Dividend diamonds on AIM
Yes, I know AIM companies are not supposed to be big dividend payers but a surprisingly large number of them are yielding a decent amount, including many that look as if they have the underlying earnings to grow the dividend.
A quick search of AIM stocks reveals that 10 stocks with dividends covered at least twice by forecast earnings are yielding at least 3%.
Included in their number is Belvoir and its sector peer, Property Franchise Group PLC (LON:TPFG).
If forecast earnings cover is a metric that you regard with suspicion, it is worth noting that all 10 stocks (see table below) have their current dividends fully covered by free cash flow (FCF) per share, which effectively means that none of them is having to borrow or dip into reserves to support the dividend.
Of the 10 stocks listed, one (Wynnstay Group) is rated a ‘hold’ by brokers, six are rated “buy” and the other three (First Property, Belvoir and STM) have no consensus broker ratings. Coincidentally, two of that trio – STM and Belvoir – boast the best dividend growth over the last five years, with the divis up by 55.6% and 54.4% respectively.
|Company||Ticker||Yield||Forecast yield (1 yr)||Dividend cover (historical)||Forecast dividend cover (1 yr)||Free cash flow dividend cover|
|Central Asia Metals PLC||LON:CAML||5.0%||5.6%||1.2||2.1||1.7|
|First Property Group PLC||LON:FPO||4.9%||5.0%||2.6||2.3||1.6|
|Belvoir Group PLC||LON:BLV||4.5%||3.2%||1.4||2.3||1.8|
|STM Group PLC||LON:STM||3.9%||4.4%||1.9||2.2||1.6|
|Property Franchise Group PLC||LON:TPFG||3.3%||3.8%||1.9||2.2||2.3|
|NWF Group plc||LON:NWF||3.2||3.3||2.9||2.4||4.6|
|Serica Energy Plc||LON:SQZ||3.1%||3.1%||n/a||6.9||1.8|
|Wynnstay Group PLC||LON:WYN||3.1%||3.2%||2.0||2.2||6.0|
|H&T Group Plc||LON:HAT||3.0%||2.7%||3.8||2.6||14.8|