Companies in the commercial and professional services sector operate in areas ranging from commercial printing to consulting services. Most of these names such as InvoCare and Navitas suffer from high cyclicality. Therefore, where we are in the economic cycle determines these companies’ level of profitability. This impacts cash flows which in turn determines the level of dividend payout. During times of growth, these companies could provide a strong boost to your portfolio income. If you’re a buy-and-hold investor, these healthy dividend stocks in the services industry can generously contribute to your monthly portfolio income.
InvoCare Limited (ASX:IVC)
IVC has a sizeable dividend yield of 2.69% and their payout ratio stands at 56.88% , with analysts expecting this ratio in three years to be 83.64%. IVC has increased its dividend from $0.215 to $0.44 over the past 10 years. They have been consistent too, not missing a payment during this 10 year period. The company outperformed the global diversified consumer services industry’s earnings growth of 16.71%, reporting an EPS growth of 32.22% over the past 12 months.
Navitas Limited (ASX:NVT)
NVT has a wholesome dividend yield of 3.54% and distributes 88.32% of its earnings to shareholders as dividends . NVT’s DPS have risen to $0.195 from $0.093 over a 10 year period. During this period, the company has not missed a dividend payment – as you would expect from a company increasing their dividend.
Downer EDI Limited (ASX:DOW)
DOW has a good dividend yield of 3.44% and their payout ratio stands at 67.13% . Dividends per share have increased during the past 10 years, but there have been a couple hiccups. However, they have historically always picked up again.
For more solid dividend payers to add to your portfolio, you can use our free platform to explore our interactive list of top dividend payers.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.