High dividend yield stocks

[BradK]

Yes, but if the share price of XYZ is $10 and its paying a 10% divvy. That is $1.

If the share price falls to $8 - is it likely to STILL be paying $1 -or 10% - 80c?

If the share price falls to $8 - is it likely to STILL be paying $ 1 - or 10% - 60c?

Share price matters, does it not?

Surely the game is to protect and grow the capital rather than achieve a divvy?

Brad

 

[akkopower]

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.

Is it really that simple. Why would the stockprice rise?
Higher than expected earnings, increased growth potential or maybe reduced risk. There is a good chance that the first two of these would result in a higher dividend.

stock price may fall with the opposite of previously mentioned, resulting in lower dividend.

 

[awg]

OP hasnt said why he is especially seeking high div yield?

however, of the near 2000 ASX listed companies, approx 360 pay divs.

nothwithstanding that additional anaysis regarding yield sustainability, or other factors, would strike out many of those, it still does leave an investor some uesful guideline, in that they are investing in a company that is making a profit now.

Many other considerations are taken into account, and I certainly invest some in non-div payers for better growth prospects. Also prefer they retain fair chunk of earnings, but for the defensive investor, companies that pay dividends have much less risk & volatility imo.

apart from anything else, I rarely buy in a downtrend.

 

[Wysiwyg]

Bear with me; I'm not a rocket scientist.

With the example of RCU paying an unfranked interim dividend of $0.0095 recently.

The share price 52 week range is 9c to 22c so if for example 1 million shares are bought at 10 cents for 100k then ...

1 million * $0.0095 = $9500 before tax on the interim distribution. Plus share value is now at 150k. Is this a common occurrence or is it too good to be true?

Income stocks tend to come into fashion in a sideways and falling market.

 

[condog]

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?

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

I agree with you here, thats how i and so many others di so well during the GFC..... dividens fell a bit , but sp fell dramatically more, so the income stream of dividends during a downturn generally give you a powerful cash flow for buying....at the same time growth stocks where negative 50% or more...with no dividend.....

Having said that some companies slashed earnings to $0.00 and then diluted holdings thru capital raisings right at the bottom of the market....Thank **** i didnt own any of them......

70-90 % of my portfolio is invested in high quality 100% franked dividend paying stock.... My argument is not that yeild is not great, its that it comes at a price.....and its not suitable in all cases.....


Right now however growth stocks are gowing of in the small cap areas and no large / mid cap yeilders are getting anything like the returns....It wont last forever, but its been a very enjoyable ride on some...Ive made more on small holdings in small caps in the last two months then my 80% portfolio will make in the 6 months....and hence my argument....that theres no one single strategy thats best, for anyone , so keep open minds...

The flip side of that argument is if you go just chasing high yeilds you this week, because sp's are strong you will inevitiebl end up holding either a low growth or high risk portfolio .......

Id encourage you to name any company thats earning over 10% dividend that you think is both safe and high growth, and i bet 1 of 50 people in here can come back with evidence that it is either high risk or low growth....

Some classsic examples right now ...TLS high debt to equity plus got regulation risks, TAH loss of gaming licenses, banks ROE smashed by cap raisings and about to do a hell of a lot more, FWD nice but not diversified, etc etc etc.......

If we have a 30% correction then you could walk out and get low risk, high yield and good growth.....but until then dont kid yourself...

 

[So_Cynical]

Id encourage you to name any company thats earning over 10% dividend that you think is both safe and high growth, and i bet 1 of 50 people in here can come back with evidence that it is either high risk or low growth....

OK here's one

HDF - HASTINGS DIVERSIFIED UTILITIES FUND has a Market Cap of 567 mill and has 2 revenue streams, HDF has a half share of South East Water (England and Wales) and wholly owns Epic energy which owns and operates gas pipelines in SA QLD and WA, both revenue streams are regulated and or under contract and go up with CPI.

http://www.hfm.com.au/funds/hduf/

HDF last traded at $1.16 and is forecast to pay quarterly distributions of 3 cents per share...so a little over 10%

http://www.asx.com.au/asxpdf/20091223/pdf/31mxb1sfbr4wc2.pdf

 

[condog]

OK here's one

HDF - HASTINGS DIVERSIFIED UTILITIES FUND has a Market Cap of 567 mill and has 2 revenue streams, HDF has a half share of South East Water (England and Wales) and wholly owns Epic energy which owns and operates gas pipelines in SA QLD and WA, both revenue streams are regulated and or under contract and go up with CPI.

