MENU

Results: Is Dicker Data the best ASX dividend share to buy today?

The Dicker Data Ltd (ASX: DDR) share price has avoided the market selloff on Wednesday and stormed higher.

In afternoon trade the shares of Australia’s largest and longest established Australian-owned distributor of information technology products are up 5% to $4.53.

In earlier trade Dicker Data’s shares were up as much as 9% to an all-time high of $4.69.

Why did Dicker Data’s shares shoot higher today?

Investors have been fighting to get hold of the company’s shares following the release of a very positive first quarter update.

According to the release, the company achieved revenue of $386.9 million in the first quarter. This was a 21.1% increase on the prior corresponding period and was driven by the strong performance of existing vendor partnerships and the benefits of new vendors.

On the bottom line things were even better. Dicker Data reported a quarterly profit before tax of $13.5 million, up a massive 46.7% on the prior corresponding period.

Profits have grown even quicker than revenue thanks to its costs as a percentage of sales falling, resulting in its profit before tax margin improving to 3.5% from 2.7%. Though, this is only expected to be temporary due to a significant increase in working capital investments.

What now?

Despite the impressively strong quarter, management has resisted the temptation to lift its guidance for the full year and has re-iterated its full year pre-tax profit guidance of $51.4 million for FY 2019.

But considering the strong share price rally today, I suspect the market believes management is being conservative and that Dicker Data will deliver another stronger than expected full year result.

Should you invest?

Dicker Data is one of my favourite dividend shares on the Australian share market and today’s result has only reinforced this view.

Although its shares have charged higher today, I still see a lot of value in them for income investors. After all, based on management’s previous dividend guidance for FY 2019, its shares still provide a fully franked 4.9% dividend yield.

Overall, I would rate it as a buy along with National Storage REIT (ASX: NSR), Rural Funds Group (ASX: RFF), and these dividend shares.

NEW! Top 3 Dividend Bets for 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. The first two currently offer fat, fully franked yields. The last is a surprising REIT offering you the benefits of being a landlord with none of the hassle! You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and RURALFUNDS STAPLED. The Motley Fool Australia has recommended National Storage REIT. 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 Scott Phillips.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now