Five Transportation Stocks with Dividends

Austal Ltd


ASB Details

Strong order book: Austal Ltd (ASX: ASB) has been awarded US$11.8 million support contract for engineering and manufacturing services for LCS 8. The company was also chosen as preferred tenderer by the Commonwealth of Australia for Pacific Patrol Boats Replacement project which involves the construction of 21 steel hulled vessels along with life sustainment for over 30 years for an overall Government expenditure of $900 million. The group also got Littoral Combat Ship (LCS) contract to offer procurement and engineering efforts to sustain scope changes on fiscal 2015 and fiscal 2016 ships. Meanwhile, the shares of ASB have recovered over 23.93% in the last three months (as of May 09, 2016) and still trading at an attractive P/E. We maintain our “BUY” stance on this dividend yield stock at the current price of $1.495
 

ASB Daily Chart (Source: Thomson Reuters)
 
Aurizon Holdings Ltd


AZJ Details

QCA reported final decision: Aurizon Holdings Ltd (ASX: AZJ) stock rallied over 15.58% in last one month (as of May 09, 2016) at the back of recovering commodity prices and with the Queensland Competition Authority (QCA) reporting its Final Decision on Aurizon Network’s 2014 Draft Access Undertaking (2014DAU). This Final Decision involves components of the ‘building blocks’ which has the group’s Network’s Maximum Allowable Revenue (MAR) submission. The Final Decision also has an overall maximum revenue of $3.925 billion during the period of the Undertaking, against QCA’s Consolidated Draft Decision of $3.927 billion while Weighted Average Cost of Capital (WACC) is maintained at 7.17%, on track with the Consolidated Draft Decision. We believe that the stock has the potential to recover further in the coming months. Hence we give a “Buy” on this stock at the current price of $4.44
 

AZJ Daily Chart (Source: Thomson Reuters)
 
Sealink Travel Group Ltd


SLK Details

Acquisition update: Sealink Travel Group Ltd (ASX: SLK) finished the integration of Captain Cook Cruises, Western Australia business and is positioned to leverage the booming international tourism. Captain Cook Cruises has seven cruise, charter and sightseeing vessels in Perth offering commuter services managed on behalf of Transperth. Consequently, the group expanded its fleet to 72 vessels, and carries over 7 million passengers per year. Meanwhile, SLK was even added in S&P/ASX 300 Index as per S&P Dow Jones Indices’ March quarter review. SLK surged over 18.77% in the last three months (as of May 09, 2016) and we believe the stock has the momentum to rally further and hence we give a “Hold” on the stock at the current price of $4.60
 

SLK Daily Chart (Source: Thomson Reuters)
 
Qube Holdings Ltd


QUB Details

Boosting capital position: Qube Holdings Ltd (ASX: QUB) finished the retail component of its 1 for 4.4 accelerated non-renounceable pro-rata entitlement offer of new Qube shares to raise over $244 million at $2.05 per share. This coupled with institutional component, the group would raise over $494 million via the Entitlement Offer. The group also made a Heads of Agreement with Qube to enable an initial small scale mining operation from Brockman’s Marillana iron ore deposit. On the other hand, the shares of Qube rallied over 8.70% in the last four weeks (as of May 09, 2016) placing the shares at higher levels. The stock is also trading at a higher P/E. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $2.47
 

QUB Daily Chart (Source: Thomson Reuters)
 
K&S Corporation Ltd


KSC Details

Soft first half performance: K&S Corporation Ltd (ASX: KSC) recently reported that they are negotiating with the administrator of Arrium (Grant Thornton) about the continuing provision of transport and logistics services to the Arrium Distribution Business. According to the Corporations Act, the voluntary administrators at Grant Thornton, are personally liable for the payment of services offered by KSC who reported that they are in voluntary administration. The group expects that the amounts payable by Arrium for services offered till April 06, 2016 would not be paid within normal trading terms. The group also updated investors that Arrium’s lenders might not have security for the group’s assets. On the other hand, KSC delivered an after tax loss of $88.4 million for the half year ended on December 2015, due to asset impairments of $92 million. The underlying profit after tax reached $3.6 million which fell 56% as compared to the same period of last year. However, the shares of KSC rallied over 17.58% in the last three months (as of May 09, 2016) as the group earlier forecasted a 75% fall in underlying profit after tax for the first half. But the heavy rally placed the stock at higher levels and we believe that the stock is “Expensive” at the current price of $1.495
 

KSC Daily Chart (Source: Thomson Reuters)

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