6 High Income Stocks to Buy
Insurance Australia Group (IAG) – Dividend Yield (6.86%)
We believe that IAG has got great market power as part of an Australian insurance duopoly in an underinsured market. It is leveraged to an eventual east coast recovery with a positive Gross Written Premium (GWP) outlook and close to double digit earning per Share growth in the medium term. The current business model is really attractive in which they have de risked by de – emphasizing UK in favor of high growth Asia.
Spark Infrastructure Group (SKI) - Dividend Yield (6.47%)
Spark Infrastructure Group is an Australia-based company is engaged in the investment in electricity distribution businesses in Victoria and South Australia. Spark is a solid company with investments in Australian electricity distribution networks generating highly secure cash flow under a transparent regulatory regime. Capital expenditure on upgrading and expanding networks adds to the regulated asset base (RAB) and will drive revenue higher in the long term.
Southern Cross Media (SXL) - Dividend Yield (7.06%)
We highlight the appeal of its 7% dividend yield. We like SXL because of the resilient nature of the radio coupled with our view that SXL has been oversold based on the perceived risks at today FM. In the regional areas there was strong result with 6% Earnings before Income Tax, Depreciation and Amortization (EBITDA) growth to $65m on 2% revenue growth to $195m.
Seven West Media (SWM) – Dividend Yield (6.12%)
Seven’s television network has delivered its fourteenth consecutive half of ratings leadership, attracting 40% of all viewers. We expect this performance to continue into the second half. The company expects low to mid-single digit growth for the remainder of the fiscal year. We view this softness in expenditure indicating industry weakness as advertisers put more resources towards the online sources. Despite this pessimistic outlook we expect the margins to remain stable as the company shifts from more expensive U.S content to a greater percentage of higher margin content produced in house which is currently 50% of the total content pool. We believe seven West Media can extract higher margins from the local content while retaining a highly engaged and consolidated audience.
STW Communications (SGN) - Dividend Yield (6.28%)
STW Communications Group is Australia’s largest local marketing communications group. SGN also has operations based in New Zealand and a small but emerging footprint in Southeast Asia. SGN has a strong momentum heading into 2014. NZ and the offshore markets are delivering solid growth. Management described the new business pipeline as encouraging. Management expect FY14 NPAT to grow mid-single digits. This is prior to any new acquisitions.
Decmil Group (DCG) - Dividend Yield (5.92%)
Decmil Group provides engineering and construction services to the Australian Resources and energy sectors. The company focuses on accommodation villages and facilities as well as civil works. The company is increasingly diversified and no longer depends on winning very large contracts. The two Manus Island contracts with the Department of Immigration and Border Protection adds material diversification.
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.