Two High Quality Dividend Stocks in Turbulent Markets

Team Veye | 04-Sep-2024

Australian share market enlists plenty of Dividend Paying Companies. However, ASX 200 has some Top Quality Dividend Stocks, which offer stability and reliability even when the markets become topsy-turvy.

Vicinity Centres (ASX: VCX)

Vicinity Centres (ASX: VCX) declaring its fiscal year 2024 results for the period ended 30 June 2024 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, standing at 14.6 cents and 12.3 cents, respectively, attributed to robust leasing results and overall portfolio performance.

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.

Over the last five years, the company has demonstrated consistent revenue growth, rising from $1.2 billion in 2020 to $1.32 billion in 2024. Concurrently, it has markedly enhanced its earnings profile, with funds from operations (FFO) increasing from $417 million to $664 million. Additionally, there has been a significant rise in net operating cash generation, which grew from $472 million to $690 million during the same timeframe. The overall financial structure and debt profile of the company have also remained stable with an asset base of $15.7 billion and total debt of $4.6 billion.

VCX is among the Best Long Term Dividend Stocks having maintained its trajectory of consistent dividend payer. The dividend cashflows projections indicate a sign of stability and growth potential, thus supporting investors interested in reliable income and long-term appreciation. The projected rise in dividends ensures a positive shift in the company’s financial health or earning prospects, potentially enhancing shareholder value.

The company is persistently moving forward with its strategic expansion initiative, concentrating on acquiring premium retail properties while simultaneously enhancing the quality and ambiance of its current retail store network.Furthermore, the organization has outlined essential divestments for the upcoming year, which are expected to bolster overall asset performance and optimize operational efficiency.

The company's vast operational network, complemented by Vicinity's strategically positioned and diversified retail stores, grants the company significant access to a large demographic, as its store locations are in close proximity to approximately two-thirds of the national population. Concurrently, the enhancement of key performance indicators such as occupancy rates and Net Promoter Score (NPS), alongside a commitment to further improve and expand the company's store network and operational capabilities, is expected to enable the organization to sustain its robust financial performance in the future. 

Super Retail Group Limited (ASX: SUL)

Super Retail Group Limited (ASX: SUL) announced its FY24 annual results for the period ended 30 June 2024, 

Super Retail Group achieved another year of record sales in FY24, with a 2% increase to $3.9 billion, reflecting the effective implementation of the Group's strategic initiatives.

Online sales for the Group rose by 9 percent, reaching $485 million, and constituted 13 percent of total sales, up from 12 percent in the previous comparable period. Notably, Click & Collect transactions represented 45 percent of the Group's online sales.

The Group's gross margin improved by 10 basis points to 46.3 percent, despite heightened promotional competition across its operational categories.

The Group’s operating cash flow totalled $635 million, which was $81 million lower than the previous comparable period, primarily due to increased income tax payments of $133 million in FY24 compared to $64 million in FY23.

The Group is among High Quality Dividend paying stocks having reported a statutory earnings per share (EPS) of 106 cents and a normalized EPS of 107 cents, declaring a fully franked final ordinary dividend of 37 cents per share and a fully franked special dividend of 50 cents per share. This, combined with the interim dividend, resulted in a total dividend distribution of 119 cents to shareholders during FY24.

As of 30 June 2024, the Group maintained a cash balance of $218 million.

SUL has demonstrated notable fundamental advancements in recent years, particularly in FY24, where the company experienced consistent growth in its Active Club Membership base and an increase in the Club Member Net Promoter Score (NPS). This growth, coupled with the rising proportion of Club Members contributing to total Group sales—accounting for 77% in FY24—underscores the company's robust sustainability in future sales and revenue potential. 

Source: Company’s Report

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