ASX listed companies have many stocks which are generally resilient during times of uncertainty and when markets are volatile. Such stocks are valuable, particularly when the markets are in correction mode as they provide stability to the portfolio. The following good quality dividend stocks are best suited at such times.
Woolworths Group Limited (ASX: WOW)
Woolworths Group's financial performance and strategic decisions provide critical insights. The ACCC has confirmed it will not oppose Woolworths' proposed acquisition of Beak & Johnston Holdings Pty Ltd, a manufacturer of chilled ready meals and pastries. This acquisition will result in Woolworths owning 100% of B&J’s subsidiaries.
In its Half-Year Results Announcement for the period ended 5 January 2025, Woolworths, one of the top quality dividend stocks, reported a 3.7% increase in Group sales, reaching $35.9 billion. However, Group EBIT declined by 14.2% to $1,451 million. This decline was largely driven by a 12.8% decrease in Australian Food EBIT. Excluding one-off impacts such as industrial action, Australian Food EBIT would have declined by approximately 5%. The company's NPAT also decreased by 20.6% to $739 million, and the interim dividend was reduced by 17.0% to 39 cents per share. Despite these challenges, customer metrics have shown improvement in the second half of the year. The Group is focused on strategic priorities including improving customer experience, simplifying business operations, and unlocking its full potential. This includes a target of approximately $400 million in Support Office cost savings.
Metcash Limited (ASX: MTS)
Metcash Limited is among high dividend stocks. Its recent financial disclosures offer a comprehensive view of its performance and strategic direction. In the first half of FY25, the Group's revenue saw growth, with reported revenue increasing by 8.1% to $8.5 billion, and total revenue, inclusive of charge-through sales, reaching $9.6 billion, a 6.3% rise. This revenue expansion was supported by contributions across the Food, Liquor, and Hardware pillars, with acquisitions playing a role.
However, the revenue growth didn't fully translate to bottom-line profitability. Group underlying EBIT remained broadly flat at $246.1 million. This stability masks divergent performances within the segments. The Food pillar demonstrated strong earnings growth, up 17.9% to $119.9 million, bolstered by the Superior Foods acquisition. Conversely, the Hardware pillar experienced lower earnings due to a slowdown in Trade activity, and the Liquor pillar's EBIT saw a slight dip due to reduced strategic buying amid lower wholesale price inflation.
Key takeaways include the completion of the Superior Foods acquisition, enhancing Metcash's presence in the Food sector, and the sale of its 26% joint venture interest in Dramet Holdings Pty Ltd to Drakes Supermarkets Pty Ltd. The Board has declared a fully franked interim dividend of 8.5 cents per share. It's also important to note the decrease in Group underlying profit after tax by 5.5% to $134.6 million, while statutory profit after tax edged up by 0.6% to $141.8 million
(Source: Company Announcements)
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