The oil price recovery and strong economic momentum have benefited the materials sector with companies involved in steel, chemicals and mining. Hence an eye toward macroeconomic factors, such as demand for commodities, is necessary when investing in the materials sector. Another key driver of a materials company’s profit is the commodity prices which in turn steers the level of dividend payouts and yield. I’ve identify the following materials stocks paying high income, which may increase the value of your portfolio.
Mineral Resources Limited (ASX:MIN)
MIN has a solid dividend yield of 3.20% and is paying out 50.16% of profits as dividends , with analysts expecting a 50.50% payout in the next three years. Although investors would have seen a few years of reduced payments, it has so far always picked up again, with dividends increasing from $0.095 to $0.66 over the past 10 years. Mineral Resources’s future earnings growth looks strong, with analysts expecting 68.09% EPS growth in the next three years.
Adelaide Brighton Limited (ASX:ABC)
ABC has a nice dividend yield of 3.66% and has a payout ratio of 73.02% , with analysts expecting a 73.44% payout in the next three years. Although investors would have seen a few years of reduced payments, it has so far always picked up again, with dividends increasing from $0.135 to $0.24 over the past 10 years.
Fortescue Metals Group Limited (ASX:FMG)
FMG has an appealing dividend yield of 9.18% and is distributing 51.33% of earnings as dividends , with analysts expecting this ratio to be 61.72% in the next three years. FMG’s 9.18% yield puts it in the top quartile of AU payers. Fortescue Metals Group’s performance over the last 12 months beat the au metals and mining industry, with the company reporting 112.70% EPS growth compared to its industry’s figure of 7.36%.
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.