Why the Data#3 (ASX:DTL) share price is shooting 9% higher today

The Data#3 Limited (ASX:DTL) share price is shooting higher on Monday after releasing its guidance for the first half of FY 2021…

| More on:

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 Data#3 Limited (ASX: DTL) share price has started the week in fine form.

At one stage today the business technology solutions company's shares were up as much as 9.5% to $5.76.

They have since dropped back a touch but are still up 5% to $5.52 at the time of writing.

This latest gain means the Data#3 share price is now up a sizeable 37% since this time last year.

Why is the Data#3 share price storming higher today?

Investors have been buying the company's shares on Monday following the release of an update on its guidance for the first half of FY 2021.

When the company held its annual general meeting in November, it advised that it was expecting a largely flat half year result.

Management explained: "We have navigated our way through the extreme market volatility and made a solid start to FY21. [..] At this stage we do not envisage the first half result to be materially different to our substantial first half FY20 performance."

However, it appears as though December was a much stronger month than anticipated.

This morning the company advised that it now expects to deliver a profit result ahead of the same period last year.

According to the release, it expects to report a first half profit before tax in the region of $13.7 million. This will be an 8% increase on the record half year profit it achieved in the prior corresponding period of $12.7 million.

What about its dividend?

Management advised that it plans to announce its audited results and interim dividend on 18 February 2021 and that the Data#3 board intends to maintain the usual dividend practice.

Last year this meant a 90% payout ratio. Which, if it maintains this and increases its dividend in line with its profits, will mean a full franked 5.5 cents per share interim dividend.

Combined with its final dividend of 8.8 cents per share from FY 2020, this will mean a twelve-month trailing dividend of 14.3 cents per share. Based on the current Data#3 share price, this equates to a fully franked 2.6% dividend yield.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

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

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Why Capricorn Metals, Insignia, Perseus Mining, and Qoria shares are storming higher

These shares are having a strong session on Tuesday. But why?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Amaero, AMP, Block, and South32 shares are racing higher today

These shares are starting the week on a positive note. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another momentous session for ASX shares this Friday.

Read more »

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

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »