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5 Best Dividend-Paying Shares on the JSE

Updated 15 Aug 2022
5 Best Dividend-Paying Shares on the JSE

The 5 Best Dividend-Paying Shares on the JSE revealed. We have carried out extensive research to discover which companies on the JSE currently have the highest dividend pay-outs.

This is a complete guide to the 5 Best Dividend-Paying Shares on the JSE.

In this in-depth guide you’ll learn:

  • Why are dividends important to shareholders?
  • 5 Best Dividend-Paying Shares on the JSE
  • Factors to Consider Before Buying Stocks
  • The Best Share Brokers in South Africa

And lots more…

So, if you’re ready to go “all in” with the 5 Best Dividend-Paying Shares on the JSE…

Let’s dive right in…

Why are dividends important to shareholders?

Dividends are important for investors for a few varied reasons, including that they can significantly boost stock investment profits and they can be used as a supplementary metric in fundamental analysis.

In addition, dividends could lower overall portfolio risk, provide tax advantages, and they can help to preserve the purchasing power of capital.

5 Best Dividend-Paying Shares on the JSE

Foschini Group Limited (JSE: TFG)

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The Foschini Group Ltd. is an expansive conglomerate that owns 29 well-known retail fashion brands in a wide range of areas. TFG Africa sells its products through physical stores across South Africa and other regions of Africa, in addition to its online presence.

Currently, Foschini Group Limited is the 61st most valuable stock on the JSE, with a market value of ZAR 38.5 billion. This amounts to around 0.194% of the JSE’s equity market.

Growth, Valuation, Trading Information
Share Price 118.98 ZAR
Market Capitalization 38.5 billion ZAR
Gross Turnover 41.8 million ZAR
52-Week Range 112.05 – 158.88 ZAR
Shares Outstanding 331 million
Earnings per Share 10.09 ZAR
P/E Ratio 11.54
Dividend per Share 5.00 ZAR
Dividend Yield 4.29%

HomeChoice International Plc (JSE: HIL)

The JSE Ltd. stocks HomeChoice International plc, a holding company. HomeChoice (Retail) and FinChoice (Financial Services) are two of the group’s trade businesses that make it a frontrunner in southern Africa’s retail and financial service industries, respectively (Financial Services).

The Retail division is an omni-channel retailer that sells a variety of items including home textiles, electronics, home appliances, clothing, and footwear via its website, physical stores, and sales agent networks and catalogues.

Personal loans, value-added services, and insurance are just some of the goods and services offered by FinChoice, a full-fledged FinTech company operating entirely in the digital realm.

With a market value of ZAR 2.67 billion (or around 0.013% of the Johannesburg Stock Exchange’s equity market), Homechoice Int plc is the 196th most valuable stock on the JSE currently.

Growth, Valuation, Trading Information
Share Price 24.50 ZAR
Market Capitalization 2.67 billion ZAR
Gross Turnover 14,900 ZAR
52-Week Range 16.85 – 32.00 ZAR
Shares Outstanding 107 million
Earnings per Share 2.03 ZAR
P/E Ratio 12.29
Dividend per Share 0.67 ZAR
Dividend Yield 2.68%

Oceana Group Ltd (JSE: OCE)

Oceana Group is the biggest fishing firm in Africa and a significant player in both the Namibian and American fishing sectors. It was founded in 1918 and is publicly traded on the Johannesburg (JSE) and Namibian (NSX) stock markets.

Lucky Star, Daybrook Fisheries, and Blue Continent Products are the three primary divisions under which Oceana carries out its fishing and producing operations.

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CCS Logistics, the fourth division, operates cold storage warehouses in three different African countries namely South Africa, Namibia, and Angola.

The current market capitalization of ZAR 6.52 billion for Oceana Group Ltd places it as the 140th most valuable stock on the JSE, or around 0.033% of the equity market on the Johannesburg Stock Exchange.

Growth, Valuation, Trading Information
Share Price 50.30 ZAR
Market Capitalization 6.52 billion ZAR
Gross Turnover 2.24 million ZAR
52-Week Range 43.00 – 71.22 ZAR
Shares Outstanding 130 million
Earnings per Share 4.15 ZAR
P/E Ratio 12.02
Dividend per Share 3.03 ZAR
Dividend Yield 6.06%

The Spar Group Ltd (JSE: SPP)

The SPAR corporation is a distributor and wholesaler for SPAR supermarkets, Build-It retail locations selling construction supplies, and TOPS at SPAR retail establishments selling alcoholic beverages.

Distributing products and services to SPAR shops, Build-It builders’ merchandise stores, TOPS @ SPAR liquor stores, and other locations in South Africa is the primary function of Spar Group Ltd.

With a market value of ZAR 26.2 billion or around 0.132% of the JSE equity market, The Spar Group Ltd is the 78th most valuable stock currently.

Growth, Valuation, Trading Information
Share Price 138.15 ZAR
Market Capitalization 26.2 billion ZAR
Gross Turnover 24.9 million
52-Week Range 129.09 – 208.84 ZAR
Shares Outstanding 193 million
Earnings per Share 12.1 ZAR
P/E Ratio 11.19
Dividend per Share 7.11 ZAR
Dividend Yield 5.22%

Truworths International Ltd (JSE: TRU)

Investment holding and management firm Truworths International Ltd. (the company) trades on the JSE and the Namibian Stock Exchange.