http://www.hfm.com.au/funds/hduf/

HDF last traded at $1.16 and is forecast to pay quarterly distributions of 3 cents per share...so a little over 10%

http://www.asx.com.au/asxpdf/20091223/pdf/31mxb1sfbr4wc2.pdf

haaaaaahaaaaaaaaaaaaa

Too easy

Acoording to figurs on comsec

For starters it had declining EPS from 2008 to 2009, so its risk is that its affected by global sentiment or cyclical economic factrs significantrly...EPS was 11c in 2008, down to 7.0c in 2009 and only up to 7.5c in 2010 so its hardly a growth stock...dec;ining sales, flat cash flow , rediculously unsustainable payout ratios of up to 348% of earnings....

Now im no rockety scientist but i know how to analyse a stock and this one really worries me...

The only thing going for it at all is its flat revenue...(and thats a negative in my books)

It has a negative ROE, declining profit for several years....higher current liabilities then current assets....that in itself is reason not to invest in it...unless it can roll its debts over it will be forced to sell assets or default on loans..... If the GFC taught all companies and investors one thing it was get your balnce sheets in order and keep them there....

Its a high risk low growth stock and hence its high yeild....come in spinners...

I would not invest in this with my money ever....declining in nearly all aspects and high to extremely high risk...no real obvious growth prospects showing in its figures .....

This stock highlights exactly what i said....If in todays market you get a high yeild you are getting either or both a high risk and low growth....and this is a classic example...and pardon the pun but Im being honest not cynical...

 

[Aussiest]

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?



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

Unless it was Babcock & Brown or ABC Learning.

 

[Julia]

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?

I see the point you're making, but it's not a reasonable analogy. If you have a term deposit in an Australian bank your capital is not at risk of being diminished. The dollar will always fluctuate in value. Your capital in the TD will always remain intact. You cannot say the same for capital in a stock.

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

True. And if you are happy to accept the risk of your capital diminishing if the SP continually falls, then that's your choice. It ain't something I'd be happy with, other than say temporary dips in something like the big banks.
I simply can't see the point of accepting a high yield if your capital could be reducing by twice, e.g. what you are getting in that yield.

Is it really that simple. Why would the stockprice rise?
Higher than expected earnings, increased growth potential or maybe reduced risk. There is a good chance that the first two of these would result in a higher dividend.

stock price may fall with the opposite of previously mentioned, resulting in lower dividend.

That's a reasonable comment. What I'm concerned about is not that sort of reasonable ratio, but rather companies which continue to pay high dividends whilst carrying large debt, or borrowing to pay those dividends. That's simply not good business, neither is it sustainable in the longer term.

OP hasnt said why he is especially seeking high div yield?

Yep. Waiting to hear on this.

however, of the near 2000 ASX listed companies, approx 360 pay divs.

nothwithstanding that additional anaysis regarding yield sustainability, or other factors, would strike out many of those, it still does leave an investor some uesful guideline, in that they are investing in a company that is making a profit now.

Mostly, but not necessarily, in that TLS would not be the only example of a company which has borrowed to pay dividends.

Apart from anything else, I rarely buy in a downtrend.

Glad to hear it, awg.

haaaaaahaaaaaaaaaaaaa

Too easy

Acoording to figurs on comsec

For starters it had declining EPS from 2008 to 2009, so its risk is that its affected by global sentiment or cyclical economic factrs significantrly...EPS was 11c in 2008, down to 7.0c in 2009 and only up to 7.5c in 2010 so its hardly a growth stock...dec;ining sales, flat cash flow , rediculously unsustainable payout ratios of up to 348% of earnings....

Now im no rockety scientist but i know how to analyse a stock and this one really worries me...

The only thing going for it at all is its flat revenue...(and thats a negative in my books)

It has a negative ROE, declining profit for several years....higher current liabilities then current assets....that in itself is reason not to invest in it...unless it can roll its debts over it will be forced to sell assets or default on loans..... If the GFC taught all companies and investors one thing it was get your balnce sheets in order and keep them there....

Its a high risk low growth stock and hence its high yeild....come in spinners...

I would not invest in this with my money ever....declining in nearly all aspects and high to extremely high risk...no real obvious growth prospects showing in its figures .....

This stock highlights exactly what i said....If in todays market you get a high yeild you are getting either or both a high risk and low growth....and this is a classic example...and pardon the pun but Im being honest not cynical...

