Australian (ASX) Stock Market Forum

High dividend yield stocks

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Some stocks in the property and utility sectors are offering the best yields at the moment IMO.

Have a look at

  • HDF *
  • CWT
  • CDI
  • ALZ
  • ARJ *

Close to double digit yield on all of them and lowish risk on most. :) disclosure i hold *
 
visionincomoda said:
Hi,

I'm planning to start a high dividend portfolio. Where can I look for high dividend yield stocks?
Click to expand...

In choosing high dividend stocks, what regard do you intend to give to what the share price is doing? Any other considerations apart from the yield?
 
Julia said:
In choosing high dividend stocks, what regard do you intend to give to what the share price is doing? Any other considerations apart from the yield?
Click to expand...

Seriously who cares what the SP is doing when your getting a +double digit yield, using my situation how do you or anyone else justify selling down a stock yielding over 14% :dunno:
 
visionincomoda said:
Hi,

I'm planning to start a high dividend portfolio. Where can I look for high dividend yield stocks?
Click to expand...

you can run a fundamental scan ranking ASX stocks on dividend yield (+ other variables) for free, using MSN money website or Comsec, and other broker websites, there is other free sites.
 
So_Cynical said:
Seriously who cares what the SP is doing when your getting a +double digit yield, using my situation how do you or anyone else justify selling down a stock yielding over 14% :dunno:
Click to expand...

Are you serious? Say you have $50,000 in a stock yielding 14%.
That's $7000 p.a.
If the stock declined in its capital value by, say 10%, your effective total yield becomes just $2000. And if the SP falls say 20%, then you're in the red to the tune of $3000.

Sure, the 14% is good if your SP is rising or even static, but haven't we all seen many, many people just watch their capital diminish because "well, it has such a good dividend".

Makes no sense to me.
 
Julia said:
Sure, the 14% is good if your SP is rising or even static, but haven't we all seen many, many people just watch their capital diminish because "well, it has such a good dividend".
Click to expand...
Valid points Julia. Does the yield always decline with the share price?
 
I used to chase dividends, good for a while, but just didn't seem to work out Seems that in the commercial world the cost of doing business along with competiveness tends to bring the high yielders into line with their peers eventually.
 
Real Estate Capital Unit (Yahoo = 40% gross) and Multiplex Acumen Unit (Yahoo = 16.1% gross) have declined and flatlined in price substantially over the years. :cautious:
But they are high dividend yielding. :)
 

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Julia said:
Are you serious? Say you have $50,000 in a stock yielding 14%.
That's $7000 p.a.
If the stock declined in its capital value by, say 10%, your effective total yield becomes just $2000. And if the SP falls say 20%, then you're in the red to the tune of $3000.
Click to expand...

Perhaps im wrong but i classify yield as return on investment, if my 50K is still getting me (14%) 7K i cant see a problem...the SP is a side show after you enter, of course before entry the SP is all important because it determines yield, i entered all my high yielding stocks close to bottom or at close to intermediate bottoms, that's why there high yielding.

Over the last 14 months there are people that paid ridiculously low prices for all sorts of great dividend and distribution paying stocks...now pulling yields of over 30 and 35%...fortune does favour the brave.
 
Wysiwyg said:
Real Estate Capital Unit (Yahoo = 40% gross) :cautious:
But they are high dividend yielding. :)
Click to expand...

Whoa, I delved a bit further into RCU and their distribution was just under 1cent ($0.0095 AND unfranked for 6.3% dividend at current market price) so Yahoo data again proves to be false and misleading. Apologies for incorrect data source.
 
So_Cynical said:
Perhaps im wrong but i classify yield as return on investment, if my 50K is still getting me (14%) 7K i cant see a problem...the SP is a side show after you enter, of course before entry the SP is all important because it determines yield, i entered all my high yielding stocks close to bottom or at close to intermediate bottoms, that's why there high yielding.

Over the last 14 months there are people that paid ridiculously low prices for all sorts of great dividend and distribution paying stocks...now pulling yields of over 30 and 35%...fortune does favour the brave.
Click to expand...

The question must always be asked why does the market price the dividend so low? Are they expecting the dividend to be reduced in the future? Look at all the REITs in early 2009 and high yields were all over the shop for the first quarter / half. Then virtually all stoped paying dividend in the second half, and many are now trading at 5-8% yield on the reduced dividend.

Or look at Telstra and what a good yield story that was.
 
Wysiwyg said:
Multiplex Acumen Unit (Yahoo = 16.1% gross) have declined and flatlined in price substantially over the years. :cautious:
Click to expand...
This mob stopped paying dividends over a year ago. Guess I should do my own research more thoroughly.
speechless-smiley-017.gif
 
awg said:
you can run a fundamental scan ranking ASX stocks on dividend yield (+ other variables) for free, using MSN money website or Comsec, and other broker websites, there is other free sites.
Click to expand...
Add Morning Star dot com dot au in there too. Register at .............

Morning Star

Go to Tools and then go to StockScreener for fundamental stuff.
 
