During reporting season, the following three businesses caught my eye because of the impressive results they delivered in the first half of 2017. They range in size from $100 million to $54 billion and all pay dividends.
Online travel agent Webjet Limited (ASX: WEB) announced growth in earnings-per-share (EPS) from continuing operations of 59.8% to 20.6 cents for the first half of 2017. Both its business-to-consumer (B2C) and business-to-business (B2B) offerings are growing strongly and the company seems to be unaffected by the issues plaguing its larger peer, bricks-and-mortar agent Flight Centre Travel Group Ltd (ASX: FLT).
Webjet is guiding for full-year earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations of $61.1 million. Capital expenditure is expected to be $10.5 million and although the company has some $56.6 million of debt sitting on its balance sheet, this is comfortably covered by $95 million in cash holdings.
Given the above, I estimate the current annualised underlying net profit after tax (NPAT) run-rate of the business is about $35 million. Based on this forecast, the stock trades on a price-to-earnings ratio (PER) of just over 30. It also pays a dividend yield of 1.4%.
Blood plasma therapy and flu vaccine giant CSL Limited (ASX: CSL) reported a very impressive set of numbers for the latest reporting period. Underlying EPS at constant currency (CC) rose 38.6% to US$1.81 on the back of a 36.2% rise in underlying NPAT to US$827 million. It is quite common for small immature companies to deliver this sort of percentage growth, but very rare for companies as large as CSL which has a market capitalisation of $53.8 billion.
The company is guiding for full-year constant currency underlying NPAT growth of between 18% and 20% which implies full-year EPS of more than US$3 by my estimates. This translates to a PER of about 30 at current prices and the stock pays a dividend yield of 1.5%.
At the small end of the market, housebuilder Tamawood Limited (ASX: TWD) capped at just $100.4 million announced EPS growth of 34.4% for the first half of 2017. The result was even more impressive because last year's figures included an $0.9 million benefit from a legal settlement. This is a significant amount in the context of $3.3 million NPAT delivered in the same period.
It pains me to write about Tamawood because I used to be a shareholder. Despite being aware of its frugal management team, low share price and clear franchise growth strategy I decided to sell because I was worried about high house prices in Australia. I am regretting that decision today.
Hot on the heels of releasing its first-half results, Tamawood announced that it expects full-year profit for 2017 to be 20% above 2016. Like CSL, this forecast seems quite conservative since the first half was over 30% stronger and Tamawood also confirmed that the year to the end of February is tracking more than 30% ahead of last year.
Based on the 20% guidance figure, Tamawood currently trades on a PER of just over 10. It carries no debt and thanks to its capital light business model pays out a high percentage of profits as dividends. The company has a long track record of growing dividends and currently pays 26 cents per share each year, which equates to a yield of 6.6% at the current stock price.
