Qantas Airways 

QAN Details

Upbeat Numbers: Qantas Airways Limited (ASX: QAN) has posted highest underlying profit before tax in the history of the company at $1,604 mn for full year 2018. Revenue for the company also came in higher at $17,060 mn compared to $16,057 mn in 2017. Statutory earnings per share came in at 56 cents per share, higher than previous year’s 46 cents per share. The strong financial performance suggests that the company has been successful in achieving its three-year business turnaround program.

Value to shareholders: Given the stellar performance, the company is determined to distribute a further $500 million of the surplus capital to the shareholders in the form of dividend and share repurchase agreement. The board has resolved to distribute 10 cents per share fully franked final dividend, totaling to $168 million. Additionally, Qantas would also return $332 million in the form of share buyback to the investors. The company has consistently paid dividends to the investors with the 5 - year average yield of 1.83%.


Dividend Graph (Source: Thomson Reuters)

The company has been determined to maintain an optimal capital structure, maintaining debt in the range of $5.1 bn and $6.3 bn. The focus is on maintaining the cost of capital, retain the financial strength and enhance the shareholder’s value in the longer run. Over the period of five years, the company has continuously worked towards reducing net debt.


Net Debt Profile (Source: Company Reports)

Stock Performance: The stock tumbled from the high of $6.83 recently with the investors looking to square off their position before the result announcement in August 2018. Taking support at $6.24, the stock has rebounded from that level and is looking positive. Major momentum and strength indicators are looking positive. We recommend ‘BUY’ on the stock at the current market price of $6.42.


 
QAN Daily Chart (Source: Thomson Reuters)
 

BHP Billiton 

BHP Details

Growth trickles to bottomline - The company posted full year underlying EBITDA at US$24.1 billion and attributable profit of US$8.9 bn. The growth has been reflected in the earnings per share which was 33% higher at 168 cents (US$) per share. Further, there has been an increase of 42% in the dividend per share from the previous comparable period. In the second half of the financial year, the company declared the dividend of 63 US cents per share, totaling to 118 US cents per year with the dividend payout ratio of 69%. The company has the annual dividend rate of 4.7% and 5-year historical yield of 5.06%.


Dividend Graph (Source: Thomson Reuters)

The company has been consistent in paying dividends and working towards enhancing the shareholders value.

Stock Performance: The stock closed in negative for the day with minor fall in the price from the previous trading session. The activity remained almost muted, which has been the case with the price consolidating in a wide range of $31.95 and $35.29. We do not expect any significant movement in the stock until it breaks the near-term resistance of $34.40 and closes above it.  However, healthy financial performance coupled with consistent dividend payment by the company would create positive value for the shareholders going forwards with support from commodity prices. We maintain ‘HOLD’ on the stock at the current market price of $33.01.


 
BHP Daily Chart (Source: Thomson Reuters)
 

Westpac Banking Corporation

WBC Details

Weak NIM: Westpac banking Corporation suffered a dent on the net interest margin due to industry wide sluggishness. The company has however paid the dividends consistently, maintaining the annual dividend yield at 6.59%.  The company usually pays dividend twice each year and declared 100% franked, interim dividend of 94 cents per share, on May 7^th, 2018 and paid on July 4^th 2018.  The company can rightly be called as the dividend Aristocrat, paying dividend consistently to the shareholders since 1983.

Stock Performance: The stock has generated negative YTD return of 8.67% and has been in the downward spiral from quite sometime now. It has however respected its long term, crucial support level of $27.13 and rebounds from the same level after every fall, making it a good level to enter the stock. The stock has roughly formed a falling wedge pattern (bullish indicator if supported by volume and no divergence seen). Any close above the level of $31.5 can take the stock higher. Shareholders who seek income stocks can include WBC in their portfolio for the regular dividend income. We recommend ‘Buy’ on the stock at the current market price of $28.54.


 
WBC Daily Chart (Source: Thomson Reuters)
 
 

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.