These small caps paid shareholders better than the big boys
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A fair whack of ASX small caps don’t pay dividends, but there are exceptions — and apparently some pay better than their large cap counterparts.
According to Bloomberg the average dividend yield for large cap (ASX 200) stocks is 3.4 per cent.
But Stockhead found 21 stocks that paid dividends with yields greater than this (based on yesterday’s share price).
The top stock paid a 25 per cent dividend. South Australian copper miner Hillgrove Resources (ASX:HGO) paid a dividend of 1.5c per share in June.
It is not that common for resources juniors to pay dividends but Hillgrove is able to because it is already in production, delivering around 20,000 tonnes of copper per annum at its Kanmatoo project.
Live stock dealer Ruralco (ASX:RHL) paid 84c per share, a yield of 19 per cent. But it will be the last dividend paid because it is in the process of being taken over and will be removed from the ASX this Friday.
Meanwhile, tyre supplier National Tyre & Wheel (ASX:NTD) paid a yield of 9.1 per cent this earnings season. Despite negative consumer sentiment in most industries, it exceeded its earning guidance, recording $12.8m.
Other stocks that paid better than the average dividend included aviation stocks Regional Express (ASX:REX) and Alliance Aviation (ASX:AQZ).
The latter has enjoyed slow and steady growth, servicing the mining sector which is performing even as consumption in the rest of the economy stagnates. Qantas became a substantial holder earlier this year.
Regional Express, however, has declined in the last 12 months despite a $17m profit. It was hit with accusations of neglecting safety by a disgruntled employee earlier this year.
Despite the struggles of retail, two of the highest payers were in that very industry – The Reject Shop (ASX:TRS) and Adairs (ASX:ADH). These firms paid 5.8 per cent and 4.8 per cent yields respectively.
Shareholders will no doubt happily receive dividends over the next few weeks, but CommSec economist Craig James said companies need to consider more than just topping up shareholders’ bank balances.
“Adequate cash must be maintained to pay out dividends together with confidence on future profitability,” he said earlier this week.
“But cash levels as well as modest borrowings are important for reinvestment in the business and applied to new opportunities — entering new markets or engaging in mergers and acquisitions.”
He also noted some shareholders might want capital expenditure, but said in his view the global economy was slowing and hence not conducive for major investments.