Two best quality dividend stocks to buy in November with good upside potential are
Westpac Banking Corporation (ASX: WBC)
Westpac Banking Corporation, one of the dividend paying companies, delivered a solid performance in FY24, characterized by stable net interest income growth of 3%, reaching $18,916 million, which was primarily driven by a 3% increase in average interest-earning assets. Loan book expansion remained strong, with business loans up by 7% and housing loans by 3%. Net interest margin (NIM) held steady with a marginal 1-basis-point decline to 1.95% (excluding notable items). Non-interest income, however, saw a 15% drop to $2,835 million, and operating expenses, excluding notable items, rose by 7% to $10,944 million, impacting overall operational efficiency. Total loans advanced by 4% to $807 billion, led by 5% growth in Australian housing loans (excluding RAMS) and an 8% rise in business lending, which underscored Westpac’s robust lending portfolio. Deposits rose by 5% to $674 billion, reinforcing a stable funding position. Within the Consumer segment, net profit contracted by 17% amid intense competition in the mortgage space, though net loans and deposits still grew by 4% and 8%, respectively.
Conversely, the Business and Wealth segments reported a 13% increase in net profit and a 9% rise in pre-provision profit, with business loans expanding by 7%. Institutional banking also showed positive momentum, with net profit up 2% and pre-provision profit climbing 4%, backed by a 6% boost in operating income. In New Zealand, Westpac’s net profit surged by 10%, with a slight rise in pre-provision profit and a 3% increase in operating income, propelled by lending growth and modest NIM improvement.
Westpac is among ASX best long term dividend stocks. Its strong capital base facilitated a 6% increase in fully franked dividends, leading to a final payout of 76 cents per share and a total annual dividend of 151 cents per share, reflecting a commitment to shareholder returns near the top of its payout range.
Westpac’s disciplined strategy throughout FY24 positions the bank for sustainable growth, despite competitive pressures. Its Consumer division regained traction in the second half of the year, while the Business segment demonstrated robust fundamentals. Looking forward, anticipated easing in monetary policy—potentially including rate cuts by the Reserve Bank of Australia in 2025—could alleviate pressure on household and business finances, fostering demand for housing and business credit. Additionally, Westpac’s strong capital position supports ongoing shareholder returns through an expanded $1 billion share buyback program. Operational improvements, notably a 50% reduction in mortgage approval times, have also bolstered customer satisfaction. Entering 2025, Westpac is well-positioned amid a favourable domestic economic backdrop, with resilient consumer sentiment and a strong labour market supporting its growth outlook.
Helia Group Limited (ASX: HLI)
Helia Group Limited recently submitted its quarterly data to APRA for the three months ending 30 September 2024, highlighting mixed performance trends across its insurance and investment segments. Year-to-date Gross Written Premiums (GWP) lag the previous corresponding period, but the 3Q24 GWP improved over 3Q23 levels. Low industry-wide volumes of new housing loans with over 80% Loan to Valuation Ratios (LVR), combined with the Federal Government’s First Home Guarantee scheme and increased lender self-insurance, have impacted Loan Mortgage Insurance (LMI) demand. Consequently, insurance revenue fell relative to the prior corresponding period, reflecting recent declines in GWP and less favourable variations in top-up premium credits. Nonetheless, Helia has reaffirmed its FY24 insurance revenue guidance of $375 million to $415 million.
Total incurred claims were less favourable than in the previous period but remained negative, benefiting from liability adjustments on prior claims. This decline in the Liability for Incurred Claims (LIC) reflects factors like dwelling value appreciation, cancellations, and property sales without claims. Helia expects total incurred claims to remain negative through FY24, aided by favourable housing trends and claim reductions. Meanwhile, net investment revenue has outperformed the prior year due to a higher running yield across the investment portfolio and robust returns on bonds, equities, and infrastructure investments in shareholder funds. Changes in interest rates have largely offset the insurance finance income/expense impact on technical funds.
Helia, one of the highest paying dividend stocks is actively working to expand and defend its LMI market share, focusing on strategies to increase the LMI market size and drive operational and risk management efficiencies. Its refined corporate vision—to be the leading provider in LMI—is now supported by four strategic pillars: defending and growing LMI market share, expanding the LMI market, enhancing operational flexibility, and achieving best-in-class performance. As part of this approach, Helia is collaborating with lenders to broaden risk tolerance, including initiatives to increase investor lending to a 95% LVR and reduce underwriting restrictions in select high-density postcodes.
For 2H24, Helia projects total incurred claims will rise but stay below its target through-the-cycle incurred claims ratio of around 30%. FY24 insurance revenue guidance remains on track, and the Board anticipates the annual ordinary dividend will align with FY23, reflecting its commitment to steady shareholder returns. Despite a challenging near-term landscape for new business, Helia continues to optimize operational efficiencies while balancing immediate and longer-term investments to drive shareholder value.
(Source: Company’s Report)
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