ASX listed companies has stocks that pay dividends. However, these are the ones that appear to be currently undervalued though being high dividend stocks
Adairs Ltd (ASX: ADH)
Adairs Ltd (ASX: ADH) declared strong results for the first half of FY25, achieving a 6.6% growth in comparable sales, driven by Adairs' 9.3% increase and Mocka's impressive 12.4% growth. The company has made significant operational strides, including improvements in inventory availability, cost management, and customer service, which have all contributed to the positive performance. Warehouse operations have seen improvements since the company took direct control in September 2023, enhancing product availability and reducing costs. The business also expanded its store network, particularly in Queensland, with new stores opening in Robina, and plans for more openings in New South Wales and Western Australia in the coming years.
For the first half, the company generated total sales of $310.5 million, up 6.6% year-on-year, with a 5.8% rise in gross margin, totaling $186 million. The group’s underlying EBIT increased by 10%, driven by Adairs (+32.5%) and Mocka (+12.3%), although Focus on Furniture saw a 22.5% decline. The statutory NPAT rose by 9.7%, reaching $19.4 million, and the EPS improved to 11.1 cents per share.
The company declared an interim dividend of 6.5 cents per share, fully franked, up from 5.0 cents in FY24, a 30% increase. The dividend was paid on 3 April 2025, with a record date of 11 March 2025. Shareholders could participate in the Dividend Reinvestment Plan (DRP), which offered a 1.5% discount to the VWAP of Adairs ordinary shares over a five-day pricing period.
Adairs expects continued positive momentum in its core business, driven by strong product offerings and improved inventory management. However, Focus on Furniture is anticipated to face ongoing challenges due to its Victorian store portfolio and a lower order book. Mocka is expected to maintain its strong growth in Australia but continue to face challenges in New Zealand.
Dexus Convenience Retail REIT (DXC)
Dexus Convenience Retail REIT (ASX: DXC) declared a dividend distribution of AUD 0.05137 per security, with a record date of March 31, 2025, and a payment date of May 15, 2025. For the half-year ended December 31, 2024, DXC shared strong financial results, remaining on track to meet FY25 guidance with Funds From Operations (FFO) of 10.4 cents per security and distributions of 10.3 cents per security. The portfolio saw like-for-like net property income growth of 2.8%, supported by rent reviews averaging 3.1%. The company’s divestments amounted to $38.8 million, reducing its gearing to 28.7% and positioning the balance sheet for future growth. This included a redevelopment project at Glass House Mountains, expected to increase exposure to high-quality convenience retail service centres.
DXC’s statutory net profit after tax was $14.7 million, a significant turnaround from a loss of $1.7 million in the previous period. This improvement was driven by property valuation gains compared to losses in the same half of the prior year. The FFO declined by 1% to $14.3 million due to higher interest rates, but the portfolio’s contracted rental growth helped maintain strong financial performance. A net revaluation uplift of $3.2 million, or 0.5%, was achieved following independent valuations of 38 properties. This contributed to a 0.3% increase in Net Tangible Assets (NTA) per security, now at $3.57.
DXC aims to enhance its portfolio to deliver consistent income and growth. The company will focus on maintaining balance sheet flexibility and pursuing development opportunities like the Glass House Mountains redevelopment. Despite trading at a 20% discount to NTA, the REIT’s service station and convenience retail assets are expected to offer stable cash flows and resilience in valuations. DXC confirmed its FY25 guidance for FFO and distributions at 20.6 cents per security, translating to a strong distribution yield of 7.3%.
(Source: Company's Report)
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