If there’s one thing that almost every investor in the sharemarket wants right now, it’s income. Capital growth is likely to remain subdued in the year ahead. The spectre of horribly volatile stock prices in recent years continues to haunt shareholders.
Naturally, then, no listed company in its right mind would be cutting dividends in this kind of environment – imagine the reception. But at the same time earnings are under pressure. Are CEOs paying out more dividends than they are earning, in the rush to give investors what they demand? If they are, unless earnings rebound soon, it’s possible that those payouts will be cut. You don’t want to be holding the stock when that happens.
Using the S&P/Capital IQ data base, we ran a simple screen over the All Ordinaries index to see which companies are paying out more than they are earning. There are 36 in all, as the table below shows – some are big names, and there are a lot of real estate investment trusts in there.
There could very well be a valid explanation. (See our follow up analysis here.) But if one of your stocks is in there, best have a look.
|Company Name||Dividends per share ($)||Basic EPS ($)||DPS/Basic EPS||Basic EPS excl. XO ($)||DPS/Basic EPS excl. XO||Charter Hall Retail REIT (CQR)||0.261||0.032||816%||0.086||303%|
|Charter Hall Retail REIT (CQR)||0.261||0.032||816%||0.086||303%|
|Abacus Property Group (ABP)||0.165||0.021||786%||0.021||786%|
|Transurban Group (TCL)||0.295||0.038||776%||0.038||776%|
|IOOF Holdings (IFL)||0.37||0.084||440%||0.084||440%|
|Charter Hall Group (CHC)||0.182||0.049||371%||0.049||371%|
|DUET Group (DUE)||0.16||0.044||364%||0.044||364%|
|Ardent Leisure Group (AAD)||0.117||0.039||300%||0.039||300%|
|Toll Holdings (TOL)||0.25||0.09||278%||0.09||278%|
|Sydney Airport Holdings (SYD)||0.21||0.078||269%||0.089||236%|
|GPT Group (GPT)||0.366||0.14||261%||0.165||222%|