Very good analysis, Condog, and it demonstrates the point I've been attempting to make.

 

[Julia]

Bear with me; I'm not a rocket scientist.

With the example of RCU paying an unfranked interim dividend of $0.0095 recently.

The share price 52 week range is 9c to 22c so if for example 1 million shares are bought at 10 cents for 100k then ...

1 million * $0.0095 = $9500 before tax on the interim distribution. Plus share value is now at 150k. Is this a common occurrence or is it too good to be true?

I'd never heard of this so have had a look at it. Your figures seem correct.
That represents an unfranked yield of 9.5%.

The following is copied from the E-trade Company Profile page for RCU

Type Cents per share Frnk % Ex Dividend Date Dividend Pay Date
Interim 0.95 0 23/12/2009 15/1/2010

(Sorry: the columns didn't line up when pasted, but it's clear what the figures are.)


The last sale was at 15 cents, and they are paying 95 cents per share?????

How?? Why??

Dividend yield is quoted at 40% and Forecast DPS is 6 cents.
Sector is quoted as paying7.9% yield and the market at 4.3%.

I'm interested in anyone's comments on this. Do you actually own this Wysiwyg?

 

[So_Cynical]

haaaaaahaaaaaaaaaaaaa

Too easy

Acoording to figurs on comsec

For starters it had declining EPS from 2008 to 2009, so its risk is that its affected by global sentiment or cyclical economic factrs significantrly...EPS was 11c in 2008, down to 7.0c in 2009 and only up to 7.5c in 2010 so its hardly a growth stock...decining sales, flat cash flow , ridiculously unsustainable payout ratios of up to 348% of earnings....

Now im no rockety scientist but i know how to analyse a stock and this one really worries me...

The only thing going for it at all is its flat revenue...(and thats a negative in my books)

It has a negative ROE, declining profit for several years....higher current liabilities then current assets....that in itself is reason not to invest in it...unless it can roll its debts over it will be forced to sell assets or default on loans..... If the GFC taught all companies and investors one thing it was get your balnce sheets in order and keep them there....

Its a high risk low growth stock and hence its high yeild....come in spinners...

I would not invest in this with my money ever....declining in nearly all aspects and high to extremely high risk...no real obvious growth prospects showing in its figures .....

This stock highlights exactly what i said....If in todays market you get a high yeild you are getting either or both a high risk and low growth....and this is a classic example...and pardon the pun but Im being honest not cynical...

Jezz condog you disappoint me...Commsecs numbers are a joke, ill selectively quote what ORBIS/SM AUSTRALIA funds thinks of HDF from a Sept 09 publication....just because u seemed to have missed some fundamental key points.

HDF has some long-term contracts with large gas producers to transport their gas from the production centres down to the South Australian markets. These contracts typically require the producers to pay a fixed amount for the use of the pipeline (even if they do not need it) which escalates by the Consumer Price Index (CPI) every year.

The cash flows which HDF generates from its pipelines are sustainable, require no financial engineering and will grow with CPI given the nature of its contracts.

HDF’s equity stake in the UK water utility. This utility is highly regulated and has very high levels of debt which makes forecasting difficult. But the investment has paid HDF $0.02 per share annually and there is no reason to believe that this will not be maintained. Also, HDF does not guarantee any of the water company’s debt and so HDF’s downside is limited.

HDF yields 10% per annum which is very secure and likely to grow by at least CPI plus another 2% per annum which is likely to continue. In addition, HDF has spare capacity in its pipelines and, together with new pipelines being considered, should also benefit from growth in gas volumes. Growth may well exceed inflation over the next decade. In this market, we believe HDF offers excellent value with far below average risk.

http://www.orbisfunds.com.au/reports/SMEF-QuarterlyReport2009Q3.pdf

condog you certainly are no rockety scientist and that goes for me too...i could care less about outdated EPS figures and cyclical economic factors, lol HDF owns pipelines where there are no other pipelines, they have a monopoly (in some areas) moving an essential, growth commodity....with CPI linked contracts and spare capacity, with new capacity coming with the (now fully funded) South West Queensland Pipeline Stage 3 expansion.

Ill save this thread in my favourites so i can remind you about it in 12 or so months when HDF is $2 a share.

 

[condog]

Hey cynical youve lost the plot, the argument was whether you could produce a company with 10%+ dive that is (not might be) high growth, and low risk....on that basis this is a resounding failure....

