In the uncertain times of financial investments, investors seeking a degree of safety often neglect the role of payouts. Going for High Yield Dividend Stocks could be a good strategy but payout reveals the intention and the financial sustainability of the company.
Two Dividend Paying Companies paying consistently with high payout ratios are
Woodside Energy Group Limited (ASX: WDS)
Woodside Energy Group on half-yearly basis reported production growth year on year with increment in production cost. However, production cost between H1 2023 reduced from $8.8 boe from H1 2023 to $8.3 boe. Group reported EBITDA of $4.4 billion, driven by strong operational performance and gain on sell-down of interest in Scarborough Joint Venture.
On an average company has managed to maintain cash margin of 80% between H1 2020 to H1 2024. Liquidity of $8.5 billion and gearing of 13%, at the lower end of the target range supports capital investment and returns. $2.4 billion operating cash flow, continued strong performance .136% growth in FCF to $740 million benefitting from sell-down of interest in Scarborough Joint Venture. Group ROE increased by 1.3% on pcp to 11% and EPS was up by 11% on pcp to US 102 cps.
WDS is one of the Top Dividend Paying Stocks. In 1H 2024, it reported fully franked Interim dividend of $1.3 billion, representing a half-year annualized dividend yield of 7.3% Maintaining 80% payout ratio, top of the target payout range.
Woodside has recently commenced oil production from its highly anticipated Sangomar Oil Project in June 2024, marking a notable advancement in its strategy for production expansion across its operational portfolio, where this new initiative is expected to play a crucial role. The company is actively evaluating additional organic resource growth opportunities and is continuously reviewing its portfolio with the aim of achieving further increases in oil production in the future. Concurrently, the Scarborough and Pluto Train 2 project are also 62% complete, with plans to deliver the first LNG cargo by 2026. Additionally, the Trion project is making significant strides, with the first oil production anticipated in 2028. Woodside's overall exploration efforts also remain vigorous, focusing on the discovery of new projects within its pipeline to support long-term growth.
Woodside's solid operational foundation, coupled with its historical financial growth, has resulted in a threefold increase in revenue and nearly a fivefold rise in earnings over the past five years. This strong performance has strategically positioned the company to provide substantial financial returns to its shareholders.
Vicinity Centres (ASX: VCX)
Vicinity Centres (ASX: VCX) declared its fiscal year 2024 results for the period that concluded on 30 June 2024.
The company reported total revenues of $1.32 billion for FY24, an increase from $1.28 billion in the previous year. The Statutory net profit after tax (NPAT) was recorded at $547.1 million, a significant rise from $271.5 million in FY23. The Funds From Operations (FFO) and Adjusted FFO (AFFO) per security exceeded the anticipated range, because of strong leasing results and overall portfolio performance.
The final distribution per security was set at 5.90 cents, culminating in a total distribution of 11.75 cents for FY24, compared to 12.0 cents in FY23, which reflects a payout ratio of 95.2% of AFFO.
The company’s strong leasing results also bolstered both current and future income growth, with occupancy rates at 99.3%, a positive leasing spread of 1.1%, and an average annual escalator of 4.8% on new leases.
The total portfolio comparable Net Property Income (NPI) growth was reported at 4.1%. Additionally, Vicinity Centres acquired a 50% stake in the premium asset Lakeside Joondalup for $420 million.
As of 30 June 2024, the company maintained a solid cash position of $49.6 million.
VCX is one of the High Quality Dividend Stocks. It has maintained its trajectory of consistent dividend payer. The dividend cashflows projections indicates a sign of stability and growth potential, thus supporting investors interested in reliable income and long-term appreciation. The projected enhancement in dividends ensures a positive shift in the company’s financial health or earning prospects, potentially growing shareholder value.
Source: Company’s Report
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