% rise. EBITDA rose by 23%, from $80.1 million to $98.5 million. EBIT(A) saw a 31% increase, climbing from $50.0 million to $65.6 million, while NPAT(A) grew by 26%, from $31.8 million to $40.3 million. Despite these gains, the EBITDA margin slightly decreased from 9.9% to 9.2%, EBIT(A) margin declined marginally from 6.2% to 6.1%, and NPAT(A) margin dropped from 3.9% to 3.8%.
SRG is one of the quality dividend stocks, having increased its dividends per share by 13%, from 4.0 cents to 4.5 cents, and Earnings Per Share (A) grew by 15%, from 6.7 cents to 7.7 cents.
The company boasts a strong long-term track record of delivery, demonstrated by a 133% growth in EPS(A) over the past three years. It has successfully transitioned to approximately 80% annuity or recurring earnings, highlighting its stability and predictability.
With a solid financial foundation and a focus on recurring revenue, SRG Global is well placed for continued success in the coming years. The company is firmly positioned to sustain organic growth, with over $1.0 billion in work on hand and supported by a robust pipeline exceeding $2.0 billion. SRG has entered into a binding agreement to acquire 100% of Diona Pty Ltd and its associated entities (collectively "Diona") for $111 million, on a cash-free, debt-free basis with normal working capital levels. The acquisition implies a multiple of 6.0x on Diona's FY24 EBIT of $18.5 million. Diona delivers specialized services within two pivotal end markets: Water Security & Rehabilitation, which includes Water & Wastewater, and Energy Transition, covering Gas and Power & Energy.
SRG Global’s acquisition of Diona enhances its growth outlook, as Diona is likely to benefit from significant investments in water security and energy transition. The water sector is investing around $12 billion annually, with major projects like the National Water Grid Fund and Sydney Water’s $34 billion initiative. In gas and electricity, approximately $23 billion is spent yearly, driven by the expansion of high-pressure pipelines and high-voltage transmission networks. The Australian Energy Market Operator’s $16 billion plan for new transmission lines by 2050 further underscores its growth potential. Diona’s strong utility partnerships and 25 years of expertise position it to capitalize on these trends effectively.
Source: Company’s Report
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.