When talks of further interest rate cuts are in the air, high quality dividend paying stocks are the best option to keep earning passive income. Two best dividend stocks with high yield are
Metcash Limited (ASX: MTS)
Share price -$3.355
Annual dividend yield - 5.13%
Dividend Pay date - 29 Jan 2025
Dividend amount per share $0.085
Franking - 100%
Dividend ex date - 13 Dec 2024
Market cap $3.63B
As of 12 Dec 2024
Metcash Limited (ASX: MTS) reported robust FY25 half-year results, showcasing its diversified portfolio's resilience in a challenging environment. Group revenue grew by 6.3% to $9.6 billion, supported by strong performances in Food, Liquor, and acquisitions such as Superior Foods, which significantly boosted Food pillar earnings. Food revenue saw substantial growth, despite a continued decline in tobacco sales, with Superior Foods contributing new contracts and solid sales growth. Liquor maintained its momentum, with independents outperforming chains, driven by tailored, competitive offerings. However, Hardware faced headwinds from weaker Trade activity, impacting margins and earnings. Metcash continues to focus on cost control and growth plans in Hardware, positioning for market improvement. Group underlying EBIT remained stable at $246.1 million, while underlying profit after tax fell 5.5% to $134.6 million, influenced by increased finance costs and higher depreciation.
The company's financial position reflects strategic investments, notably the $400 million acquisition of Superior Foods, which raised net debt to $725 million. Operating cash flow reached $164 million, maintaining a three-year average cash realisation ratio of 86%. While the debt leverage ratio increased to 1.26x, it remains within the target range of 1.0x–1.75x. Metcash's interim dividend for FY25 stands at 8.5 cents per share, fully franked, with a record date of December 16, 2024, and payment scheduled for January 29, 2025. Shareholders can participate in the Dividend Reinvestment Plan (DRP), offering reinvestment flexibility without a discount. Key DRP dates include January 6–17, 2025, with shares issued on January 29.
Metcash expects sustained growth driven by its diversified portfolio. Early trading in the second half of FY25 showed an 8.0% increase in total group sales. Food sales, excluding tobacco, rose by 22.6%, while Liquor sales grew by 4.4%, supported by the IBA network's localised strategies. Although Hardware faces ongoing challenges from subdued Trade activity, cost initiatives and growth plans are anticipated to deliver benefits in the second half. Metcash remains confident in its ability to navigate current conditions, leveraging its scale and strategic initiatives for long-term growth and returns.
Elders Limited (ASX: ELD)
Share price -$7.535
Annual dividend yield - 4.74%
Dividend Pay date - 24 Jan 2025
Dividend amount per share $0.18
Franking - 70%
Dividend ex date - 17 Dec 2024
Market cap $1.33B
As of 12 Dec 2024
Elders Limited (ASX: ELD) has announced a capital raising initiative to partially fund its acquisition of Delta Agribusiness Pty Ltd and bolster its balance sheet for future growth. The company aims to raise approximately A$246 million through a fully underwritten Entitlement Offer, consisting of institutional and retail components. The institutional portion has already raised A$143 million, with the retail offer now underway. Additionally, the acquisition will be partly funded through a new A$110 million revolving loan facility and the issuance of A$190 million in Elders shares to Delta shareholders at A$8.52 per share (approximately 22 million shares). Delta, a leading agribusiness, generated A$835 million in revenue and A$53 million in EBITDA in the year to 30 June 2024. Post-acquisition, Elders’ pro forma net debt/EBITDA is expected to be approximately 2.0x by 31 March 2025, prior to realizing synergies.
Elders delivered a resilient FY24 result, with strong second-half performance partially mitigating the challenges faced in the first quarter due to low livestock prices and weaker crop protection margins. The company’s diversified product portfolio and geographical reach supported its ability to navigate these headwinds. Key business segments exhibited growth and recovery. Retail Products benefited from increased animal health sales, though fertiliser and crop protection sales were impacted by lower prices. Wholesale Products saw margin expansion, particularly in animal health, supported by recovering livestock prices. Agency Services experienced margin improvements, underpinned by significant increases in cattle and sheep prices, with volumes trending upward.
Real Estate Services delivered margin growth, driven by acquisitions, including Knight Frank Tasmania, and improved demand for broadacre properties. Financial Services posted strong earnings growth, benefiting from increased uptake of Elders’ livestock funding offerings and an expanded broker model. Feed and Processing Services also recovered, with rising feeder cattle prices and reduced feed costs boosting second-half results. Looking ahead, Elders expects stable livestock markets, favourable summer crop conditions, and incremental benefits from recent acquisitions. While dry conditions in parts of South Australia and Victoria may impact livestock volumes, real estate earnings are forecast to grow due to acquisitions and improving market conditions. Strategic investments under the company’s Eight Point Plan, alongside cost and capital efficiency measures, remain a priority. Elders’ diversified operations and disciplined cost management position the company to drive shareholder value across cycles, while recent growth initiatives provide a robust platform for sustained performance.
Source: Company’s Report
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