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Capital gains and dividend income are the two main ways investors reap benefits from investing in the stock market. With stocks such as Ruralco Holdings, investors can have the best of both world by buying dividend payers when they’re deemed undervalued. If you’re a long term investor, these cheap dividend stocks can boost your portfolio value.
Ruralco Holdings Limited (ASX:RHL)
Ruralco Holdings Limited sells and markets merchandise, fertilizers, water products, and financial services products to rural and related customers in Australia. The company employs 1983 people and with the company’s market cap sitting at AUD A$320.89M, it falls under the small-cap category.
Over the past 10 years, Ruralco Holdings has been distributing dividends back to its shareholders, with a recent yield of 4.89%. RHL’s upcoming dividend are appropriated covered by its profits over the next three years, according to industry analysts, with a forecasted payout ratio of 54.65%. At the current payout ratio of 60.15%, RHL’s yield surpasses Australia’s low-risk savings rate of 2.40%. RHL is undervalued by 23.19%, which makes for an attractive investment. Interested in Ruralco Holdings? Find out more here.
Adairs Limited (ASX:ADH)
Adairs Limited operates as a specialty retailer of homewares and home furnishings in Australia and New Zealand. Established in 1918, and headed by CEO Mark Ronan, the company now has 469 employees and with the market cap of AUD A$358.29M, it falls under the small-cap group.
Over the past 2 years, Adairs has been distributing dividends back to its shareholders, with a recent yield of 3.70%. At the current payout ratio of 62.89%, ADH’s yield exceeds Australia’s low risk savings rate of 2.40%. Analysts forecast future payout ratio to be 68.95%, indicating that ADH’s upcoming dividend payments are well-covered by earnings. ADH is also trading beneath its true value by 41.75%, meaning that now is a good time to buy ADH at a good price. Interested in Adairs? Find out more here.
Nick Scali Limited (ASX:NCK)
Nick Scali Limited, together with its subsidiaries, engages in sourcing and retailing household furniture and related accessories in Australia. The company size now stands at 370 people and with the stock’s market cap sitting at AUD A$544.32M, it comes under the small-cap group.
Over the past 10 years, Nick Scali has been distributing dividends back to its shareholders, with a recent yield of 5.95%. Best dividend payers in Australia, on average, yield 5.52%. NCK exceeds this by 0.43%, and according to industry analysts, its future payout ratio should still allow this yield to hold. This is consistent with the growing dividend trend we’ve observed from NCK over time. NCK is also trading below its intrinsic value by 47.89%, which makes for an attractive investment. Dig deeper into Nick Scali here.