With ASX reaching new highs and actions becoming more and more expensive every day, it's a good time to think about whether companies that pay dividends that can be counted on to have revenue have solid profit bases that can withstand even the good times like the bad (and even the bad).
I believe that in these times the price is as important a consideration as the quality of the company, because, as Warren Buffett says, "it is only when the tide goes out that you learn who swam naked".
Here are two stocks that pay ASX dividends which I think will still be reasonably dressed if and when the tide changes.
Ramsay Health Care Limited (ASX: RHC)
I think Ramsay is both a wonderful company and a quality defensive escort – after all, we don't stop getting sick and we still need the strange hospital stay when times get tough. The actions of the health sector like Ramsay are in a sector with favorable perpetual winds, and getting a certain exposure in the portfolio would be a good move (in my opinion).
Ramsay owns or operates more than 220 quality private hospitals throughout Australia, with a significant and growing presence also in Europe and Asia. The company has also increased its dividend every year since 2000, making RHC a share of quality income as well. Ramsay is producing a 2.02% dividend on current prices and an increase in the near future can reasonably be expected.
Coles remains attractive as a defensive income stock due to its network of supermarkets across the country providing food and basic necessities at very low prices, which I don't expect a recession to dampen the demand. Coles also impressed me with his plans to reduce costs and implement supply chain automation in the coming years, which should help the company avoid competition and maintain a high payout ratio.
Speaking of payments, Coles still has to pay his first dividend, but the company has declared that it intends to pay between 80% and 90% of future profits, which means that we are evaluating a dividend yield around the level of the 4-5% (which should also be completely franked).
With listed shares where they are, it may not be possible to make an entry position in these two companies with a decent discount. However, both still offer an irresistible income stream that should be safe (at least in my opinion) from the turbulence of difficult economic times.
These actions would also be a great place to look for solid gains and strong dividends!
Our first 3 Blue Chip Shares for 2019 – NOW AVAILABLE!
You're invited! For a limited time, The Motley Fool Australia is giving away a new urgent investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.
So, if you like reliable, stable and high-performance companies that pay fat and totally exempted dividends, we'll cover you!
The # 1 is a dear old Australian company that turns its attention to high-margin companies … and quickly returns liquidity to shareholders with its heavy dividend …
While Stock # 2 is an online power that is rapidly gaining market share worldwide … ready for years (or even decades) of tremendous growth …
Even better, Stock # 3 offers a huge 6.5% dividend! That beats the rates of term deposits directly out of the water – and also offers the potential for capital gains.
You can discover all three shares within our new report now. To collect your FREE copy, simply click on the link below right now. But you'll want to hurry up: this free report is available ONLY FOR A LIMITED TIME!
Simply CLICK HERE FOR YOUR FREE REPORT!
Motley Fool collaborator Sebastian Bowen has no position in any of the stocks mentioned. Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all have the same opinions, but we are all convinced that, considering a wide range of insights, we have become better investors. The Motley Fool has a disclosure policy. This article contains only general investment recommendations (with AFSL 400691). Authorized by Scott Phillips.
. (tagToTranslate) ramsay limited health care fully paid ord. shrs (t) asx: rhc (t) warren buffett (t) ramsay health stock price (t) ramsay health stock price (t) share price rc (t) ramsay health dividend (t) group coles ltd (t) asx: price action of the group col (t) coles (t) price action group coles (t) price action (t) dividing group coles (t) s & p / asx 200 (t) index: ^ axjo (t) indexasx: xjo (t) asx: xjo (t) crash (t) dividend shares (t) asx dividend shares (t) income (t) recession (t) downside protection (t) asx (t) investing (t) shares (t ) sharemarket (t) blue chip (t) portfolio (t) dividend (t) shares 2019 (t) if you buy (t) high yield (t) low cost shares (t) buy (t) hold (t) sell (t) s & p / asx 200 (t) trend (t) investment by income