Six fully franked dividend stocks with positive ROE

 
Automotive Holdings Group Ltd


AHG Details

Boosted Capital position from acquisitions: Automotive Holdings Group Ltd (ASX: AHG) stated that it’s Share Purchase Plan has closed oversubscribed following successful completion of fully underwritten placement to raise $90 million. AHG earlier reported a 7.2% increase in revenues to $5.25 billion in FY 16 and the earnings per share grew 2.4% to 28.7 cents per share, which is slower than operating profit primarily due to costs related to acquisitions and a few one-offs including impairment of assets. The statutory NPAT grew 2.2% to $90.1 million.
 

FY 16 Financial Performance (Source: Company Reports)
 
Moreover, AHG has successfully raised $90 million through the placement and raised up to $20 million to fund automotive acquisitions. The transformation program’s core focus for Refrigerated Logistics business would drive efficiencies and synergy savings in FY2017. The group lately announced for the retirement of director Peter Stancliffe. AHG stock rose over 17.62% in the last three months (as of September 26, 2016), and still trading at a decent dividend yield and a reasonable P/E. Accordingly, we give a “Buy” recommendation on the stock at the current price of $4.33
 

AHG Daily Chart (Source: Thomson Reuters)
 
Super Retail Group Ltd


SUL Details

Restructuring Businesses: Super Retail Group Ltd (ASX: SUL) reported an 8.2% growth in the sales to $2.42 billion in FY 16 (for 53 weeks to July 02, 2016) while the normalized net profit after tax increased by 2.2% to $108.6 million as compared to the corresponding period FY 15 (52 weeks after adjusting for restructuring costs and brand name impairment). The restructuring costs are of $45.8 million after tax associated with transformation of Rays and Infinite Retail businesses.
 

FY 16 Financial Performance (Source: Company Reports)
 
Moreover, SUL has invested in new and refurbished stores. SUL stock recovered over 20.21% in last three months (as of September 26, 2016). We believe the group’s efforts coupled with recovering consumer confidence would boost the stock higher. Accordingly, we give a “Hold” recommendation on the stock at the current price of $10.36
 

SULDaily Chart (Source: Thomson Reuters)
 
Greencross Ltd


GXL Details

Decent growth in FY 16: Greencross Limited (ASX: GXL) reported a revenue growth of 14% to $733.7 million in FY 16 driven by growth in same store sales and network expansion. The EBITDA increased by 38% to $87.1 million while underlying EBITDA rose 12% to $97.5 million. On the other hand, the group reported that their overall EBITDA growth was impacted due to a subdued level of vet acquisitions in the second half and challenging retail conditions in Western Australia. Despite this, GXL’s NPAT grew by 82% to $34.6 million and the underlying NPAT was up 10% to $42.1 million.
 

FY 16 Financial Performance (Source: Company Reports)
 
Additionally, GXL had added 21 stores, 23 clinics (including 14 in-store clinics) and 14 grooming salons in FY 16. For FY 17, GXL would add 20 new stores out of which 7 have opened year to date (YTD), and 15 new in-store clinics out of which six are under construction YTD.  In addition, for FY 17, GXL expects the underlying EBITDA and NPAT growth to be at similar levels to FY16. We maintain a “Hold” recommendation on this dividend yield stock at the current price of $6.46
 

GXLDaily Chart (Source: Thomson Reuters)
 
Blackmores Limited


BKL Details

Weakness expected in first quarter of FY17: Blackmores Limited (ASX: BKL) sales grew 52% to $717 million in FY 16 as the sales in Australia are boosted by over $200 million in China influenced sales. BKL in FY 16 reported the net profit after tax of $100 million, which is up 115% on the previous year. In addition, BKL had acquired Global Therapeutics in the fourth quarter 2016. However, the Australian wholesale market is volatile and has softened in recent weeks due to the retailers destocking and some exporters changing the channels through which they acquire products.
 

FY 16 Financial Performance (Source: Company Reports)
 
Therefore, the first quarter result is forecasted to be down as compared to the prior corresponding period. BKL stock fell over 14.45% in last three months (as of September 26, 2016), and still trading at a higher P/E. Accordingly, we give an “Expensive” recommendation on this dividend yield stock at the current price of $115.70
 

BKLDaily Chart (Source: Thomson Reuters)
 
Virtus Health Ltd


VRT Details

Robust growth in international operations: Virtus Health Ltd (ASX: VRT) reported an Australian operations segment EBITDA growth of 3.8% to $71.2 million in FY 16 while the international operations reported for segment EBITDA growth of 138% to $5.7m as the Singapore clinic reduced loss. VRT has reported 11.6% growth in the revenue to $261.2m and the NPAT grew 14.5% to $34.8m on prior corresponding period (pcp) mainly due to the growth from its international operations.
 

FY 16 Financial Performance (Source: Company Reports)
 
Moreover, VRT is still the market leader in Australia, as well as is expanding in Ireland, Singapore, UK and Europe. As a result, VRT stock rose over 27.80% in six months (as of September 26, 2016), and still we give a “Hold” recommendation on this dividend yield stock at the current price of $7.84
 

VRT Daily Chart (Source: Thomson Reuters)
 
Village Roadshow Ltd


VRL Details

Theme parks and cinema exhibition grew in FY 16: Village Roadshow Ltd (ASX: VRL) posted a flat attributable net profit after tax before material items and discontinued operations while earnings before interest, tax, depreciation and amortization, excluding material items and discontinued operations is of $168.8 million, up 1.8% from $165.7 million of FY15. On the other hand, VRL has reported growth for fifth consecutive year of the Cinema Exhibition division, growth from the Gold Coast Theme Parks and the inclusion of approximately six months of Opia in the Marketing Solutions division for FY16.
 

FY 16 Financial Performance (Source: Company Reports)
 
VRL has strong cash flows, and has consideration of special dividend for the future along with growth initiative among all the divisions which gives the group a strong future visibility. We give a “Buy” recommendation on the stock at the current price of $5.00
 

VRLDaily Chart (Source: Thomson Reuters)

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