The Two Stocks having growth potential while giving High Yield Dividend are:-
Air New Zealand Limited (ASX: AIZ)
Air New Zealand Limited released an investor update for May 2024 on 27 June 2024.
In May, the group capacity decreased by 2.5%, with May and June typically being the two lowest demand months for the airline, except in FY23 when there was exceptionally high demand during the initial post COVID recovery period. While long-haul international ASKs declined by 5.0%, short-haul international ASKs reportedly increased by 2.1% and domestic ASKs were marginally down by 1.0% as compared to last year.
The decline in Group YTD RASK compared to the prior year was due to a significant mix change for the 2024 financial year to date, with long-haul capacity growth and load factors being substantially higher relative to short-haul.
Short-haul YTD RASK, which includes the Domestic, Tasman, and Pacific islands networks, declined by 6.6% compared to last year.
Being one of the Top Dividend stocks, AIZ has maintained a track record of being a consistent dividend payer since 2009. For the first half of 2024, AIZ reported an unimputed ordinary interim dividend of 2.0 cents per share. This dividend equates to a 41% payout ratio, reflecting the company's policy to distribute ordinary dividends ranging from 40% to 70% of underlying net profit after tax.
Comparatively, on 30 June 2023, AIZ issued a special dividend of 6.0 cents per share.
Additionally, there has been a recent slowdown in domestic corporate and government demand. However, the prospects for business recovery appear promising in the medium term and during the first half of FY25. The holiday season is expected to significantly boost travel demand, and the company's ongoing marketing efforts during this period are anticipated to play a crucial role in its sales growth.
Air New Zealand’s dominant position in the New Zealand airline industry, coupled with favorable long-term industry dynamics, positions the company well for resilient operational and financial growth.
Zimplats Holdings Limited (ASX: ZIM)
Zimplats Holdings Limited, while announcing its quarterly results for the period ending on 31 March 2024, reported that during the quarter, the mining volumes remained the same as the previous quarter but saw a 9% increase year-on-year due to the pillar reclamation operations at Rukodzi Mine and the ongoing production escalation from Mupani Mine, which is currently in development.
Milled volumes rose by 7% and 3% from the comparative and previous quarter, respectively. The planned reline of the mills at the Selous Metallurgical Complex (SMC) was postponed to the fourth quarter of FY2024, with volumes benefiting from enhanced milling rates and running time, in line with increased ore supply. Concentrate recoveries remained steady compared to the prior quarter and increased by 5% from the comparative quarter, leading to a 2% quarter-on-quarter and 14% year-on-year rise in the volume of 6E in concentrate produced.
6E metal in the final product showed a 12% improvement year-on-year and was 1% higher than the previous quarter.
Zimplats maintains a strong focus on expanding its operations by advancing key projects in its pipeline. Notably, the company plans to replace production from the depleted Rukodzi Mine by incorporating the Bimha and Mupani mine development and upgrade projects. Additionally, these projects are expected to replace production from the Ngwarati and Mupfuti mines, which are anticipated to be depleted in FY25 and FY28, respectively.
The company’s expansion efforts highlights its strong approach towards growth despite having experienced a significant decline in revenue generation and earnings from mine depletion, and the company continues to advance on efforts to offset the current as well as future depletion of production.
Moreover, the company’s financial performance still significantly exceeds its levels from 2019 and supports a significantly undervalued position as seen through a P/B ratio of 0.70x, a P/CF ratio of 3.53x while its Dividend Yield also remains robust at 8.55% supporting a significant income generating opportunity for the stakeholders. The company’s cost management efforts also stand out and are expected to deliver further improvement in earnings in the future.
Source: Company's Report
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