For Australian investors looking to build a reliable stream of passive income, dividend-paying stocks remain a solid strategy. And this week, Seek Ltd (ASX: SEK), one of the S&P/ASX 200 Index (ASX: XJO) stocks, delivered some exciting news for income-focused investors.

Despite mixed financial results for the first half of FY 2025, Seek announced a significant 26% increase in its interim dividend, thanks to a strong surge in free cash flow. Let’s dive into the details and see what this means for investors looking to capitalise on dividend opportunities in February 2025.

Seek’s Dividend Payout Gets a Major Boost

Seek, Australia’s leading online job advertising platform, saw its revenue decline by 4% year-over-year to $536.2 million, primarily due to lower job ad volumes in its core markets. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) also dropped by 9% to $223.9 million, while adjusted profit fell 28% to $77.0 million.

However, the company managed to achieve a remarkable 93% increase in free cash flow, reaching $81.8 million in just six months. This financial flexibility allowed Seek’s board to declare a fully franked interim dividend of 24 cents per share, up from 19 cents last year—a 26.3% increase. Eligible shareholders can expect their payout on April 2, 2025.

What’s Driving Seek’s Performance?

Seek’s CEO, Ian Narev, attributed the company’s resilience to strong product innovation and strategic sales execution. The company expanded its market share in ANZ, reclaiming the top position in Singapore and the Philippines while maintaining leadership in other key Asian markets.

Furthermore, Seek’s Growth Fund delivered a 9% revenue increase, and its recent partial sell-down of an Employment Hero stake contributed to an overall portfolio valuation increase of 5%. This valuation uplift allowed Seek to reallocate capital toward reducing its debt.

What’s Next for Seek in FY 2025?

Looking ahead, Seek has provided the following guidance for the remainder of FY 2025 (excluding significant items):

• Revenue: Between $1.06 billion and $1.10 billion
• Total Expenditure: Between $750 million and $770 million
• EBITDA: Between $440 million and $470 million
• Adjusted Profit: Between $135 million and $160 million

Despite a 13% share price increase over the past six months, Seek’s stock remains down 3% year-over-year, making it an interesting consideration for investors seeking growth and income potential.

Looking for the Next Big ASX Dividend Stock?

Seek’s dividend increase highlights how strategic stock selection can unlock strong income opportunities. But with hundreds of ASX stocks available, how do you pick the right ones?

Our latest FREE report, ‘Top 5 ASX Stocks to Invest in February 2025,’ uncovers the best dividend and growth stocks in the Australian market right now. Download your copy today at freereport.pristinegaze.com.au and gain insights into companies poised for strong returns this year.

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