For your sake I hope your right...and I will concede some companies occassioanlly look crap for ages then suddenly turn around because of a sudden development in thier circumstances....or because they suddenly acquire a super profitable asset.......but you cant go saying they are high growth, low risk and good dividend till they at least have all 3 in place, or some type of history of all three.... Just becaus Orbis says they think its outlook is good, doesnt mean it is high growth, low risk and good dividend....

But on the face of thit this one looks terrible...

Remember here though the argument is not can we find a company thats crap now and good in 12 months time.....its can we find a company with low risk, high growth and 10+% dividend in todays price.........


On that basis you lose fair and square. In this case, as it is not high growth, (your assuming it might be because Orbis says so) . ITs 5 year and 3 year price graph shows its trending backwards so there is absolutely no evidence of positive growth let alone high growth........
Its certainly not low risk, as its balance sheet and finacial statements looks , very very ordinary and it has very high risk short term debt, on top of that even the quote you provided says 1/3 of its EPS is derived from an investment they know little about, thats highly regulated and carries very high debt.....That is certainly not classified as low risk in any way shape or form.......t

 

[condog]

To new investors reading this, even though I feel So-Cynical is completely wrong on this, it goes to highlight how two investors can analyse the exact same company and come away with entirely different views and decisions......

Even in my own portfolio I have a split with 70-90% invested with safe fundamental paremeters and 10-30%ish invested for pure growth, some of that very speculatively...... my investment philosophy has to make a massive shift depending on which part of my portfolio I am operating in.......

But the key thing I want you to know that we have proved here is, when prices are fair to high, its very hard to find high yeild companies that are low risk and high growth.....The market is so big it tends to iron out these characteristcs, and so if you buy a good growth stock with low risk you pay a higher premium and thus get a lower yeild......

The exception to this rule is during corrections and GFC's when the market loses all sorts of balance and provides remarkable buying opportunities in fantastic stocks.....but even then one could argue that the overall market risk is up, and hence the ability to get high growth and high yeild are available.......

 

[condog]

For beginners, as a learning experience go and look at the 5 year price charts and balance sheet summary for HDF and then compare it to JBH....very quickly you will see why JBH has a low dividend and why HDF has a high dividend... ..... if the balance sheet confuses you just look at the share price charts and you will see why one is classified as growth and the other is not....

To So Cynical

...i could care less about outdated EPS figures and cyclical economic factors, lol HDF owns pipelines where there are no other pipelines, they have a monopoly (in some areas) moving an essential, growth commodity....with CPI linked contracts and spare capacity, with new capacity coming with the (now fully funded) South West Queensland Pipeline Stage 3 expansion.

Thats your perogative to ignore EPS and I hope your right.....but ,

FACT: there is no evidence its high growth, high yeild and low risk.........

Telsta is also a monoly and its also proof of how horribly wrong governement interfiernece can ruin the sp / prospects of a heavily regulated sector.....

CPI linke is a big minus to me....I try to look for comapanies that are going to exceed the CPI by a significnat margin

Ill save this thread in my favourites so i can remind you about it in 12 or so months when HDF is $2 a share.

Thats fine if you purchased it any time since the GFC....but if you happened to purchase it in the June 09 mini sp spike your already 20% behind.....if you happened to purchase it two years ago at $3.20 then your only $2 behind or in other terms youve suffered a 70% loss of capital (growth ???? seriously cmon).....

So yes i hope it does go forward for you, but I suggest you have a real look at it rather then relying on that Orbis funds report. Im not saying Orbis a wrong they are only speaking in a forward looking context and I dont know the timeframes they are using, but I am defineitley saying that this is not an example of a high dividned stock that has low risk and high growth, in fact its almost a perfect stock to highlight what I was getting at................. best of luck to all....

 

[So_Cynical]

condog ive come to the inescapable conclusion that you and i have very different definitions of risk and growth, and certainty different levels of risk acceptance....do you consider your self to be a super conservative investor?

The Orbis funds write up was a piece i found only a few weeks ago (well after i brought in) and was surprised because here's a major investment fund with pretty much exactly the same view on HDF as i have.

