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Top 3 SA Dividend Stocks

June 17, 2024
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Below I give you, in my opinion, the top 3 dividend stocks listed on the JSE.

You won't find any resource companies even though this is a big sector. My rationale is simple, they don't pay a reliable/predictable dividend. Yes stocks like Thungela and Sasol are paying huge dividends at the moment, but when the cycle turns they will slash their dividends again. Therefore, the 3 companies I list will most likely continue to pay a raising stable future dividend.

1. BTI

British American Tobacco is one of the stalwarts on the JSE, a very large company that generates a ton of cash. BTI has an attractive dividend yield at 6.3%+ and has been paying dividends for years. Moreover, it pays a quarterly dividend which is rare on the JSE. Usually, companies listed on the JSE pay an annual or semi-annual dividend. British American Tobacco is also included in the S&P South Africa Dividend Aristocrat Index i.e. companies with a solid track record of increasing or maintaining their dividends for at least seven consecutive years.

2. EQU

Equites Property Fund is the only specialised logistics REIT listed on the JSE. This is great because, in general, industrial REITs outperform other types of REITs.

https://seekingalpha.com/article/4482761-picking-winner-industrial-reits

https://www.google.com/amp/s/www.businesstimes.com.sg/companies-markets/asian-industrial-reits-to-continue-outperformance-cushman-wakefield%3famp

Equites has a juicy 8.7%+ dividend yield, but what I like most about the company is the fact that they not only maintained their dividend, but increased their dividend in 2020 when virtually no other company did so. This speaks to their superior business model when compared to other REIT companies, especially the office REITs.

3. AFT

The final company on the list is Afrimat. Afrimat is one of the best performing stocks over the last 10 years. This materials company is known for its acquisition track record and its CEO, Andries van Heerden.

Afrimat current yields a respectable 3.6%+ dividend yield, however, the best part of this company is its dividend growth rate. Over the last 12 years, the dividend has 12X'd growing at 23% per annum (see figure/image)! So eventhough the dividend yield might be slightly lower compared to the other two companies, it is bound to grow at a faster pace. Note, Afrimat is also included in the S&P South Africa Dividend Aristocrat Index.

*Disclaimer: The suggestions above are not buy recommendations.
**Disclosure: I own Afrimat.


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