“Just like mortgage rates, there’s a bit of a lag for people who were locked in a term deposit.
“They may well be getting 4.0%, 4.5% or even 5.0% but at some point that will expire,” he said.
Faced with lower rates, investors may need to look elsewhere to make their money work harder.
“That will absolutely bring some of those stocks into focus again, especially if you combine it with an economic recovery, which should put the market overall on a sounder footing,” Lister said.
The local market is known for its high proportion of dividend-paying stocks, but less so now with growth stocks such as Fisher & Paykel Healthcare forming such a big part of the S&P/NZX 50 market (16%).
“But you don’t have to look too far to find some dividend stocks, whether it’s the electricity companies or the listed property stocks.
“It’s always dangerous to buy on dividend alone, but a lot of those businesses are really good businesses, and they should have a much brighter 2026 if the economy is in better shape.”
Looking further afield, globally it’s been all about artificial intelligence (AI) and the big tech stocks.
“I am still a believer in that theme, but your boring old dividend stocks, your cash cows, have sort of gone a little bit unnoticed, internationally,” Lister said.
“So I think that theme probably makes a bit of sense everywhere, but particularly here in New Zealand, where you get the imputation credits and you have the listed property trusts that are all PIEs [portfolio investment entities], which makes them extremely tax-efficient.”
But Lister says the property sector could find itself in the firing line if next year’s election returns a Labour-led Government, given the party’s stated intention to introduce a capital gains tax.
All up, he says investors need to look at dividend yield in conjunction with a company’s growth potential, balance sheet strength, competitive position and the quality of its management team.
A return to dividend yield is shaping up to be a theme in overseas markets.
“If things really go pear-shaped in the [United] States, as I’m pretty sure they will at some point, people will come looking for the dividend stocks as they tend to be more resilient, safe and steady.”
Lister added that if the Reserve Bank opts to cut even further, the dividend yield stocks (see list below) will start to look even better.
Sky TV performs
Forsyth Barr, in a research note, said Sky TV (SKT) had performed well over the past year and had the potential to lift its dividend.
“We believe Sky TV has a path to grow its dividend from 30cps in FY26 to 40cps over the next few years,” the broker said.
“This would represent a 16% gross yield on today’s share price,” Forsyth Barr said.
The broker rated Sky TV as “outperform”.
“The path to 40cps is driven by: (1) SKT increasing sports prices at mid-single digits per annum and content cost inflation moderating; key is annualised savings from the lower NZ Rugby rights in FY27; (2) executing its Discovery acquisition in line with expectations with a modest cyclical recovery in advertising spend; and (3) using part of its net cash position to reduce shares outstanding – we see all as achievable.
“While SKT faces structural headwinds in its satellite business, we take comfort that both sports subscribers and ARPU [Average Revenue Per User] have been broadly stable over the past five years; we expect this to continue.”
Locate lists
The formerly ASX-listed bitcoin treasury business Locate Technologies had a quiet debut on the NZX on Wednesday.
The stock traded at 8c a share after earlier raising $1 million at 7.5c each.
Locate opted for the NZX over the ASX as it pursues what it said was a faster pathway to growth than that offered by the Australian stock market.
A report in the Australian Financial Review said the ASX had warned that companies that hoard bitcoin like Michael Saylor’s Strategy were unlikely to be welcomed on the bourse.
Locate was the first ASX-listed company to launch a so-called bitcoin treasury – a tactic of hoarding the popular cryptocurrency made famous by Saylor in the US.
Reuters reported this week that Strategy was engaging with MSCI over an upcoming decision on whether to exclude it from the index provider’s indices.
MSCI said it planned to decide by January 15 if it will remove companies whose business model is to buy cryptocurrencies amid concerns they resemble investment funds, which are currently not eligible for index inclusion, Reuters reported.
The price of Bitcoin has been extremely volatile over the last month or so, as has Strategy’s share price.
Scales in 2026
Scales Corp has reiterated its market guidance for the 12 months to December 31, 2025, of an underlying net profit of $54.0m to $59.0m.
Looking ahead to 2026, Scales acknowledged the exceptional group performance in 2025, particularly in horticulture.
Assuming that horticulture volumes normalise, Scales flagged a lower earnings guidance for 2026, with an underlying net profit of $50.0m to $55.0m.
Forsyth Barr said the outlook for 2026 supported its “positive investment thesis”.
“All going well over the next six to nine months, we think Scales has provided scope for further upgrades like those seen in 2025,” it said.
The broker rates Scales as “outperform”.
NZ’s top dividend payers
Sky TV – 11.6%
Spark – 10.2%
Heartland Group – 7.8%
Genesis Energy – 7.7%
Chorus – 6.5%
NZX Ltd – 5.8%
Turners – 5.8%
Mercury Energy – 5.6%
Skellerup – 5.6%
Scales – 5.5%
Napier Port – 5.3%
Contact Energy – 5.2%
EBOS Group – 5.0%
Meridian Energy – 5.1%
Channel Infrastructure – 4.8%
Property sector
Precinct Properties – 8.0%
Stride – 8.0%
Investore – 7.9%
Kiwi Property – 7.6%
Argosy – 7.4%
Vital Healthcare – 7.0%
Property for Industry – 5.1%
Goodman Property Trust – 5.0%
Note – List provided by Craigs. All are gross yields – including imputation credits and/or any PIE tax benefits.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
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