Dividend increase South32 Ltd. ADR (SOUHY) – 2019

A dividend increase of the mining company South32 Ltd.

Last week South32 published its FY19 Half year financial results. I dove in to these results and I read something I like, yes…. I saw a dividend increase. 🙂

In this post I give the dividend for South32 Ltd ADR (SOUHY). South32 American Depositary Receipts (ADRs), each represent five fully paid ordinary shares in South32.

South32 Ltd ADR announced an 18.6% increase in its half-year dividend. The dividend is raised from $0.215 to $0.255. The dividend pay date is April 4, 2019 to shareholders of record on March 8, 2019 (ex dividend March 7, 2019).

Besides this normal dividend, South32 Ltd ADR also pays a special dividend. This special dividend ($ 0.085) is lower than last year ($ 0.15).




In 2019 the special dividend and the normal dividend together are lower than these two combined in 2018. So I’m happy with a dividend increase but disappointed with the total amount of dividend. So some mixed feelings over here.


Vrijheid Fonds

The new dividend amount represents an annualized dividend amount of $0.565 per share, up from $0.525 (excl. special dividend). The dividend yield on current price is 4.96%.

My Vrijheid Fonds consist of 12 shares of SOUHY, so in 2019 my passive income will increase by €0.36 ($0.41). No taxes have to be paid for these dividends.

My projected annual total amount from my shares of SOUHY will be €7.21 after taxes.


What to do with my shares of SOUHY

Because of my mixed feelings, I dove a little bit deeper in their report.

I received my shares of SOUHY back in May 2015 when BHP Billiton simplified its portfolio by demerging a group of high quality assets to create an independent 
global metals and mining company, South32. At that time the forward yield was estimated between 3% and 5%. And my selling fees were too high in relation to the total amount. And that’s why I decided to keep these stocks, back in 2015.

If we take a look at today’s market, we see a forward yield of 4.55%. This is higher than the interest on my saving accounts, and is higher than my Vrijheid Fonds average yield. Furthermore in their 2019 Half Year financial results presentation, they have reported a Free Cash Flow of US$718M and a total dividend paid of US$344M. So there is plenty of room for dividend growth. And I’ve also read that underlying earnings per share is up 20%.

This all together made me decide to hang on to these stocks. It seems like a healthy company, with some room for growth. And yes I know that traditional mining companies are a dying breed, but there is still, in my humble opinion, a lot of air left in South32 Ltd. So no worries here for the next couple of years. And who knows, maybe there will be a change of a juicy take-over. 😉

What do you think of South32? Do you own shares of South32, and what are your intentions with this stock? I like to hear from you!



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