Reporting Season

Key dividend risers to keep on radar

By Market Index
Tue 22 Feb 22, 1:25pm (AEST)

Key Points

  • Stocks to declare higher dividends today
  • Cochlear, Jumbo Interactive, Alumina, ARB Corp, AUB Group, Deterra, Best & Less

Here’s a snapshot of some key stocks that announced an increase in their dividend, along with their financial result this morning.

Cochlear (ASX: COH): The Sydney-based health company increased its interim dividend by 35% to $1.55 a share, representing a payout of 65% of underlying net profit.

The dividend increase came on the back of what was a strong half year result, with underlying net profit up 20% to $157.5m on a constant currency basis over the half to 31 December, which was a beat against both Bell Potter and consensus forecasts.

While statutory net profit fell -28% to $169.3m, sales revenue jumped 10% to $815m.

Cochlear maintained its full-year underlying net profit guidance of between $265m and $285m, a jump of between 13% to 22% from last year.

The market liked Cochlear’s half year result, with the share price up 5.30% at the open.

Jumbo Interactive Limited (ASX:JIN): The lottery ticket retailer declared a fully franked interim dividend up 22% to 22 cents per share.

Underpinned by continued strength of lottery retailing segment, an improved jackpot cycle and increased customer activity, the company declared strong double-digit growth across key performance metrics, including underlying earnings and net profit - both up 18%.

The emerging Software-as-a-Service (SaaS) and Managed Services segments also made a significant contribution to the 41% growth in Group Total Transaction Value (TTV).

Despite what was a strong result, Jumbo’s share price was down -3.88% an hour out from the open and fell away by around -11% going into lunch today.

What appears to have disappointed the market was the Jumbo’s underlying earnings margin which reduced by -5.3 percentage points to 53.7%.

Alumina (ASX: AWC): The company declared a total FY21 dividend of US6.2 cents per share (CPS) – five year averaging yield 7.3% - versus US5.7 CPS in 2020.

Net profit (ex-significant items) of $226m was lineball with consensus, but lower than Bell Potter’s forecasted $243m.

The aluminium realised price was $2,557/t versus $1,721/t in 2020.

Despite this morning’s respectable FY21 result, the stock got caught up in the market’s overall selloff, down -1.64%.

ARB Corporation (ASX: ARB): The automobile parts supplier lifted its interim dividend 34.5% to 39¢ on earnings of 84.5¢ a share.

The company posted a 27.6% jump in net profit after tax of $68.9m, which was a strong beat against both Bell Potter and consensus expectations.

The company maintains a positive outlook based on a strong customer order book.

However, management noted that the flow on impacts of covid, including disruptions to supply chains, shipping networks, retail operations and customer fulfilment, requires the company to remain focused on managing customer expectations and supply chain pressures.

Going into lunch the share price was down -1.40%.

AUB Group (ASX: AUB): The equity-based insurance broker network declared a fully franked interim dividend of 17.0 cents per share (1HFY21: 16.0 cps), up 6.3%.

Due to a mixture of strong organic growth and contribution from acquisitions primarily in Australian Broking and Agencies, the company reported underlying net profit after tax of $30.6m, up 16.7% on first half FY21.

Underlying earnings per share (EPS) has increased to 41.15 cents per share, up 16.2% over the prior period on a continuing operations basis.

FY22 underlying net profit guidance in the range of $72.0m - $74.0m, represents 19.0% - 22.3% growth over FY21 continuing operations.

AUB Group CEO and Managing Director, Michael Emmett, said:

“I’m pleased to report strong results for the Group in 1H22. Our business continued to perform well, delivering growth across all divisions.”

Going into lunch the share price was down around -10% and well down on the financials sector at large, down -1.44% so far today.

Deterra (ASX: DRR): The mining royalty business declared a fully franked interim dividend of 11.68 cents per share, representing 100% of net profit.

Underlying earnings were up 86% to $88.7m.

Deterra recently refinanced its existing credit facility, increasing total debt limit from $40m to $350m, providing it with the option to "act flexibly" in the acquisition of value-accretive royalties.

The share price was down around -1.56% going into lunch today.

Best & Less (ASX: BST): The value clothing retailer rewarded investors with a 11c maiden interim dividend despite a -21% decline in net profit to $20m, which was inline with Bell Potter expectations.

Much of the downturn is attribute to pandemic-related lost trading days.

While the 245-store group reported flat like-for-like (LFL) sales, online sales improved by 24% on the prior period.

The dividend payout represents 60-80 per cent of net profit and will be paid on March 31.

Given ongoing market uncertainty, the group is not providing sales or earnings guidance.

But the group expects further improvement over the rest of the half in the absence of any further covid outbreaks and enforced lockdowns.

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Market Index

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