Stanmore Resources (SMR) - Yield on offer
August 2, 2024
Stanmore Resources is an Australian company with operations and exploration projects in the Bowen and Surat basins.
The company is a globally significant metallurgical coal producer with three operating assets: Isaac Plains complex, South Walker Creek (SWC) and Poitrel. Stanmore is also delivering incremental growth at SWC (+1Mt by CY26) and has organic growth options at the recently acquired Eagle Downs asset (transaction expected to close 2HCY24).
Stanmore’s underlying business is achieving strong underlying EBITDA margins (28% in CY24). Free cash flow (FCF) will be lower in CY24 due to one-off impacts, but this should also drive strong FCF yields in CY25 (21%) and CY26 (19%). We also forecast the stock to pay a solid dividend of US$0.11 per share in CY24, representing a circa 5% yield, before increasing in CY25 to US$0.14 per share, for a yield of around 7% yield. This compares favourably to other coal names under our coverage, which offer an average yield of circa 2%.
Insights that count
Discover the best opportunities to outperform the market. Our research team dig deep into the market, company and stock data to bring you insights others might overlook.
ResMed (RMD) – Out of the Matrix
ResMed designs and manufactures medical devices and cloud-based software applications for the sleep apnoea and respiratory care markets.
Orora (ORA) – Bottled up
Orora designs and manufactures aluminium cans and glass bottles, principally for beer, wine and spirits, in Australia, New Zealand, the US and Europe. Orora was incorporated in 1949 and is headquartered in Hawthorn in Melbourne.
Virgin Australia Holdings (VGN) – Keeping it simple
Virgin Australia is the nation’s No.2 airline and offers domestic air services under its own brand and overseas travel via its international partners, which include Qatar Airways, Singapore Airlines, United Airlines, Air Canada, Air New Zealand, Hawaiian Airlines, and All Nippon Airways, and owns the Velocity loyalty business.
.webp)