ITs hard to say which is best....growth or yield...

I find you need different sotcks for different purposes.....

EG: to stop working and go holidaying you want great yeilds that you dont need to watch or sell down capital, the dividends keep rolling intot he account every half or quarter....

Where as when im chasing growth im usually I go looking in small to mid caps...with 0 yeild and often 0 earnings...

The old formula: each share has three main characteristics, they are; Yeild, growth and risk....

The market places prices accordingly and as a result share with high growth prospects and low risk usually have low yeild ....because everyone pay a premium price....
Similarly shares with high yeild and low risk usually dont grow because of size and becasue they are returning all or most capital via dividand
Shares with high risk, can have both high yeild and high growth, because everyone is scared to pay too much and half the investors are scared or smart enough to avoid...

You can have two most the time but its only occassionally you can get all three...

Anyway back to my points....If you want to stop work yeild certainly is important, especially if its 100% franked because its tax free income....
Selling down capital has a fair tax rate due to CGT, but franking credits can help keep that down....
So no one argument wins here ....this is really a case where each individuals goals and needs determines the best streategy....
And in the majority of cases they will find that a combination of some yeilders and some growth is warrented....especially where dividend income exceeds necesary income....then growth comes inot its own.....but below that point dividends with some growth usually seems better...
 
Before buying a stock based on dividend yield check that the yield is sustainable by looking at the operating cash flow generation of the company vs market capitalisation (same as CFO per share/share price). If the dividend yield is higher than the cash flow yield then I would think twice about investing as the company is likely paying dividends out of retained earnings/debt. Don't fall in the yield trap. Some of those high yielders could end up like ponzi schemes.
 
I agree with bilo.

The yield stated is usually the "historical yield". In situations where the SP has plummetted, the historical yield jumps as it is still using the previous dividend with the current SP. Knowing whether the divvy is sustainable in the future is the catch.

Of course, the divvy could be retained by borrowing to pay for them; like TLS. :eek:

Cheers,

Kenny
 
bilo83 said:
Before buying a stock based on dividend yield check that the yield is sustainable by looking at the operating cash flow generation of the company vs market capitalisation (same as CFO per share/share price). If the dividend yield is higher than the cash flow yield then I would think twice about investing as the company is likely paying dividends out of retained earnings/debt. Don't fall in the yield trap. Some of those high yielders could end up like ponzi schemes.
Click to expand...

kenny said:
I agree with bilo.

The yield stated is usually the "historical yield". In situations where the SP has plummetted, the historical yield jumps as it is still using the previous dividend with the current SP. Knowing whether the divvy is sustainable in the future is the catch.

Of course, the divvy could be retained by borrowing to pay for them; like TLS. :eek:

Cheers,

Kenny
Click to expand...
Exactly. The other consideration is whether you'd prefer to own a company which focuses on growing the business rather than paying profits out to shareholders.

I understand the appeal of that steady income stream, but only if the underlying stock is strong.

If you buy a stock which will give you, say, even just 40% growth on your capital investment, then imo that allows you to sell a few shares to provide income if you need it.

Another factor is - if you can practicably do it - holding the stock in Super where the tax is minimal.

Wysiwyg said:
Valid points Julia. Does the yield always decline with the share price?
Click to expand...
The reverse, Wysiwyg. Think about it in dollar terms. If you buy a $1 share with a 10% dividend, you receive 10 cents per share. The number of cents paid doesn't change with the alteration of the SP, as you know, so if that $1 share becomes worth $2, then the yield obviously reduces to 5%.

Likewise, if the SP falls, then obviously your percentage yield becomes higher.
Thus, the reason so many stocks that have fallen through the floor are quoting high yields.

So_Cynical said:
Perhaps im wrong but i classify yield as return on investment, if my 50K is still getting me (14%) 7K i cant see a problem...the SP is a side show after you enter, of course before entry the SP is all important because it determines yield, i entered all my high yielding stocks close to bottom or at close to intermediate bottoms, that's why there high yielding.

Over the last 14 months there are people that paid ridiculously low prices for all sorts of great dividend and distribution paying stocks...now pulling yields of over 30 and 35%...fortune does favour the brave.
Click to expand...
OK, but do you see the point I'm trying to make if the SP falls?
 
Julia said:
Think about it in dollar terms. If you buy a $1 share with a 10% dividend, you receive 10 cents per share. The number of cents paid doesn't change with the alteration of the SP, as you know, so if that $1 share becomes worth $2, then the yield obviously reduces to 5%.

Likewise, if the SP falls, then obviously your percentage yield becomes higher.
Thus, the reason so many stocks that have fallen through the floor are quoting high yields.
Click to expand...
No - I just don't see it that way, i have a dollar investment in XYZ and am getting a % return on that investment, the SP will do what ever it will.

Its a bit like a TD in a Aussie bank....do you have less invested if the AUD falls? do you run out and switch to a EURO deposit?

Julia said:
OK, but do you see the point I'm trying to make if the SP falls?
Click to expand...

Sure, but the SP is irrelevant if im not selling.
 

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