Truworths Ltd. and Office Holdings Ltd., its two primary operating companies, are involved in the cash and account retailing of women’s and men’s fashion apparel, footwear, and accessories.

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Currently trading at ZAR 19.7 billion, or around 0.099% of the equity market, Truworths Int Ltd is the 93rd most valuable stock on the JSE.

Growth, Valuation, Trading Information
Share Price 51.42 ZAR
Market Capitalization 19.7 billion ZAR
Gross Turnover 74.8 million ZAR
52-Week Range 45.86 – 68.09 ZAR
Shares Outstanding 409 million
Earnings per Share 6.29 ZAR
P/E Ratio 7.64
Dividend per Share 4.18 ZAR
Dividend Yield 8.68%

Factors to Consider Before Buying Stocks

When purchasing a stock for investment reasons, it is crucial to complete your research since you are investing your own money. Especially when purchasing a stock for the long term, you should focus on obtaining a decent value.

Before investing in a firm, you should do extensive research, evaluate the stock’s fundamentals, and determine whether the stock is a good match for your portfolio.

You are not only purchasing stock but also becoming a stakeholder of that firm; thus, as an investor, you must do the appropriate analysis.

Before purchasing a company’s stock and spending your hard-earned cash, you should consider the following 10 reasons.

Your Investment Horizon

Determining the time horizon is the first step before investing in stocks since it has a significant impact on the final decision. Your investment horizon might be short, medium, or long-term depending on your needs and objectives.

  • Any investment you intend to hold for less than a year is considered short-term. Investing in steady blue-chip firms that pay dividends is recommended if you expect to keep the stock for less than a year. It is safer to invest in these businesses because of their strong financial positions.
  • Investments held for one to ten years fall under the category of “medium term.” High-quality companies from developing economies, with an appropriate amount of risk, are ideal for medium- to long-term investments.
  • Investments held for more than ten years are considered long-term investments. When anything goes wrong with these assets, there is still time for them to rebound and provide a substantial return.

The investment strategy that you wish to follow

Researching and settling on an appropriate investment strategy before making a stock purchase is essential. Most successful investors use the following three sorts of strategies:

  • To generate profits, value investors seek companies that are trading at a discount to their intrinsic worth. This is how Warren Buffett generates such massive returns on investment.
  • Investing in companies that show revenue and profit growth at a faster rate than the market is known as growth investing. Growth investors wager that the equities’ recent gains will continue, providing a profitable buying opportunity.
  • Lastly, income investors should seek high-quality firms with generous dividend pay-outs. Earnings potential may be increased via either spending or reinvesting the money received as dividends. Therefore, before making a stock purchase, it is essential to think about the strategy that works well with that approach.

Fundamentals of the company

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Before making a purchase, investors should look at the company’s fundamentals.

Warren Buffett and other well-known investors have amassed huge fortunes by analysing the discrepancy between the stock market price and the true worth of a company’s shares. He believes that a cheap stock would eventually rise to its true worth.

When looking to purchase stock, some of the most relevant ratios to examine are:

  • P/E Ratio (Price/Earnings Ratio) It is a comparison between the share price and the company’s profits per share (EPS).
  • When calculating a company’s level of debt, the debt-to-equity ratio is a useful tool. When debt levels are too high, it often means a company is on the verge of collapse.
  • The price per share is divided by the company’s net worth of assets per share to arrive at the price per book value ratio.

Overall Stock Performance vs Peers

In addition to several other metrics, South African investors must compare a company’s performance to that of its peers within a sector or industry.

Overall Shareholder Patterns

Before purchasing a stock, investors should examine the distribution of voting rights. An organization’s promoters are responsible for most of the company’s decisions.

They are high-ranking executives or own a massive portion of the business. Therefore, investors should put their money into enterprises with a lot of support from the business’ founders, as well as a lot of support from domestic and international institutions.

Company Size

How much you are willing to spend on the line when purchasing a stock is related to the size of the firm, you are thinking about putting your money into.

Thus, before purchasing shares, you should evaluate the size of the firm according to your risk appetite and investment horizon, and this can be determined by considering the market capitalization.

Revenue Growth

Investors should prioritize expanding firms when making stock purchases, and investors can find this out by looking at the company’s income and profits.

best dividend stocks JSE

Overall Volatility

High-volatility stocks tend to surge during optimistic days and plummet on negative ones. When an upswing starts to reverse, you could cash in your gains on a low-volatility stock before they are lost forever.

Fast-moving equities, on the other hand, do not offer you much time to get out of the market before a trend shifts and you lose money.

Dividend Payment History

Companies that are considered dividend stocks often distribute a portion of their earnings to shareholders every year. These dividend stocks are a good option for those who follow the income investing method.

An investor who wants to make money from their investments should investigate the company’s dividend record of accomplishment before making a purchase. Investors seeking a high rate of return on their capital may consider the dividend yield as a proportion of the stock price.

Mutual Funds Holding

It is widely accepted that a stock which is owned by many mutual funds is safer than a stock which is held by no mutual funds.

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Conclusion

Always look for the greatest firms to invest in before adding their shares to your portfolio. You may use stock screeners to narrow down your investment or trading options to just the businesses that satisfy your specific criteria.

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