As you have pointed out there are no stocks that have

• low risk
• high growth
• and 10+% dividend in today's price

And yet there are people (like me) that have brought into stocks in the last 16 months that have grown in value by over 300% and that yield over 14%

I mean jezzz everything was considered risky back in the first 5 months of this year...and yet fortune favours the brave...as it always has and always will. Your risk aversion basically means you will miss all the really big movers/yielder's because they don't met your strict definition of a "good thing"

By the time XYZ has all its fundamentals in place, and 3 years of consistent growth behind it and a SP that's been trending up for 2 years...you have well and truly missed the boat.

but if you happened to purchase it in the June 09 mini sp spike your already 20% behind.....if you happened to purchase it two years ago at $3.20 then your only $2 behind or in other terms youve suffered a 70% loss of capital (growth ???? seriously cmon).....

Ok so we are talking about right now, not when i brought in a few months back at 84 cents and not 2 years ago at 3.20 so lets keep it real...im a buy low kinda guy and im only interested in value buying (falling SP) and thats what caught my attention with HDF...personally i wouldn't be buying HDF at current levels because the value horse has bolted now, under 85 cents great buying now not so as the yield has fallen to almost 10%

As far as HDF goes there's only as few months out off the last 5 years when i would of been interested in buying...there's a time to buy, a time to hold, and a time to sell.
.

 

[condog]

Does that graph above actually look like a growth stock to anyone else other then So_Cynical????
It certainly does not to me....

condog ive come to the inescapable conclusion that you and i have very different definitions of risk and growth, and certainty different levels of risk acceptance....do you consider your self to be a super conservative investor?

Possibly...but i think youve completely forgotten what this debate was about.... It was whether you could find a high growth low risk stock with 10%+ dividend in todays market.....which i stated was extremely unlikely, if not impossible....as the market prices it in........

You came back sighting HDF as an example ........ you where clearly wrong or misinterpreted my challenge...

As you have pointed out there are no stocks that have

• low risk
• high growth
• and 10+% dividend in today's price

100% Agreed - I thought thats what this whole debate was about and now your agreeing.........about time, you took the long convoluted route to agree with me though.....

And yet there are people (like me) that have brought into stocks in the last 16 months that have grown in value by over 300% and that yield over 14%

Agreed, I have too, ROL , TRF, MND, LYL, SMX, DTL etc some yeilding over 20%. But at the time i bought them the entire global financial market was a wash with incredible risk.......hell even some of my bluechips i bought put on 100-180%, I had the best financial year of my life, and the last 3 months is the icing on the cake.......but the irrescapable fact is this argument is about whether you can buy a high growth low rick 10%+ dividend stock today.....and you absolutely cannot.....

I mean jezzz everything was considered risky back in the first 5 months of this year...and yet fortune favours the brave...as it always has and always will. Your risk aversion basically means you will miss all the really big movers/yielder's because they don't met your strict definition of a "good thing"

Yes thatss what im saying when dividend and growth are assured, its becasue risk is elevated, irrespective of whether that risk is global, economic or stock specific......

By the time XYZ has all its fundamentals in place, and 3 years of consistent growth behind it and a SP that's been trending up for 2 years...you have well and truly missed the boat.

No i wont, im not risk averse, i just stating what took you two days to see.......you cant have low risk, high div and high growth....all at once unless the overall market is down and thats usually due to hightened risk anyway......

Im not saying avoid risk......Im saying be aware of chasing high dividend stocks in todays market, as they likely have low growth or elevated risks....thats it in a nut shell..........

I dont think you know my investing style or risk tolerance.........this debate has nothing to do with risk tolerance or my risk tolerance.......and i think if you where to know a few speculativie plays i have at present and the size of them you would look extremely foolish making this wild claim............

I actually love risk and embrace it , because its provides a massive return in most cases, but it takes years of excperience to learn how to play the risk game........ and the beginners lounge is not the place to be doing it.....

Ok so we are talking about right now, not when i brought in a few months back at 84 cents and not 2 years ago at 3.20 so lets keep it real...im a buy low kinda guy and im only interested in value buying (falling SP) and thats what caught my attention with HDF...personally i wouldn't be buying HDF at current levels because the value horse has bolted now, under 85 cents great buying now not so as the yield has fallen to almost 10%

No where not we never where.....The debate was can you name a growth stock that has 10%+ dividend and low risk....you came back with HDF and where very much wrong.... at least have the integrity to admit you misinterpreted it or got it wrong....

As far as HDF goes there's only as few months out off the last 5 years when i would of been interested in buying...there's a time to buy, a time to hold, and a time to sell.
.

This is irreleevant to the argument......you where asked to find a stock that was high growth with 10%+ dividend and low risk, not a stock that has gone up in the last few months of a GFC low with high dividend....


