Simon’s weekly wrap: Results are coming in and (some) dividends are back

Results are starting to pour in and they’re a mixed bag with Sibanye-Stillwater* tops so far; it paid R8.5 billion in dividends and slashed debt. Mia Kruger of Kruger International is a fan of the stock but says the share price has not been performing recently, even despite that massive dividend, 10% annualised at the half-year stage. She points out that it is already buying assets in battery technology and continues to make strong cash flows from its operations to fund expansion, future dividends and share buybacks.

A great investment needs both a quality business and excellent management, but it also needs the overall economic conditions to be conducive to it making profits. Both Adcock Ingram and OneLogix published results showing strong businesses, but both need their respective markets to pick up. Adcock Ingram is struggling with no flu season and fewer elective surgeries, while OneLogix needs the economy to start growing to boost profits.

Last year during the harsh reality of the global lockdown, listed companies slashed dividends mostly to zero as they hoarded cash during the uncertainty. But dividends are back, and I spoke with Jane Shoemake of Janus Henderson about her research into dividends so far in 2021. She expects dividend payments to break new records in 2022 with mining setting the pace, as globally banks are mostly preferring to buy back shares due to their low valuations.

Jackson Hole kicks off this afternoon (Friday) as a virtual event, and one that has the investment world watching closely. I spoke with Dr Adrian Saville, investment specialist at Genera Capital and Gibs professor, on what the event is all about and what the expectations are. Back in 2010 then-US Federal Reserve chair Ben Bernanke used the event for a major policy speech on its quantitative easing programme and expectations are that current US Fed chair Jerome Powell will give details on the Fed’s tapering plan in his speech later today.

Also this week:

Clarity is sought on the US Fed’s tapering of quantitative easing and the Delta variant possibly leading to further lockdowns: Petri Redelinghuys – Herenya Capital Advisors.

*The writer holds shares in Sibanye-Stillwater