The Australian market has shown robust performance recently, with a 2.1% increase over the last week and a notable 10% rise over the past year, complemented by an anticipated annual earnings growth of 13%. In this thriving environment, dividend stocks like Charter Hall Group offer potential for investors looking for steady income combined with capital appreciation opportunities.
Overview: Charter Hall Group, listed on the ASX under the ticker CHC, operates as a prominent Australian property investment and funds management group with a market capitalization of approximately A$6.07 billion.
Operations: Charter Hall Group generates revenue primarily through its funds management segment, which brought in A$515.60 million, and its property investments segment, contributing A$142.20 million.
Dividend Yield: 3.4%
Charter Hall Group offers a moderate dividend yield of 3.44%, which is below the top quartile of Australian dividend stocks. Despite lower profit margins this year at 11.7% compared to last year's 42.9%, its dividends are well-supported, with a payout ratio of 43.8% and a cash payout ratio of 45.3%. The company has maintained stable and reliable dividends over the past decade, with an anticipated earnings growth rate of 18.28% per year, suggesting potential for future dividend sustainability and growth.
Overview: New Hope Corporation Limited, operating in the energy sector, focuses on the exploration, development, production, and processing of coal and oil and gas properties with a market capitalization of approximately A$4.18 billion.
Operations: New Hope Corporation Limited generates revenue primarily through its coal mining operations in New South Wales and Queensland, totaling approximately A$1.88 billion and A$0.05 billion respectively.
Dividend Yield: 8.7%
New Hope's dividend yield of 8.7% ranks in the top quartile for Australian stocks, yet its reliability is questionable due to a history of volatility and lack of coverage by earnings and cash flows. Recent corporate actions include a A$300 million fixed-income offering and executive changes, with Brent Charles Albert Smith joining as director. Despite trading below fair value, forecasted average earnings decline of 7.3% annually over the next three years may challenge future dividend sustainability.
Overview: Super Retail Group Limited operates in the retail sector, specializing in auto, sports, and outdoor leisure products across Australia and New Zealand, with a market capitalization of approximately A$3.27 billion.
Operations: Super Retail Group Limited generates revenue through its diverse retail segments, with Super Cheap Auto (SCA) contributing A$1.48 billion, Rebel at A$1.30 billion, Boating, Camping and Fishing (BCF) earning A$876 million, and Macpac adding A$220.60 million.
Dividend Yield: 5.2%
Super Retail Group has seen a decade of fluctuating dividends, with recent years marked by increases. Despite this, the company maintains a sustainable payout ratio of 65.5% and a low cash payout ratio at 28.6%, indicating strong coverage by both earnings and cash flows. However, its dividend yield at 5.25% remains below the Australian market's top dividend payers. Additionally, Super Retail Group trades at a favorable P/E ratio of 12.5x compared to the broader Australian market average of 19.3x, suggesting relative undervaluation amidst concerns over an expected earnings decline of 0.4% annually over the next three years.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ASX:CHC ASX:NHC and ASX:SUL.
