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.
Income stocks tend to come into fashion in a sideways and falling market.
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.
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
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 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.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?
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.Sure, but the SP is irrelevant if im not selling.
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.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.
Yep. Waiting to hear on this.OP hasnt said why he is especially seeking high div yield?
Mostly, but not necessarily, in that TLS would not be the only example of a company which has borrowed to pay dividends.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.
Glad to hear it, awg.Apart from anything else, I rarely buy in a downtrend.
Very good analysis, Condog, and it demonstrates the point I've been attempting to make.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...
I'd never heard of this so have had a look at it. Your figures seem correct.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?
(Sorry: the columns didn't line up when pasted, but it's clear what the figures are.)Type Cents per share Frnk % Ex Dividend Date Dividend Pay Date
Interim 0.95 0 23/12/2009 15/1/2010
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...
Orbis funds said: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.
Orbis funds said: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.
Orbis Funds said: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.
Orbis funds said: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.
...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 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).....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.
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).....
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........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?
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.....As you have pointed out there are no stocks that have
- low risk
- high growth
- and 10+% dividend in today's price
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.....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%
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......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"
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......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 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....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%
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....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.
.
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...
Good luck with your risk averse investing condog.
.
- low risk
- high growth
- and 10+% dividend in today's price
does tls come close to this
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