Dividends are regular income streams generated from the profits of a company and they play a significant role in an investor’s consideration for shares. If it is supported by cash flows, the dividends will be sustainable and the investor would want growing profits and income from the stocks. One of the important thing to note is that the dividend stock increases its dividend most of the years. Lot of people understand the power of compound interest and hope to live off with the dividend income stream and not having to use the principle amount. But not always, is the case that if a stock has a big yield, it necessarily means that the stock is a good buy. The key thing sometimes is sustainability.
Scentre Group (ASX: SCG) is one stock that has a decent dividend profile and its total store sales were up 2.0% for the quarter ending March 2018 and 1.4% for the year. Major in-store sales were up 0.8% for the quarter and 0.3% for the year. Company successfully opened the $80 million redevelopment of Westfield Plenty valley in March 2018, which was 100% leased. The latest guidance on approximately 4 per cent full year growth in funds from operations and distribution of 22.16 cents per security, was just a re-confirmation of company’s target. It was noted that total specialty in-store sales increased by 20 per cent for the quarter ending on 31 March 2018 (1Q FY18) and 1.4 per cent for the year.
Scentre group was trading at a market price of $4.385 as at market open on July 20, 2018 and has seen a performance change or a rise of 7.33% over the past one year. The most recent dividend declared was 10.870 cents with ex-dividend date of February 13, 2018 and dividend pay date as February 28, 2018. The stock has an annual dividend yield of 4.95% with 21.62% franking, and has stayed consistent in terms of dividend payments over the years.
Commonwealth Bank of Australia (ASX: CBA) is making a community benefit payment of $1.25 million as directed by ASIC. Group’ statutory net profit was of the order of $2.30 billion while unaudited net cash profit of $2.35 Billion was reported for the March quarter. The Group has been able to increase its dividends, even whilst providing for any kind of costs, and strengthening all aspects of its balance sheet so…

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