Overview: G8 Education Limited (GEM) is a childcare center operator providing developmental and educational child care services mainly in Australia. GEM conducts a range of child care service activities, including the acquisition of child care centres, the management of child care centres, industry-related project management, services and consultancy. GEM also operates child care centres, both owned and franchised, in Singapore.
Dividend: G8 Education is paying a 4.5 cents per share fully franked dividend for the quarter ending June 2014. The stock trades ex-dividend on 25 June 2014 with a record date of 27 June. GEM has paid reliable quarterly dividends in the past and announced recently that it has increased its dividend from the equivalent of 14 cents per share per annum to 18 cents per share per annum which is an increase of 28.5%. This equals a quarterly, fully franked dividend of 4.5 cents per share and an annualized yield of 3.81% based on the current market price. The total dividend has consistently increased year after year.
Investment View: Double-digit growth, acquisitions, and the ability to generate future profits are the main drivers for GEM’s growth. The stock is in a medium to long-term uptrend and is up 35.5% year to date. GEM experienced a correction in April and May and appears to be back on track to continue its long-term trend. We are attracted to GEM’s growth potential as well as its consistent above-average yielding dividend.
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