Depending on your investor profile, a strong dividend flow may be a good goal.
I’ve taken a look at the research reports coming out of Macquarie and selected three companies that the broker’s analyst team estimates will continue to deliver strong dividend yields for at least the next few years.
Not surprisingly, one is an infrastructure company, but the other two may be from less obvious areas for stable payments.
Let’s take a look at what they are saying.
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The company is a gas pipeline operator, and hence its revenues and returns remain fairly stable over time.
Macquarie said in its recent research note on the company that APA highlights that it expects further opportunities due to the exit from the coal energy market and increased demand from data centres.
The broker also highlights the fact that the gas reservation policy of the federal government gives incentives to companies to develop new gas fields.
The Macquarie team said:
The policy for APAs also includes the requirement that exporters ‘make commercial arrangements to overcome any infrastructure constraints that might otherwise prevent them from supplying.’ This should support more pipeline investment in the medium term.
Macquarie’s share price target on the company is $10.41, which is slightly higher than the price of $10.13 at the time of writing, but the broker is predicting dividend yield 5.7% this year, which will increase to 5.9% by 2028.
EBOS Group Limited (ASX: EBO)
The company is, in its own words, “the largest and most diversified Australian marketer, wholesaler and distributor of health care, medical and pharmaceutical products”.
Macquarie actually has a very bullish price target on the stock in addition to the dividend yield that has landed it on this list.
EBOS in April Downgraded its FY26 underlying EBITDA guidance To $610 to $620 million, down from the previous range of $615 to $635 million due to higher fuel and energy costs.
On the positive side of the ledger, a new first pharmaceutical wholesaler agreement has been signed with the federal government, which will benefit EBOS’s Symbian division, Macquarie said.
Macquarie has a price target on the stock of NZ$36.44, compared to NZ$19.60 at the time of writing.
The broker is forecasting a dividend yield of 5.9% for this year, rising to 6.9% by 2028.
Nine Entertainment Company Holdings Limited (ASX: NEC)
The Macquarie team said in their research note on Nine that they believe the advertising market may be nearing a cyclical low point, “with early signs of improving business confidence”.
Macquarie said:
Given that inflation has not materially worsened compared to expectations, we are optimistic about the recovery in the advertising market in FY2017.
Macquarie analysts also noted that a new agreement requiring digital platforms to pay for news is likely to be in place as early as FY27, which could also be beneficial to Nine, which has titles such as Australian Financial Review And age to.
Macquarie has a price target of $1.05 on the shares, compared with 93.5 cents at the time of writing, and is predicting a dividend yield of 6.4% this year, rising to 8% in 2028.