The common theme is, as long as there is underlying profit growth, that will fuel dividend growth. Unlike S-REITs, these payout ratios are less than 50%, providing the opportunity for these companies to raise their retained earnings and hold on to their net asset values. Jardine C&C’s payout ratio is 40% based on underlying profits, and JMH’s payout ratio is 39%.
The Jardine group’s sell off may provide some trading ideas for yield seekers as dividend plays. For instance, Jardine C&C’s “underlying” net profit rose by 6% to US$1.16 billion. As a result its dividends per share rose by 6% to US$1.18 giving a yield of 4.8%. Jardine C&C fell to a 23-month low before rebounding on March 8.
Jardine Matheson’s share price is at a 5- year low at its March 8 price of US$39.11. The last time JMH tested US$39.20 was in 2020, during the depths of the pandemic. At this price, its FY2023 dividend of US$2.25, up 5% y-o-y, provides a dividend yield of 5.7%. JMH’s “underlying profit” rose by 5% y-o-y in FY2023 to US$1.66 billion.
