One of my favourite dividend shares has just announced it is forecasting growing dividends to March 2022.

That business is Duxton Water Ltd (ASX: D2O). It’s a unique company that’s building a portfolio of water entitlements across the southern Murray Darling Basin. It then leases that water to farmers, through long-term leases and both spot and forward contract allocation sales.

The Duxton Water share price is up over 1% in response to the news this morning.

Today, it announced the execution of a new water lease arrangement starting 1 July 2020. This will take the leased portion of the permanent water portfolio to 66%, generating $9.5 million of annualised leasing revenue from 1 July 2020.

Duxton Water has a weighted average lease expiry (WALE) of 2.9 years with 5.2 years inclusive of renewal options. This WALE provides a lot of medium-term certainty for the dividend share.

Duxton Water’s dividend share credentials

The Board of the company doesn’t foresee any significant impacts from the coronavirus. Firstly, the company has reaffirmed the intention to pay a 2.9 per share fully franked dividend in September. Then a fully franked 3 cent dividend in March 2021.

Today, thanks to the forward visibility of lease revenue, Duxton Water announced a dividend target of 3.1 cents to be paid in September 2021 and a further target of 3.2 cents to be paid in March 2022. That’s two years of dividends pencilled in. Great news for people looking for a reliable dividend share.

At the current Duxton Water share price the next 12 months of dividends amounts to a grossed-up dividend yield of 6.4%. The dividends in the subsequent 12 months amounts to a grossed-up dividend yield of 6.75%.

Is the Duxton Water share price a buy?

Duxton Water has increased its dividend every six months since November 2017. I think it could be one of the best dividend shares on the ASX over the next two years. Many others are cutting their dividends. It’s currently trading at a discount of around 20% to its pre-tax NTA and a 28% discount to the post-tax NTA. I’d be happy to buy a few shares today. 

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Motley Fool contributor Tristan Harrison owns shares of DUXTON FPO. The Motley Fool Australia has recommended DUXTON FPO. 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.

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The COVID-19 pandemic may have forced many retailers to close their doors forever. Despite the doom and gloom, I believe it is still possible for investors to find long-term value in the Australian retail sector.

Here’s why Premier Investments Limited (ASX: PMV) could be the best retail share listed on the ASX.  

How has Premier Investments performed?

As the owner of prominent retail brands such as Smiggle, Peter Alexander and Just Jeans, Premier Investments has suffered the same fate as most retailers in Australia. The company recently released an update informing the market that sales had plunged 74% for the 6 weeks to 6 May 2020, with overseas sales tanking 99% in the same period.

In response to the pandemic, the Premier Investments share price had dropped more than 56% year-to-date by late March. Despite the sharp fall, the company’s share price has recovered more than 87% from its low in March and is poised to continue as the Australian economy looks to restart.  

Billionaire owner taking fight to landlords

Billionaire Solomon Lew is the chairman of Premier Investments and has built his fortune working in the retail business over the past 50 years. Drawing on his wealth of experience, Mr. Lew has made it clear to commercial landlords that stores under Premier Investments will only pay rent in arrears based on a proportion of gross sales when they reopen.

In an article in The Australian, Mr. Lew stated that Premier Investments intends to do everything possible in order to get people back to work. The company was forced to stand down 9,000 employees last month as governments imposed restrictions to curb the pandemic.

What is the outlook for Premier Investments?

Despite the fall in sales, Premier Investments saw online sales surge more than 99% for the 6 weeks to 6 May 2020. The increase in e-commerce reflects the change the pandemic has had on consumer behaviour. Although Premier Investments’ stores are largely brick and mortar stores, 70% of the company’s leases in Australia and New Zealand expire in the near future.

As a result, Premier Investments has the luxury of adjusting its online and physical store mix. The company has also reassured shareholders of its strong balance sheet that has Premier Investments well placed to begin a recovery.

Foolish takeaway

In my opinion, Premier Investments is possibly the best retail share listed on the ASX. The company boasts a strong portfolio of competitive global brands and has the cash to capitalise on future opportunities.

In addition to its size, the company also boasts the flexibility to adapt to changing consumer behaviour and e-commerce facilities. Premier Investments also has an experienced board that gives the company the luxury of experience that not many ASX retail shares have.

As the Australian economy restarts, it is far from going back to business as usual. Now may not be the time to invest in retail, however, I believe it would be prudent to keep Premier Investments on your watchlist for the future.

More reading

• Top brokers name 3 ASX 200 shares to buy right now
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• ASX 200 drops over 1% at the market close
• Why CSR, Kogan, Premier Investments, & ResMed shares are storming higher
• Premier Investments share price higher after announcing store reopenings and online sales surge

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments 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.

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The S&P/ASX 200 Index (ASX: XJO) may be sinking lower today, but that hasn’t stopped the Breville Group Ltd (ASX: BRG) share price from rocketing higher.

In morning trade the appliance maker’s shares have returned from their trading halt and jumped 10% higher to $20.54.

Why was the Breville share price in a trading halt?

Breville requested a trading halt on Wednesday while it undertook a $104 million equity raising.

This morning the company revealed that it has successfully completed the underwritten institutional placement component of the equity raising.

Breville has raised $94 million through the issue of approximately 5.5 million new shares to institutional investors for $17.00 per new share. This represents a discount of 9.1% to its last close price.

It will now push ahead with its share purchase plan which aims to raise a further $10 million.

The proceeds will be used to enhance Breville’s financial flexibility to continue to invest in the execution of its growth agenda while maintaining a strong financial position.

Why is the Breville share price rocketing higher?

Equity raisings rarely send share prices hurtling higher, so readers may be curious about today’s gains.

Investors have been buying the company’s shares after it released a trading update with its equity raising announcement.

According to the release, Breville has been performing very strongly during the second half of FY 2020, despite the pandemic and store closures.

Between January 1 and April 30, Breville’s revenue was up 32% on the prior corresponding period. Sales grew 25% in March and 21% in April.

Management commented: “At a segment level, Global Product has delivered 32% revenue growth, or 24% in constant currency terms, from 1 January to 30 April 2020.”

“In constant currency terms, March delivered 14% growth which strengthened to 18% in April. This is despite retailers in key regions closing stores during government mandated lockdowns. Sell-through exceeded sell-in growth in all key regions, as demand remained strong and retailers ran down their inventory,” it added.

Despite its sales growing strongly, the company has been quick to manage its cashflows and reduce cash expenses to minimum levels.

These cost savings are designed to temporarily reduce salary costs but protect capability, temporarily reduce marketing and increase its return on investment, while ensuring that its product development continues.

Pleasingly, the pandemic doesn’t look likely to stifle its expansion plans. Management revealed that it is in advanced planning for the entry into further international markets in FY 2021. The funds raised today are expected to support this growth plan.

More reading

• Why Breville, Graincorp, Mesoblast, & Newcrest shares are charging higher
• Should you cash out of this ASX 200 rally?
• David Tepper believes we’re in the biggest stock bubble since 1999
• 5 things to watch on the ASX 200 on Thursday
• The latest ASX shares upgraded by brokers to “buy”

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. 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.

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