The stock that’s paid 60% of its value in dividends since 2012

Sometimes gems are hiding in plain sight on the market, but don’t overpay …

Despite the near never-ending torrent of doomsday headlines that flood South African news websites daily, there remain some wonderful, well-managed local businesses stuck away on the JSE.

This, despite a long list of challenges it is operating under – a “tough trading environment”, “constrained consumer demand”, “unreliable municipal infrastructure”, “port inefficiencies disrupted supply chains” and of course the perennial favourite “load shedding” .Food producers warn of higher prices as infrastructure crumblesAVI owns Bakers, Willards, Five Roses, Freshpak, Frisco, Koffiehuis, House of Coffees, I&J, Provita, and a number of smaller brands.

It is comfortably converting more than 100% of its earnings before interest, tax, depreciation and amortisation to cash and, remarkably, has paid out an effective 93% of headline earnings to shareholders – in the form of dividends, special dividends and share buybacks – in the last 20 years. Its current dividend yield is 5.6% – hardly shooting the lights out. But this doesn’t account for those special dividends it has paid fairly regularly since its 2013 financial year . At the end of June 2023, with the share price at R68.09, its dividend yield was 7.1%.

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Moneyweb /  🏆 5. in ZA

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