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Date : 23/08/2021

Top 2 High Performing Dividend Stocks Of The Week

After a rough week for the ASX where the ASX 200 index dipped, the ASX 200 came back strong today – adding 29 points or 0.39% and closing on 7489.9 points. The Technology and Materials sector were the best performers today and the Pilbara Minerals, Appen, and Nearmap leading the pack in the best performers. NIB Holdings, Redbubble, and G8 Education were the losers today.

Top 2 Dividend Stocks To Consider This Week

Earnings season has been extremely positive so far and dividends have been the biggest story as several companies have announced massive increase in dividend payouts on the back of solid FY21 performances. However, with growth now peeking, it is becoming hard to pick the best dividend stocks to add to investor portfolios.

Our list of top ASX Income Shares to consider this week

Telstra Corp (ASX: TLS)

Telstra share price fortunes have changed dramatically over the past few months. TLS stock price has gone from strength to strength and on the back of a stunning FY21 earnings report, the TLS share price now trades at $3.99 a share – a 52-week high for the firm.

For FY21, on a reported basis Total Income decreased 11.6 per cent for the year to $23.1 billion. NPAT increased 3.4% to $1.9 billion. Reported EBITDA decreased 14.2% to $7.6 billion. After adjusting for lease accounting on a like-for-like basis, EBITDA decreased 11.5% to $7.4 billion. On a guidance basis Underlying EBITDA decreased 9.7% to $6.7 billion. Underlying EBITDA includes an in-year NBN headwind of around $650 million and an estimated $380 million financial impact from COVID. The firm announced in its earnings report that it would return approximately 50 percent, or up to $1.35 billion, of net proceeds from its InfraCo Towers transaction to shareholders during FY22 via an on-market share buy-back. In addition to the buybacks, shareholders will receive a fully-franked final dividend of 8 cents per share, including an ordinary dividend of 5 cents, and a special dividend of 3 cents. This brings the total dividend for the year to 16 cents per share, returning approximately $1.9 billion to shareholders. TLS is now once again on the top of the list for the best dividend stocks on the ASX.

Commonwealth Bank of Australia (ASX: CBA)

One in two Aussies use CommBank for their banking needs and it is the biggest bank in Australia. CommBank comes roaring back from the depths of the pandemic. So much so that the bank’s earnings beat consensus estimates, resulting in the share price setting another record high of $108.03 a share a few days ago. Following last week’s volatility, CBA shares are now back at $100 a share and given the dividends and share buyback on offer, it looks to be a great consideration.

In today’s earnings release, the financial results for FY21 reflect the strength of the business and the disciplined execution of their strategy. At the top line, CommBank has seen volume growth across all three of their business segments – Business lending by $11b, Home lending by $31 billion, and Household Deposits by $31 billion. This top line metric has resulted in the return of profitability after a troubling FY20. Net profit after tax (NPAT) increased due to improved economic conditions and outlook resulting in a lower loan impairment expense and a strong operational performance. Commonwealth Bank reported that it generated $8.65 billion of cash net profit after tax, up 19.8% on FY20. Statutory net profit jumped 19.7% to $8.84 billion. Operating income rose 1.7% to $24.16 billion, whilst operating expenses increased 3.3% to $11.36 billion. The full year dividend was supported by the Bank’s strong capital position. The final dividend is $2.00 per share, fully franked. That brings the total FY21 dividend per share to $3.50, an increase of 17% on FY20. The bank announced a $6 billion off-market share buy-back. Again, the strong capital position and progress on its strategy means it’s well placed to support customers and manage ongoing uncertainties, while also returning a portion of excess capital. CBA shares are now definitely worth considering for income investors given the positives it brings.

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