ASX Dividend Stocks: The 5-8% yielder you've probably never heard of
SunRice stands out as one of the ASX’s most reliable dividend stocks, delivering consistent payouts despite its under-the-radar status.
Source: Shutterstock
Mentioned
KEY POINTS
- SunRice offers a trailing 5.5% dividend yield, with a strong track record of maintaining or growing its ordinary dividend for the past 14 years
- The stock surged 70% in the past 12 months but remains illiquid, with a 20-day average trading volume of ~25,000 shares ($275,000)
- FY25 guidance projects stable revenue, moderate EBITDA growth, and NPAT pressure from a higher tax rate, with risks from rice shortages and geopolitical tensions
- SunRice’s diversified portfolio and 53% international revenue provide resilience against cyclical challenges like water availability and climate variability
I'm on a mission to uncover some of the ASX's most compelling dividend-paying stocks. The aim is to provide readers with the key data and forecasts to make more informed decisions. Today, we're taking a look at Ricegrowers.
Ricegrowers (ASX: SGLLV), also known as SunRice, is a key player in producing, marketing and distributing rice and rice-based products globally. The company operates a dual-class share structure, comprising A-Class shares (held by rice growers, not publicly traded) and B-Class shares (listed on the ASX). Ricegrowers is one of few ASX-listed companies that has a five-letter ticker, used to differentiate it from a standard primary share listing.
Why is SunRice interesting?
SunRice offers a resilient, globally diversified consumers staples exposure, with a solid dividend profile. Some of the key attributes to note include:
Global Leader in Rice and Diversified Food Products: SunRice sources rice from twelve countries, including Cambodia, China, Taiwan, and Thailand. Its diversified portfolio, including microwave rice, snacks, gourmet products, and animal feed, caters to retail, food service, and industrial customers.
Unique Business Model with Structural Advantages: The company operates through six segments: rice pool, international rice, rice food (value-added products), Riviana Foods (gourmet and specialty foods), CopRice (animal feed), and corporate. It generates 53% of its revenue from outside of Australia, spanning across over 1,500 products and 45 major brands.
From an earnings perspective:
Resilient CAGR growth in the past five years: Since FY19, SunRice has delivered compound annual growth rates of 9.5% for revenue, 14.9% for net profit, and 12.8% for dividends, respectively.
Performance through the cycle: SunRice has built financial resilience throughout the years amid fluctuating water availability and its impact on rice crop size. In times of drought, SunRice has absorbed overheads to keep rice production viable while ensuring mills had throughput.
Consistent dividends: Since FY11, SunRice has either grown or maintained its full-year ordinary dividend.
AgFood Conference Highlights
SunRice made an appearance at the 23rd Australasian AgFood Conference in Melbourne, which provided some further insights and guidance for the second half of FY25.
FY25 guidance: The Group expects full-year results to show revenue broadly in line with FY24, moderate growth in EBITDA on the back of improved profit margins and NPAT impacted by a higher effective tax rate.
Near-term risks: The presentation flagged several risks for the remainder of the year, including Northern Hemisphere rice shortages increasing prices and competition, Middle Eastern geopolitical tensions disrupting shipping and sales, lower-priced competitors adding pressure, and challenging broader market conditions.
The Bottom Line
SunRice stands out as one of the ASX’s most reliable dividend stocks, delivering consistent payouts despite its under-the-radar status. The stock has surged 70% over the past 12 months, though it traded largely flat from 2021 to late 2023.
SunRice price chart (Source: TradingView)
Its dual-class share structure and five-letter ticker often cause it to fly under investors’ radar, with minimal institutional coverage. Despite a $700 million market cap and inclusion in the S&P/ASX Agribusiness Index, SunRice remains relatively illiquid, with a 20-day average trading volume of about 25,000 shares (approximately $275,000).
As an agricultural business, SunRice operates in a cyclical environment where water availability and climate variability significantly impact rice supply from sourcing countries, affecting profitability. This has led to sharp declines in Australian crop sizes during periods like FY14–17 and FY18–21. However, as the chart below illustrates, SunRice has consistently delivered stable revenues through these cycles by leveraging its diversified operations.
Source: SunRice
