Yahoo Finance Exploring The Risks Of MA Financial Group And One Better Option On The ASX
Investing in dividend stocks is a popular strategy for those seeking regular income from their investments. However, it's important to assess the sustainability of these dividends. For instance, MA Financial Group presents a cautionary tale with its high payout ratio, which could signal potential challenges in maintaining its dividend levels.
Top 10 Dividend Stocks In Australia
Name | Dividend Yield | Dividend Rating |
Collins Foods (ASX:CKF) | 3.09% | ★★★★★☆ |
Nick Scali (ASX:NCK) | 5.22% | ★★★★★☆ |
Fiducian Group (ASX:FID) | 4.09% | ★★★★★☆ |
Charter Hall Group (ASX:CHC) | 4.01% | ★★★★★☆ |
Fortescue (ASX:FMG) | 9.11% | ★★★★★☆ |
Centuria Capital Group (ASX:CNI) | 7.27% | ★★★★★☆ |
Eagers Automotive (ASX:APE) | 7.17% | ★★★★★☆ |
Premier Investments (ASX:PMV) | 4.56% | ★★★★★☆ |
Diversified United Investment (ASX:DUI) | 3.17% | ★★★★★☆ |
Australian United Investment (ASX:AUI) | 3.59% | ★★★★☆☆ |
Click here to see the full list of 27 stocks from our Top ASX Dividend Stocks screener.
Underneath we present one of the stocks filtered out by our screen and one to consider sidestepping.
Top Pick
Fortescue
Simply Wall St Dividend Rating: ★★★★★☆
Overview: Fortescue Ltd is an Australian company that specializes in the exploration, development, production, processing, and sale of iron ore domestically and internationally, with a market capitalization of approximately A$67.43 billion.
Operations: The company generates revenue primarily from metals, particularly iron ore, totaling A$18.47 billion, with an additional segment in energy contributing A$79 million.
Dividend Yield: 9.1%
Fortescue's dividend yield stands at a robust 9.11%, placing it well within the top quartile of Australian dividend payers. Despite a history of volatility in dividend payments, recent years have shown improvement with dividends now comfortably covered by both earnings and cash flows, with payout ratios standing at 74.2% and 73.1% respectively. This contrasts sharply with some peers struggling with unsustainable payouts. However, investors should note forecasts suggesting an average earnings decline of 18% annually over the next three years, potentially impacting future dividends.
One To Reconsider
MA Financial Group
Simply Wall St Dividend Rating: ★☆☆☆☆☆
Overview: MA Financial Group Limited, operating in Australia, offers a range of financial services with a market capitalization of approximately A$708.64 million.
Operations: The company generates revenue primarily through three segments: Lending (A$44.65 million), Asset Management (A$176.07 million), and Corporate Advisory and Equities (A$48.28 million).
Dividend Yield: 4.6%
MA Financial Group's dividend sustainability is questionable with a payout ratio of 112.3% and a cash payout ratio of 180.3%, indicating dividends are poorly covered by both earnings and cash flows. Despite a dividend yield of 4.6%, it falls below the top quartile benchmark of 6.5% in the Australian market. Although dividends have been reliable, MAF has only been distributing dividends for six years, and its profit margins have declined from last year's 5.9% to this year’s 3.3%.
Unlock comprehensive insights into our analysis of MA Financial Group stock in this dividend report.
Taking Advantage
Take a closer look at our Top ASX Dividend Stocks list of 27 companies by clicking here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ASX:FMG and ASX:MAF.
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