6 Dividend Stocks (Yield)
6 Dividend Stocks
Insurance Australia Group (IAG) – Dividend Yield (6.86%)
We believe that IAG has got great market power as part of an Australian insurance duopoly in an underinsured market. It is leveraged to an eventual east coast recovery with a positive Gross Written Premium (GWP) outlook and close to double digit earning per Share growth in the medium term. The current business model is really attractive in which they have de risked by de – emphasizing UK in favor of high growth Asia.
Spark Infrastructure Group (SKI) - Dividend Yield (6.47%)
Spark Infrastructure Group is an Australia-based company is engaged in the investment in electricity distribution businesses in Victoria and South Australia. Spark is a solid company with investments in Australian electricity distribution networks generating highly secure cash flow under a transparent regulatory regime. Capital expenditure on upgrading and expanding networks adds to the regulated asset base (RAB) and will drive revenue higher in the long term.
Southern Cross Media (SXL) - Dividend Yield (7.06%)
We highlight the appeal of its 7% dividend yield. We like SXL because of the resilient nature of the radio coupled with our view that SXL has been oversold based on the perceived risks at today FM. In the regional areas there was strong result with 6% Earnings before Income Tax, Depreciation and Amortization (EBITDA) growth to $65m on 2% revenue growth to $195m.
Seven West Media (SWM) – Dividend Yield (6.12%)
Seven’s television network has delivered its fourteenth consecutive half of ratings leadership, attracting 40% of all viewers. We expect this performance to continue into the second half. The company expects low to mid-single digit growth for the remainder of the fiscal year. We view this softness in expenditure indicating industry weakness as advertisers put more resources towards the online sources. Despite this pessimistic outlook we expect the margins to remain stable as the company shifts from more expensive U.S content to a greater percentage of higher margin content produced in house which is currently 50% of the total content pool. We believe seven West Media can extract higher margins from the local content while retaining a highly engaged and consolidated audience.
STW Communications (SGN) - Dividend Yield (6.28%)
STW Communications Group is Australia’s largest local marketing communications group. SGN also has operations based in New Zealand and a small but emerging footprint in Southeast Asia. SGN has a strong momentum heading into 2014. NZ and the offshore markets are delivering solid growth. Management described the new business pipeline as encouraging. Management expect FY14 NPAT to grow mid-single digits. This is prior to any new acquisitions.
Decmil Group (DCG) - Dividend Yield (5.92%)
Decmil Group provides engineering and construction services to the Australian Resources and energy sectors. The company focuses on accommodation villages and facilities as well as civil works. The company is increasingly diversified and no longer depends on winning very large contracts. The two Manus Island contracts with the Department of Immigration and Border Protection adds material diversification.
These dividend yields are current on the date of publishing this artcle (04/04/2014).
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