ASX reporting season will start to heat up this week as a number of big-name companies release their full-year FY20 results.
Tomorrow will see annuities provider Challenger Ltd (ASX: CGF) deliver its results, while Wednesday and Thursday promise to be busy with reports expected from companies like SEEK Limited (ASX: SEK), Magellan Financial Group Ltd (ASX: MFG), AMP Limited (ASX: AMP) and Treasury Wine Estates Ltd (ASX: TWE).
Despite the size and stature of the companies mentioned above, stealing the spotlight this week will be the following trio of ASX blue-chip shares:
Commonwealth Bank of Australia (ASX: CBA)
The ASX’s largest company is set to release its full-year results on Wednesday morning and all eyes will be firmly on CBA’s dividend decision. This will be the first time CBA has had to make a call on its dividend since the onset of COVID-19.
CBA’s big four rivals have a financial year ending 30 September, so we already heard from Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) in April and May when they announced their interim dividend decisions.
NAB slashed its interim dividend by 64%, while ANZ and Westpac both ‘deferred’ their dividend decisions to later this year.
While I expect CBA to declare a dividend on Wednesday, it’s unlikely to be anywhere near the $2.31 final dividend seen in both FY18 and FY19. To learn more about CBA’s dividend prospects, check out this article: Will Commonwealth Bank of Australia pay a dividend this year?
Transurban Group (ASX: TCL)
Also reporting on Wednesday is toll road operator Transurban, which saw its traffic volumes plummet as lockdown restrictions were imposed across the country.
Transurban last delivered a trading update on 22 June, highlighting a progressive recovery in traffic volumes in line with easing government restrictions. Although Transurban has released a number of traffic updates throughout the year, it still remains to be seen just how much the pandemic has impacted its bottom line.
Unlike CBA, Transurban’s dividends won’t be in focus on Wednesday. This is because the company already declared a final FY20 distribution of 16 cents per stapled security back in June. This took Transurban’s total FY20 distribution to 47 cents per stapled security, down 20% compared to the distributions paid in 2019.
Telstra Corporation Ltd (ASX: TLS)
Australia’s largest telco is set to release its full-year FY20 results on Thursday. Telstra has been relatively quiet since the onset of the pandemic, with its one and only COVID-19 update delivered in late March.
At the time, Telstra revealed it would be hiring 1,000 temporary contractors to help manage call centre volumes, provide relief to small businesses and consumers through a series of initiatives, and bring forward $500 million of capital expenditure to increase capacity in its network.
Back in March, Telstra also provided an update on its outlook for the full-year, expecting underlying EBITDA to come in at the bottom end of the range of $7.4 billion to $7.9 billion. Management also warned free cash flow after operating lease payments would land at the bottom end of guidance of between $3.3 billion and $3.8 billion.
Telstra’s dividend sustainability will be in the spotlight on Thursday, with a final dividend of 8 cents per share in FY19 (including the nbn special dividend) being the benchmark. Broker Goldman Sachs is expecting Telstra to maintain its 8 cents per share final dividend, while analysts surveyed by Bloomberg are expecting a dividend of around 10 cents per share.
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