The Biggest Dividend So Far

Brad Holland

Brad has over 20 years experience in the Australian and US equities and options markets. Brad specialises in equities and options for capital growth, income generation and capital protection. He also specialises in finding opportunities in small to medium cap stocks. Brad holds RG146 - Securities & Managed Investments and Accredited Derivatives Adviser Level 2 qualifications.

August 25, 2022

DRR.AX | High Conviction Report

Last week Deterra Royalties (DRR) released its FY22 financial results that exceeded our expectations. The highlights are:-

  1. Record Ming Area C (MAC) production of 111M Wet Metric Tonnes (WMT)
  2. Record revenue of $265M, up 83% on FY21
  3. $46M in capacity payments
  4. Net Profit After Tax of $178M

The main reason for opening this position was for the dividend, so we were pleasantly surprised when with a dividend of 22.08 cents. The ex-dividend date is 25th August, with a payment on the 21st of September.

Grossing up the dividend yield to consider franking credits, the yield on just this dividend is 7.26% taking our total dividend yield to 14.9%.

With MAC still ramping up to full production of around 150M WMT, even if the iron ore price continues to fall, we believe the dividend yield can be maintained in the future. This is why DRR remains one of the best dividend plays in the resource sector.

Trade Action

No action, continue to hold without a profit target and stop loss

This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.

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