Financial service companies’ profitability tends to be tied to the economic cycle. These companies provide services ranging from consumer finance to investment banking. During downturns, financial services companies tend to be hit the hardest as net interest margins shrink and credit losses grows. However, during prosperous times, they report robust profits and many pay attractive dividends. I’ve identify the following financial stocks paying high income, which may increase the value of your portfolio.
CVC Limited (ASX:CVC)
CVC has a substantial dividend yield of 6.40% and has a payout ratio of 69.64% . Although there has been some volatility in the company’s dividend yield, the DPS over a 10 year period has increased from $0.15 to $0.16. CVC’s earnings per share growth of 126.59% outpaced the au capital markets industry’s 3.16% average growth rate over the last year.
Australian Finance Group Limited (ASX:AFG)
AFG has a large dividend yield of 5.92% and their payout ratio stands at 53.36% , with analysts expecting the payout in three years to be 77.07%. AFG’s 5.92% yield puts it in the top quartile of AU payers.
Mirrabooka Investments Limited (ASX:MIR)
MIR has a enticing dividend yield of 5.34% with a high payout ratio . MIR’s last dividend payment was $0.14, up from it’s payment 10 years ago of $0.1. During this period, the company has not missed a dividend payment – as you would expect from a company increasing their dividend. MIR has no debt, which is a strong sign of it’s ability to manage.
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.