Brickworks Announces Latest Increase in Dividend (ASX:BKW)

Back in January 2020, Brickworks Ltd [ASX:BKW] was trading at an all-time high. Then the COVID-19 outbreak occurred and sliced more than 43% from the company’s stock price from January to April.

Recovering well from the fall, the Brickworks share price is now up to trade at $18.73 at the time of writing, on the back of solid financial results for the year.

ASX BKW Share Price Chart 1

Source: Optuma

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What’s happening at BKW?

Brickworks holds a diverse range of investments, which has allowed the company to hold steady, despite the very tough business conditions of 2020. Investments include:

  • Building products in Australia
  • Building products in North America
  • Industrial property
  • Investment in WHSP (Washington H Soul Pattinson)

However, with business conditions deteriorating throughout the year, the company saw:

  • Underlaying EBITDA fall 19% to $281 million
  • Underlaying profit fall 38% to $146 million
  • Statutory profit rise 93% to $299 million

This translates to underlying earnings per share of 98 cents.

The statutory profit was the company’s saving grace of the year. This came about from a significant one-off profit due to the company’s shareholding in WHSP, triggered by the merger of its associate TPG with Vodafone.

All up, this allowed the company to increase its dividend payment by one cent.

The company was able to do this without government support or raising equity. The company is now going into its 44th year of consecutively increasing dividends.

This is a very good result, considering the operating conditions the company has dealt with this year.

Where to from here for the Brickworks share price?

Since the March low, the company’s share price has moved up over 61%, going a long way to clawing back the ground it lost when COVID-19 hit.

Brickworks Share Price Chart

Source: Optuma

The share price is still in an uptrend at this stage. If this can continue, then the levels of $19.30 and $20.75 may come into focus.

With $20.75 being the previous all-time high, it may be hard to crack this level, considering the current business climate.

On the downside, should the price start to fall back, then the levels of $18.50 and $17.70 may be enough to halt a further decline.

Regards

Carl Wittkopp,

For The Rum Rebellion

PS: We will reveal our top five ASX-listed dividend stocks with a great chance of maintaining big payouts during and after the crash. Click here to download your free report.


Carl Wittkopp writes for The Rum Rebellion and has a diploma in Financial Planning. He specialises in the technical analysis of stocks.


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