Dicker Data share price up on special dividend & potential dividend hike

Dicker Data Ltd (ASX: DDR) made a profit on its Kurnell business.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Dicker Data Ltd (ASX: DDR) share price is marginally higher at $7.48 today and up nearly 150 per cent over just the past year as it continues to grow profits at strong rates.

As a leading IT hardware distributor to businesses all over Australia it needs a lot of warehouse space for storage and is building a new 29,000 sqm operating facility in Sydney's Kurnell at a cost around $55 million. Its due for completion within a couple of years. 

In order to facilitate the move it recently sold and leased back its existing Kurnell facility for $36 million and made a $12 million profit on the deal.

As a result the company believes it's in a financially strong enough position to pay out the $12 million profit to shareholders in the form of a 5 cents per share special dividend.

The company's founder and major shareholder David Dicker has long had a policy of paying out all profits in dividends to shareholders. 

It reports on a calendar year basis and will have paid out 22 cents per share to shareholders by the time of the October 4 special dividend payment with at least another 5 cents per share to be paid in December 2019 as part of its quarterly dividend program.

For the six months to June 30 2019 it grew profit before tax 51% to $32.3 million and is tracking well ahead of its forecast for full year profit before tax of $51.4 million. 

Therefore it's possible the final interim dividend due in December will be ahead of the expected 5 cents per share.

It's also possible the group will upgrade its calendar 2019 profit guidance after the September quarter given how far it tracked ahead of forecasts over the first half.

Over the longer term the investment in a new operating centre suggests management sees room for growth.

Given the COO has recently been snapping up more shares, while the founder and his partner are not selling any shares the insider activity suggests confidence in the future. 

Share market investing is fraught with risk so if you can find a founder-led business with a long track record of growth and heavy insider ownership that reduces a lot of the risk around alignment. 

Another well aligned dividend pick to report today is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). The investment conglomerate has now lifted its interim and final dividend every time since the year 2000 and right through the GFC.

You cannot argue with that and it's a defensive business that could be worth a look for dividend seekers. 

Should you invest $1,000 in Pointerra Limited right now?

Before you buy Pointerra Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Pointerra Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tom Richardson owns shares of Dicker Data Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy finish to the week for ASX shares this Friday.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.
Share Market News

ASX shares in April: 8 key takeaways according to Macquarie

Here are eight key takeaways from April, according to a new note from the broker.

Read more »

Woman looking at a phone with stock market bars in the background.
Share Market News

Market outlook: Should I 'sell in May and go away'?

May is the time to sell... If you believe in fairytales.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX All Ords stocks rocketing higher this week

Investors sent these five ASX All Ords stocks soaring this week. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Block, Corporate Travel Management, Judo, and Zip shares are sinking today

These shares are missing out on the good times on Friday. But why?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Boss Energy, Capstone, Dimerix, and Platinum shares are storming higher today

These shares are having a good finish to the week. Let's find out why.

Read more »

A shocked man holding some documents in the living room.
Broker Notes

Macquarie's take on Judo Capital shares after suddenly falling 19% yesterday?

Judo Bank was the ASX's top-performing banking stock in 2024.

Read more »