Investors with a long-term perspective who put their money into dividend-paying companies reap many benefits. One reason is that defensive industries, like those in which many dividend-paying corporations are based, are better able to weather economic storms.
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Second, organisations that have a track record of dividend payments to their investors are likely to be well-established, growing enterprises. A dividend is a distribution of a portion of a company's earnings to a subset of its stockholders on a regular basis.
Dividends can be delivered in the form of cash, stock, or other assets. The South African investor, however, should keep in mind that not all stocks pay dividends.
Lastly, dividend-paying equities offer a twofold chance of financial reward. In case the stock price rises, and if the company also pays dividends.
Typically, dividends are paid out four times a year. Thus, retirees and those getting close to retirement age often choose to supplement their income with dividend stocks. We have listed the 5 best dividend-paying companies which can be found on the Johannesburg Stock Exchange (JSE).
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Kumba Iron Ore Ltd (JSE: KIO)
Kumba is a multinational mining company that focuses on the iron ore industry, including the exploration, mining, processing, marketing, and transportation of the mineral.
Iron ore is produced by Kumba in its mines in Sishen and Kolomela, both of which are located in the Northern Cape region of South Africa.
The Sishen mine in the Northern Cape is Kumba's crown jewel; it produced 70% of the company's total output (31.4Mt) in 2015. Kolomela mine, the company's newest venture, is also located in the Northern Cape and produces about 12Mt of iron ore annually.
The company's other asset is the Thabazimbi mine in Limpopo, which has a yearly production rate of about 1Mt. In 2015, domestic sales were 4.3Mt while export sales reached 43.5Mt.
A majority (73.9%) of Kumba's operating assets are owned by Sishen Iron Ore Company (SIOC), in which Kumba has a stake. Over 11,000 people are employed by the company, and their wares are shipped all over the world, including to South Africa, China, India, Japan, South Korea, Europe, and the Middle East.
Kumba Iron Ore Ltd. is in the business of discovering new iron ore deposits, mining such deposits, mixing the mined ore with other components, and then selling the resulting product to steel makers located all over the world.
The company is now ranked 25th on the JSE with a market value of ZAR 119 billion. It also accounts for around 0.65% of the stock market on the Johannesburg Stock Exchange, which is where it is listed.
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Exxaro Resources Ltd (JSE: EXX)
Exxaro is a prominent South African diversified resources company with interests in the coal, TiO2 and ferrous industries, as well as the energy sector. It is a publicly traded company that was founded in South Africa and is currently traded on the JSE.
One of the most diversified resource firms in South Africa, Exxaro Resources also has facilities and offices in other African countries, as well as in Europe, the United States, Asia, and Australia.
The majority of the company's efforts are directed toward the mining of coal and other heavy minerals, however it also has significant holdings in the chemical, ferrous, and energy sectors. As of 2006, the company's current incarnation has been in operation for some time, following an earlier period of innovation and expansion.
The company has been included in the JSE Top 40 Index and the JSE Socially Responsible Investment index on a consistent basis. Coal mining requires a substantial investment of capital. The Grootgeluk mine, one of the world's most efficient mining operations, is just one of the six coal mines managed by Exxaro (mostly in the Mpumalanga and Limpopo provinces).
Exxaro Resources Ltd is one of the most diversified resource firms in South Africa, and it currently conducts business not only in South Africa but also in Europe, the Republic of the Congo, and the United States.
Exxaro Resources Ltd is now the 42nd most valuable stock on the Johannesburg Stock Exchange, with a market capitalization of ZAR 69.5 billion, which corresponds to around 0.379% of the whole equity market.
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Impala Platinum Holdings Ltd (JSE: IMP)
The production and distribution of platinum group metals (PGMs) to developed countries is the core emphasis of Impala Platinum Holdings Ltd.
The metals platinum, palladium, and rhodium are collectively referred to as the platinum group metals. Impala Platinum Holdings Ltd. is one of the most important manufacturers of these elements on a global scale.
Impala Platinum Holdings Ltd is the 20th most valuable stock on the Johannesburg Stock Exchange. The company has a market capitalization of ZAR 149 billion, which corresponds to approximately 0.813% of the equity market.
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Anglo-American Platinum Limited (JSE: AMS)
It is safe to say that Anglo American Platinum Ltd. is the most significant primary producer of platinum group metals in the entire world. The Anglo-American plc Group includes it as a member as well as a subsidiary of the Anglo-American plc company.
Anglo American Platinum Limited is the holding company for a collection of companies that are responsible for running active platinum mines.
The Group is active in the mining and manufacturing of other metals of the platinum group in addition to platinum. These metals include palladium, rhodium, iridium, ruthenium, osmium, nickel, copper, and cobalt.
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British American Tobacco Plc (JSE: BTI)
British American Tobacco PLC is a holding company for companies that develop, sell, and distribute cigarettes and other tobacco products such as cigars and roll-your-own tobacco.
These companies are subsidiaries of British American Tobacco PLC. Additionally, the corporation is in the business of manufacturing cigarettes and other tobacco-related items.
British American Tobacco Plc is now the fourth most valuable corporation listed on the JSE, with a market value of around 1.51 trillion South African Rand. On the Johannesburg Stock Exchange, this amounts to around 8.21% of the market for publicly traded shares.
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