Are these mid-cap and blue-chip dividend stocks good to invest in?

Computershare Ltd

CPU Dividend Details
 
Profit drop but strengthening core operations via acquisitions: Computershare Ltd (ASX: CPU) reported a 10.5% drop in its 1H16 underlying NPAT of US$143.8m over the prior corresponding period (pcp) while EBITDA declined 6.6% (US$242.3m) over pcp. Further, revenue decline was about 2.2%. The statutory earnings per share jumped 445.5% on pcp. The company did warn about softening in operating environment with regards to FY16 outlook and mentioned that management EPS would be 7.5% lower than that of FY15. On the other hand, CPU is set to acquire Capital Markets Cooperative which has >200 originator clients and a collective annual loan origination of greater than $100 billion. The group is considering an acquisition price of USD 71.2 million and with this acquisition, CPU intends to further strengthen its US mortgage servicing presence.
 
 
HY16 Performance (Source: Company Reports)
 
The group also was chosen as the preferred supplier to carry out the mortgage servicing activities of UK Asset Resolution Limited (UKAR). This is a seven-year contract which involves around £30bn of assets under management. On the other hand, we believe that CPU shares are trading at expensive levels with a relatively higher P/E. The group also has a lower dividend yield. The stock has already corrected over 19.19% (as of February 10, 2016) in the last six months and we believe the negative momentum in the stock would continue in the coming months. Accordingly, we give an “Expensive” recommendation on the stock at the current price, and would review the stock at a later date.
 
 
CPU Daily Chart (Source: Thomson Reuters)
 

Qube Holdings Ltd

QUB Dividend Details
 
Revised proposal for Asciano: Qube Holdings Ltd (ASX: QUB) along with GIP, CPPIB and CIC Capital (Consortium) recently offered a proposal to acquire the entire stake at Asciano, as a part of Qube’s strategy to become a major provider of integrated logistics solutions in Australia by concentrating on import and export supply chains.
 
Qube’s estimated synergies via Asciano’s acquisition (Source: Company Reports)
 
Based on the revised proposal, Asciano shareholders would get A$7.04 cash and 1 Qube share for every Asciano share held. In fact, Asciano has determined that QUB’s revised proposal is superior to that offered by Brookfield. The shares of Qube delivered an outstanding performance and rallied over 57.25% (as of February 10, 2016) in the last five years driven by its strong performance and core business growth. However, Qube shares have been correcting by 13.45% since the last one year (as of February 10, 2016) as the stock is trading at higher valuations with a high P/E and low dividend yield. We thus believe that the stock is “Expensive” at the current price.
 
 
QUB Daily Chart (Source: Thomson Reuters)
 

Bank of Queensland Ltd

BOQ Dividend Details
 
Focusing on niche business and customer satisfaction: Bank of Queensland Ltd (ASX: BOQ) stock corrected over 19.41% in the last six months and by 21.19% during this year to date (as of February 10, 2016) impacted by the rising competitive pricing coupled with decreasing interest rates impact on margins. However, despite the tough market conditions, BOQ managed to deliver a cash net interest margin improvement by 15 basis points to 1.97% during 2015 fiscal year, driven by better BOQ Specialist business. Accordingly, the group continues to focus on its high margin businesses like BOQ Finance and BOQ Specialist. Bank of Queensland also enhanced its Net Promoter Score to 30.5 in 2015 as compared to less than zero in early 2013, and way ahead of the major banks average of 0.5. BOQ also intends to spend $15.0 million in FY16 towards reshaping its organizational structure to better affect the group’s strategy and to be at par with competitors. This is believed to help move towards cost to income ratio in the low 40% range. The bank is launching Virgin Money mortgage product via its broker channel during the first quarter of 2016. BOQ also continues to focus on expanding distribution channels of Retail Bank, by increasing accredited brokers to 4,000 from 2,500.
 

Capital adequacy as of November 2015 (Source: Company Reports)
 
Management reported that the outlook for margins is also improving as compared to over a year ago. Variable mortgage repricing led to a better net interest margins which would contribute to the bank’s earnings during 2016. Meanwhile, BOQ is also trading at a reasonable P/E and has a solid dividend yield. Accordingly, we give a “BUY” recommendation on the stock at the current price of  $10.81
 
 
BOQ Daily Chart (Source: Thomson Reuters)

 
Telstra Corporation Ltd

TLS Dividend Details
 
Entered into an MOU with NBN network: Telstra Corporation Ltd (ASX: TLS) entered into a Memorandum of Understanding (MoU) with NBN network to offer design, engineering, procurement and construction management for NBN via the group’s HFC footprint. The group already got two new contracts from NBN which are estimated to generate a first year revenue of over $80m based on the volume of work. This deal with NBN boosted the shares of TLS by over 3.63% in the last three months (as of February 10, 2016). However, the increasing consolidation of the smaller players might hurt the group’s potential growth prospects going forward. Moreover, management estimates only a low single digit EBITDA growth in FY16. We thus put an “Expensive” recommendation on this dividend stock at the current price.
 
 
TLS Daily Chart (Source: Thomson Reuters)
 

Aurizon Holdings Ltd

AZJ Dividend Details
 
Strong dividend yield: Aurizon Holdings Ltd (ASX: AZJ) shares plunged over 25.15% (as of February 10, 2016) in the last three months impacted by the ongoing fall in commodity prices. AZJ also estimates a range of $215-240 million (before tax) of total non-cash impairment charge during the first half of 2016.
 

December quarter performance (Source: Company Reports)
 
On the other hand, AZJ is focusing on operation savings to offset its top line pressure and forecasts a further overall savings of around $310-$380 million during FY16 to FY18. Moreover, the heavy correction in the stock placed AZJ at a cheaper P/E. Aurizon Holdings also has a very strong dividend yield. The upcoming half year report ending December 2015 is also due and would reveal more insights. Overall, we believe that the stock has a potential to rise in long term and issue a “BUY” recommendation at the current price of  $3.89
 
 
AZJ Daily Chart (Source: Thomson Reuters)

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