There are some stocks, which not only give regular income streams in the form of dividends but also have the potential to generate wealth. Being able to remain steady, these are the Best Passive Income Investments for long term. Investing in ASX dividend shares may be one of the best ways to make passive income.
McMillan Shakespeare Limited (ASX: MMS)
McMillan Shakespeare Limited (ASX: MMS), on 20 February 2024, announced its half-year results for the period ending 31 December 2023.
During this period, the company achieved a normalized revenue from continuing operations of $261.1 million, reflecting an 8.1% growth over the previous corresponding period. As of 31 December 2023, the company maintained a cash position of $145.5 million.
MMS has a track record of being a consistent dividend payer, evidenced by its recent interim fully franked dividend of 76.0 cps, compared to 58.0 cps in the same period last fiscal year
McMillan Shakespeare’s compelling investment appeal lies in its strong industry and operating fundamentals supporting substantial revenue growth year on year while the company’s approach towards margin expansion and cost management has also supported a substantial increase in profitability from $63 million in 2022 to $97 million in 2023.
The company anticipates that its business activities in the second half of FY24 will closely align with the first half, continuing to deliver notable financial growth. MMS aims to capitalise on organic growth opportunities within the EV market, led by a robust auto supply chain and the expected increase in EV adoption throughout the year. This presents a significant growth opportunity for the company.
Transurban Group (ASX: TCL)
Transurban Group's FY23 results display a strong performance across all operational fronts. For the fiscal year 2024, Transurban Group has announced a distribution of 32.0 cents per stapled security for the six months ending on 30 June 2024.
This slight increase from one period to the next reflects Transurban's commitment to delivering consistent or marginally higher returns to its investors. Such distributions are indicative of the company's strategy to balance shareholder returns with its operational and financial objectives, ensuring stability and reliability in its dividend policy.
Transurban Group offers Building Passive Income Ideas as it has provided forward-looking dividend projections, aiming for 0.34 cents per share by June 2025 and 0.38 cents per share by June 2027. These forecasts indicate the company's planned trajectory of increasing dividends over the specified period, underscoring its commitment to enhancing shareholder returns and reflecting confidence in its future financial performance and strategic direction.
Transurban has recently achieved significant improvements, including an enhanced free cash flow position and a strengthened market position, which favorably position the company to meet its growth objectives and substantially enhance its operating capabilities.
The company maintains an extensive delivery pipeline, with key projects nearing completion in 2024 and additional projects slated for 2025 and 2026. This pipeline provides significant assurance of revenue generation and capital inflows. The outlook over the next 5-10 years also remains highly promising, supporting substantial long-term growth and scalability.
MyState (ASX: MYS)
MyState remains committed to key growth initiatives and operational enhancements throughout 2024. A significant focus is placed on enhancing its financial structure by surpassing the 70% mark for customer deposits as a proportion of overall funding by the end of FY24. This strategic move is poised to provide the bank with greater capital flexibility, enabling enhanced lending activity and operational expansion. Furthermore, the company targets an increase in Return on Equity to 8.0%, which will bolster its ability to deliver sustained dividend growth through organic capital appreciation. Building upon its existing improvements in capital structure, as evidenced by the increasing capital from June 2023 to December 2023, this initiative aims to fortify MyState's financial position. Moreover, recent investments, the expansion of earning assets, and increased lending activity have collectively strengthened the company's earnings capabilities and overall financial foundation. These developments significantly mitigate risks associated with its banking operations, further solidifying MyState's position in the industry.
The company offers Ways to Earn Passive Income as it has established itself as a reliable dividend payer, with its dividend yield showing a consistent increase since 2020. This positive momentum is anticipated to continue, with dividends projected to climb to $0.12 per share by August 2025 and further to $0.13 per share from August 2026 to August 2028. These forecasts underscore the company's steadfast dedication to sustaining and potentially enhancing shareholder returns in the foreseeable future.
Source: Company’s Report
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