COVID-19 has dealt a hard blow to many companies by crimping demand and disrupting supply chains.
However, there are still a handful of businesses that continue to defy the odds by growing their earnings.
As an investor, you should relish businesses that can grow over time.
When these businesses perform better, they will have the capacity and capability to pay out more cash as dividends to reward shareholders.
These select businesses that remain resilient and adapt themselves well over time should catch your attention.
If you can find a good, growing business, you stand to reap attractive rewards over time. And as profits and dividends rise, the market will likely reward the company with a higher share price.
You will thus enjoy both capital gains and growing dividend yield.
Here are three companies that are performing well and which may raise their dividend pay-outs.
Riverstone Holdings Limited (SGX: AP4)
Riverstone Holdings Limited is a global market leader in the manufacture of nitrile and rubber gloves for both the healthcare and high-tech manufacturing industries.
Around 85% by volume of the group’s gloves are catered to the healthcare and food sectors, and this segment contributes 69% of total revenue.
Riverstone has demonstrated an impressive track record of growing revenue, from RM 654.9 million in 2016 to RM 989 million in 2019.
The COVID-19 pandemic has greatly boosted demand for nitrile gloves used in hospitals and clinics, resulting in a burgeoning order book for the group.
For the first quarter of the fiscal year 2020, Riverstone reported a year on year increase in revenue of 16.2%, while net profit jumped 54% year on year.
Cash balance was boosted from RM 130.4 million at end-2019 to RM 170.7 million as of 31 March 2020.
The group paid out a total dividend of 7.4 sen for 2019, up from 6.75 sen paid out in 2018.
With rising orders from both existing and new customers, the group looks poised to be able to increase their dividends once again in 2020.
iFAST Corporation Limited (SGX: AIY)
iFAST Corporation Limited runs a wealth management financial technology (fintech) platform.
The group has assets under administration (AUA) of S$9.54 billion as of 31 March 2020 and offers access to over 10,000 investment products including over 7,000 unit trusts and more than 1,300 bonds, stocks and ETFs.
Despite the stomach-churning volatility in the stock market back in March, iFAST has managed to post a 41.5% year on year increase in revenue for the first quarter of 2020.
Profit attributable to shareholders surged by 126.8% year on year to hit S$3.6 million.
Although AUA dipped to S$9.54 billion from S$10 billion at end-2019, the group reported that as of 22 April, it has regained the S$10 billion milestone due to account openings and inflows from customers.
iFAST has a policy of paying quarterly dividends. Last year, it paid out S$0.0075 a quarter for the first three quarters, and S$0.009 for the final quarter, for a total annual dividend of S$0.0315.
With an improved outlook and rising earnings, there is a high chance the group may increase its dividend payments in the near future.
AEM Holdings Ltd (SGX: AWX)
AEM operates in the electronics industry, offering application-specific intelligent system test and handling solutions to semiconductor companies serving the computing, 5G and AI markets.
The group has witnessed increased orders from its main customers for tools, consumables and services.
Recently, AEM released a business update for its first quarter of the fiscal year 2020.
Revenue jumped 178% year on year to S$146.8 million, while net profit more than quadrupled year on year to S$36.1 million from S$6.6 million a year ago.
The acquisition last year of Mu-Test, a French company that provides full test solutions for medium and high-end integrated circuits, enables AEM to offer a full solution to its customers.
The group has charted out its growth plans up till 2021 with a three-prong approach — core account growth, new account growth and new business areas.
Last year, AEM paid out an interim dividend of S$0.02 and a final dividend of S$0.031, for a total annual dividend of S$0.051.
This was a 50% increase from the S$0.034 dividend paid out in 2018.
With a set of stellar first-quarter results and bright prospects ahead for the group, there is a high probability that dividends will be increased for 2020.
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Disclaimer: Royston Yang owns shares in iFAST Corporation Limited.
