DDU shareholdings: earnings season wrap up HY2017

By | March 26, 2017

Author: Mr and Mrs DDU.

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Now that our holdings have reported for the first half of the 2017 financial year, we can review how some of our shares have done and what profit & dividend they reported.

We are long-term holders of all the businesses we buy, so one good or bad report isn’t necessarily going to sway our minds to make a decision. But it’s good to monitor how our businesses have performed.

Obviously, the key thing we’re looking for is dividend growth, which should be a key sign of profit growth. A growing profit in the long-term should hopefully mean a growing share price. That’s the thinking, anyway.

Some reported earnings per share (EPS) figures are based on either ‘continuing operations earnings’* or ‘normalised earnings’* because that’s the company’s (and our) preferred measure for the future of the business. We’re only showing very few stats – if you like stats you probably already know about how the below companies did, if you don’t like stats then you probably don’t care!

So let’s have a look at the 6-monthly reports for some of the highlights of our portfolio:

Altium (ASX:ALU)

EPS Growth: Up 7%

Dividend growth: Up 10%

Annual dividend growth streak started: September 2012

Challenger (ASX:CGF)

EPS Growth*: Up 7%

Dividend growth: Up 6%

Annual dividend growth streak started: March 2009

Annual dividend maintained or grown streak started: September 2005

Class (ASX:CL1)

EPS Growth*: Up 17%

Dividend growth: Maintained but now fully franked, which equates to a 42.8% dividend increase.

Annual dividend growth streak started: Financial Year 2013 (before it was listed)

Greencross (ASX:GXL)

EPS Growth*: Up 7%

Dividend growth: Up 6%

Annual dividend growth streak started: November 2009

Healthscope (ASX:HSO)

EPS Growth: Down 8%

Dividend growth: Dividend maintained

Annual dividend growth streak started: Not started yet

Annual dividend maintained or grown streak started: March 2015

InvoCare (ASX:IVC)

EPS Growth*: Up 11.8%

Dividend growth: Up 11.8%

Annual dividend growth streak started: March 2006

Rural Funds Group (ASX:RFF)

EPS Growth (including property revaluations): Up 150%

Adjusted funds from operations (aka net rent): Up 48%

Dividend growth: Up 8%

Annual dividend growth streak started: June 2015

Ramsay Health Care (ASX:RHC)

EPS Growth: Up 13%

Dividend growth: Up 12.8%

Annual dividend growth streak started: April 2000

Washington H. Soul Pattinson (ASX:SOL)

EPS Growth*: Up 66.6%

Dividend growth: Up 4.8%

Annual (ordinary) dividend growth streak started: In 2000

WAM Capital (ASX:WAM)

EPS Growth: Down 35%

Dividend growth: Up 3.45%

Annual dividend growth streak started: August 2009

WAM Research (ASX:WAX)

EPS Growth: Down 21%

Dividend growth: Up 5.88%

Annual dividend growth streak started: August 2009

 

Thoughts

A bit of a mixed bag. Generally the ones we bought a long time ago didn’t perform well for us whilst the newer ones (over the last 12-18 months) did do well. It’s pleasing to see the ones that fit the ‘DGI’ model the closest, performed the most reliably. It has re-affirmed our view that we want to concentrate on a smaller, great group of shares rather than including a wider group of average ones.

One interesting point about WAM Capital (WAM) and WAM Research (WAX) is that it looks like their profit is down heavily, but that’s because they grew their underlying portfolios less strongly compared to the year before. In the six months to 31st December 2015 WAM grew its portfolio by 16.5% compared to 9.7% to 31st December 2016. WAX grew its portfolio by 18.9% in the six months to December 2015 and 11.3% to December 2016. I hope that makes sense!

Overall, this wasn’t a fantastic earnings season for us, but it was pretty good. Hopefully the ones that didn’t grow their dividend this time around can find some growth next time.

 

Did the shares you own report well during February?

 

Thanks for reading this article about our investing journey Down Under.

Onwards and upwards!

6 thoughts on “DDU shareholdings: earnings season wrap up HY2017

    1. Dividends Down Under Post author

      I try to ignore the share price unless we are buying. The dividends will hopefully trump any share price blips – as long as the reports are positive!

      Mrs DDU

      Reply
  1. Buy, Hold Long

    A bit of a mixed bag as you say but it looks like overall they have done well. As long as the business fundamentals haven’t changed then your investing style shouldn’t change also. I hope the second half is shaping up to be better and can’t wait for next reporting season.

    Reply
    1. Dividends Down Under Post author

      Thanks BHL, we are pretty happy overall and are enjoying adding even more to our portfolio until the next reporting season hits. Hope you had some good results too!

      Mrs DDU

      Reply
  2. Dividend Diplomats

    DDU –

    Pretty damn interesting approach, I like it. EPS Growth rate may have to be another item I add to my investment spreadsheet. I like the comparison of EPS change and dividend growth, two very correlative (at least should be) financial events.

    -Lanny

    Reply
    1. Dividends Down Under Post author

      Thanks Lanny! We are always curious to see of other ratios/valuation methods, anything to strengthen the investment choice is something we like to track!

      Mrs DDU

      Reply

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