Five high dividend paying stocks

 
Rio Tinto Ltd


RIO Details
 
Planning investment in lithium projects:Rio Tinto Ltd (ASX: RIO) is up 3.85% on June 06, 2016 and is planning on mining a giant lithium deposit in Serbia given Lithium demand surge. US$20 million have also been committed to the Jadar deposit project examination taking the total investments to US$70 million. RIO is also about to lower its near term maturing gross debt by $1.5 billion after accepting for purchase a total of $141 million of debt under its Dutch Auction Offer and $1.359 billion under its Any and All Offer.
 

Cash generation and efficiency (Source: Company reports)
 
Rio Tinto along with its partners, the Government of Mongolia and Turquoise Hill Resources, have approved the next stage in the development of Oyu Tolgoi copper and gold mine in Mongolia. The development of the underground mine will start in mid-2016 post the approval of a $5.3 billion investment and requisite permits. While commodity prices will likely remain subdued for some time at the back of demand from China, Rio’s low-cost assets should serve it well. The company also offers an impressive dividend yield. The stock has corrected over 15.86% (as of June 03, 2016) in last one month and we feel investors need to leverage this correction and we maintain our “Buy” at the current price of $45.22
 

RIO Daily Chart (Source: Thomson Reuters)
 
Telstra Corporation Ltd


TLS Details
 
Capital management program:Telstra Corporation Ltd (ASX: TLS) has announced a capital management program of at least $1.5 billion to commence in the H1FY17. Telstra is currently examining various ways to return capital to shareholders and intends to use the proceeds from the sale of Autohome shares. However, the company’s $1.6 billion sale of a controlling stake in Autohome Inc to Ping An Insurance Group Co of China Ltd is reported to be challenged by minority shareholders. The company is also expanding its presence in healthcare sector and building out capabilities in numerous areas including primary, aged and residential care, hospitals, radiology, pharmacy, and health analytics. Telstra recently secured an estimated $180 million three-year contract from the government to manage a new national cancer screening register from next year. The company is also looking at Asia for growth and one of its key projects in this area will be the rollout of a fibre optic backhaul link running overland in Taiwan and providing redundancy for traffic between Japan, US, Hong Kong and Singapore. Accordingly, the stock has rallied over 10.26% in the last three months (as of June 03, 2016) driven by these initiatives. On the other hand, we believe that the group’s core business would continue to face pressure given the rising competition. Further, TLS’ five different network issues over the last two months along with a 40% premium charge versus peers are also raising the pressure. We thus put an “expensive” recommendation at the current market price of $5.58
 

TLS Daily Chart (Source: Thomson Reuters)
 
Duet Group


DUE Details
 
Spark Infrastructure’s exit of an interest in Duet:Duet Group (ASX: DUE) acquired Energy Developments Ltd in July 2015. Following the change in the business composition, Spark Infrastructure has also decided to exit its 10.6% economic interest in Duet over a period of time. Duet owns stakes in essential Australian gas and electricity transmission networks, including the Dampier Bunbury Pipeline (DBP). Duet Group also finished stapled security purchase plan offer for about $45.6 million and raised funds for Duet Investment Holdings’ acquisition of 20% interest in DBP and working capital. DUE has a strong dividend yield, and we recommend a “Hold” at the current market price of $2.35
 

DUE Daily Chart (Source: Thomson Reuters)

Stockland Corporation Ltd


SGP Details
 
Delivering a sustainable growth:Stockland Corporation Ltd (ASX: SGP) reported 3.5% comparable annual sales growth for specialty stores and 2.3% for comparable sales. The company’s land bank increased with new projects launches at Altrove (Schofields, NSW), Aura (QLD), Newport (QLD) and Pallara (QLD). The company has also acquired remaining 50% stake in Stockland Bundaberg for $61.5 million in April 2016. SGP logistic and business parks momentum continued and 23% of portfolio is executed while office portfolio reported occupancy of 95% as of third quarter of 2016.
 

SGP performance (Source: Company reports)
 
The company expects EPS growth of 6.5%-7.5% and FFO security growth of 9%-10% in FY16. Trading at attractive P/E and with a decent dividend yield, we give a “Buy” recommendation at the current market price of $4.64
 

SGP Daily Chart (Source: Thomson Reuters)
 
Computershare Ltd


CPU Details
 
Growing through acquisition: Computershare Ltd (ASX: CPU) has acquired Altavera Mortgage Services, LLC and has completed the acquisition of Capital Markets Cooperative, LLC (CMC) on April 29, 2016. Altavera and CMC are a vital part of Computershare's strategy to grow its global mortgage services business, which includes mortgage servicer Specialized Loan Servicing (SLS) in Highlands Ranch, Colorado and Homeloan Management (HML) in the United Kingdom. UK Asset Resolution lately announced Computershare Limited as preferred bidder for mortgage servicing.
 

CPU 1H16 Highlights (Source: Company reports)
 
On the other hand, the management reiterated its full-year 2016 guidance of EPS being 7.5% lower on full-year 2015 results. Trading at a higher P/E, we rate the stock “Expensive” at the current market price of $10.50
 

CPU Daily Chart (Source: Thomson Reuters)

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