Yesterday I highlighted 3 companies that were due to pay out big dividends this financial year – and potentially grow dividends in the year ahead.
The following 3 companies are flying under the radar of the professionals and offer an opportunity for retail investors to pick up shares paying consistent, solid dividends.
Lifehealthcare Group Ltd (ASX: LHC)
Medical device distributor Lifehealthcare is forecasting revenues of ~$114.5 million for the 2016 financial year – and similar earnings margins as previous years. Assuming a lower margin (to be conservative) suggests Lifehealthcare could report a net profit of around $8 million – placing it on a P/E of just over 9x. The company’s trailing dividend yield is 7.4% unfranked – although it could fall slightly this year. This is one company to hold for the long term given the strong tailwinds.
Industrea REIT (ASX: IDR)
An industrial property trust I’ve highlighted on a number of occasions previously (including here in 2014) is still being missed by the professionals. While investors are unlikely to get much capital growth – the share price has hardly budged in the past 2 years – shares have delivered a 27% return including dividends reinvested since July 2014. Industrea is currently yielding 7.3% and expects to pay a higher distribution in 2017.
Countplus Limited (ASX: CUP)
The financial services company offers wealth management, financial planning and accounting services to its clients. At the current share price of 74 cents, Countplus has a dividend yield of 10.8% – thanks to its fully franked quarterly 2 cents dividends. That’s a grossed up rate of 15%!
When the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) only managed low single digit returns in the 2016 financial year – holding Countplus for the dividend alone is one way to thrash the index. The bonus for investors is that Countplus owns 5.4% of cloud SMSF software provider Class Ltd (ASX: CL1).
Retail investors can find quality, high dividend paying stocks if they are willing to look beyond the usual suspects in the top 20. Not only do they pay lovely fully franked dividends, but there’s the potential for strong capital gains too.
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The Motley Fool Australia owns shares of Class Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.