Perhaps and I hope for your sake you completely misinterpreted what I asked for.... but i rest my case..... at todays prices its extremely unlikely that the market will allow you to buy a 10%+ dividend stock that is low risk and high growth....

To the onlookers srrry for this, but hopefully it has hepled in someway....debate is healthy anyway....
If he wants to go round in circles thats fine....but i dont feel the need to say any more on it....

Beginners just remember - the market is letting you have that high dividend because they regard the stock as either high risk or low growth......the only exception is when we have corrections.....

 

[So_Cynical]

Does that graph above actually look like a growth stock to anyone else other then So_Cynical????
It certainly does not to me....


Possibly...but i think youve completely forgotten what this debate was about.... It was whether you could find a high growth low risk stock with 10%+ dividend in todays market.....which i stated was extremely unlikely, if not impossible....as the market prices it in........

You came back sighting HDF as an example ........ you where clearly wrong or misinterpreted my challenge...

I agree that by your super conservative agenda HDF doesn't met your requirements of high growth low risk stock with 10%+ dividend in today's market....however you asked me (and i assume others involved with this thread) to identify a stock that i believe met that agenda and i did...if you or anyone else doesn't see HDF as i see it, well that's an issue with your perception and risk aversion.

The facts remain that HDF is paying 10%+ has funding in place for a major capacity expansion (Growth) and is in a low risk business with very stable and predictable, CPI linked revenues.

You are right on one front...high growth low risk stocks with 10%+ dividend in today's market don't last long, the market eventually prices down that dividend as it has been doing for the last 5 months with HFD...within the next couple of weeks HDF will in all likelihood be trading above $1.20 and the opportunity for punters to get a double digit return will be gone...at least on this stock.

HDF revenue growth forecast below....Good luck with your risk averse investing condog.
.

 

[condog]

Good luck with your risk averse investing condog.
.

Why thank you....if you had any idea and followed any of the stock i invest in on this forum you know that I have a massive risk tolerance .....but i have no tolerance for this garbage.....

If you lack the integrity to admit you got it wrong and that HDF is clearly not a growth stock, so be it.....

Thats another lesson for beginners, be sure to cross check the infiormation your getting , it could be from some one who thinks HDF is a growth stock...

Beginners go to your charts and look at the growth charts for JBH and HDF....you will soon see the difference why one pays 10%+ and the other pays 1.6%.... the market has priced in that JBH has significant growth prospects, so investors pay a premium and as a result the dividend is limited.....on the other hand HDF has a history of low to stagnant or negative growth and wise investors have seen this and priced it in, unwilling to pay a premium price.....hence the high dividend.....

Signing off from this garbage....goodbye...

 

[akkopower]

• low risk
• high growth
• and 10+% dividend in today's price

does tls come close to this

 

[condog]

does tls come close to this

Sorry but its not low risk due to govt threats of splittting Telstra, govt price restrictions, govt mandates on service levels for unprofitable areas of the business and govt sponsored competitors.......our mate senator conroy can make any crazy decision for any crazy reason and whamo TLS cops it.....so its not low risk.......and its main risk is 128% debt to equity ratio...(which is rediculoualy high for a compoany so big that generates so much free cash flow). Its in most cases an acceptable risk, but not low risk....

Disclaimer- i held this stock til very recently, as thats a calculated risk at its Conroy affected price that i was willing to fully buy into, but Im out now as it issued a 12 month flat earnings forcast and thats a huge sell trigger for me...

TLS certainly has some good cash flows but its definitely not high growth, infact its a long term negative growth stock, which hopefully for it may be turning the corner....there are some signs it may have stopped the rot.......but even TLS itslef has annnounced they expect a flat 12 months (that wil relieve some investors that have had 5+ years of declining sp).....TLS is down from highs of around $10 to a sp of $3.27, its clearly not a growth stock and its the perfect example of why some high dividend paying stocks can erode your capital...... there are many many retirees and investors that blindly bought or held telstra when it was clearly paying dividends above its earnings from borrowed money , they bought and held on because the 14% dividend was irreistable....look where it got them..........

In fact this case study is what this whole thread / debate is about.......

TLS is a Perfect example of why dividend is just one factor.....and why you need to ask yourself why is the market allowing me to buy this company that has such a high dividend.......theres usually a very good reason.....

Always remember....a high dividend in a normal market is usually a sign of elevated risk or lower grwoth.....
Im not saying to avoid them as, I own many, but dont be fooled that your getting all three parameters....