View on AZJ (Aurizon Holdings)
Hi MM, This is a great format to get questions answered - please continue it! FY24 Results are out on Monday 12 Aug for AZJ but what are your views on likely dividend and potential as an income stock? Regards, Peter
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Answer
Hi Peter,
Aurizon’s core businesses are resilient cash generators; however, we think the Bulk and Container strategies remain unproven, with some risks heading into their result. As the scale of investment in those strategies slows down AZJ should return more capital to shareholders which will please investors attracted to Aurizon’s attractive, part-franked, yield.
- 9cps is expected to be announced as their interim dividend on Monday, slightly higher than the 8c paid the same time last year.
- When combined with the expected FY dividend in Feb25 of 9.7cps, it puts it on a 5.17% projected 12-month yield, though we do expect growth in that over the coming 3 years.
- We don’t mind AZJ as a defensive/income stock, we just see better opportunities for one reason or another elsewhere.
