Monthly Dividend Stock Analysis Series – Part 5
Here we are with the 5th and final piece in our series covering stocks that pay monthly dividends. So far, we have covered 2 reliable REITs, a brilliant BDC and a rockstar renewable energy company.
In case you missed it, here are the links to the other articles in this series:
- Monthly Dividend Stocks Pt 1 : Realty Income
- Monthly Dividend Stocks Pt 2: STAG Industrial
- Monthly Dividend Stocks Pt 3: Main Street Capital
- Monthly Dividend Stocks Pt 4: TransAlta Renewables
- 50+ Stocks That Pay Monthly Dividends
I stand by my assertion that all 4 of these (and the stock you will read about today) might make a welcome addition to your portfolio if you building your monthly investment income.
I hope you have found this series useful. Remember, you will find more useful articles like this on the Garnaco blog. You can also subscribe to our VIP Priority Investor List and receive details of exclusive, off-market investment opportunities every Friday.
Monthly Dividend Stock Number 5: Shaw Communications
Today, we are looking at another long-term favourite for income investors; Shaw Communications (NYSE: SJR). Shaw has been around since the 1960’s, and is one of Canada’s leading telecommunications network providers, producing around $4.1 billion (USD) in revenue.
The latest financial report from Shaw (Q2, 2020) was pretty solid. Reported revenue was just under $1 billion USD, up 3.7 per cent (3.7%). Adjusted earning before interest, tax depreciation and amortization was also up almost 10 per cent (9.5% to be precise) to $427 million USD.
Big Growth in Wireless Services
Wireless services accounted for a good portion of growth at Shaw. The company acquired 54,000 new customers under it’s Freedom Mobile segment. They now have over 1.8 million wireless customers, driving revenues for this part of the business up almost 20 per cent (20%). The company is also earning more per customer. Average billing per unit (ABPU) was up 6.8 per cent (6.8%) in Q2.
Shaw doesn’t carry huge amounts of debt, but it is raising funds from investors to see it through the coronavirus crisis. Despite this, free cash flow is up significantly year-on-year, as are other key financial metrics including net income and earnings per share. All good news considering the wider economic issues facing all businesses.
Good Cashflow and Essential Services Support Dividends
As of now, Shaw is continuing to pay its monthly dividend to stockholders at an annualized rate of $0.87 USD per share, giving investors in this stock a current yield of 5.3 per cent (5.3%). The company’s defensive business model will continue to generate decent levels of cash flow in order to continue to fund its regular. dividend payouts.
Let’s be honest, cable TV and wireless phone services are likely to be some of the last things people give up in a recession. So, Shaw is selling what is in effect an essential service in today’s day and age.
Related: Everything You Need to Know About Investing For Income
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