Stock with the highest and safest yield?

Bullock · 14 June 2009

I have a simple question.

What stock is providing the highest and safest yield.

What I mean by safest is unlikely to fall or be cut and your capital outlay not disappear.

I guess Telstra would rate highly.The banks?

Any thoughts?

Muschu · 14 June 2009

Have a couple of thoughts but don't want to be accused of ramping. However I guess it is quite objective to state that WOW has weathered the storm better than most. There are lesser known stocks that have also done this but perhaps Woolies is the best known.

charttv · 14 June 2009

Bullock said:
What stock is providing the highest and safest yield.

Any thoughts?

Why don't you get a table of dividend histories for say the top 50 stocks and then calculate the average change over say the last 10-20 years or so. Your answer would probably lie in there somewhere.

prawn_86 · 14 June 2009

Far from a simpole question Bullock.

If people knew a div was not going to get cut etc, then they would buy that stock, which would lowqer its yeild as the price increased etc.

Capital outlay not disappearing; havn't you watched the markets the last couple years? If you want safety like that put it in a bank account. Again if people knew which stocks were not going to go down, we would all be very rich

erasmus · 14 June 2009

Not sure any stocks are 'safe' .
I have been on a quest for much the same things as yourself and my selection for what its worth are telstra, westpac,wesfarmers ,westfield,commonwealth bank and i also like arg mlt afi and djw and stw because they are big and still have given a dividend ,so far.A pretty boring portfolio but i sleep well at night.

MACCA350 · 14 June 2009

Nice misspell

cheers

erasmus · 14 June 2009

I should also add i have mqg and sun cwn and tol

vincent191 · 14 June 2009

Is Telstra really that safe?? Under the Amigo's watch your value of Telstra shares would have fallen >30% from 2 years ago.

Is Macquarie bank safe? I nearly choke on my cornflakes. It depends when you entered the market. If you bought at the height say at $90 and allowing for right's issue dilutions, is it really safe?

It really is a question of risk & return. There is no such thing as high return with low risk.

brianwh · 14 June 2009

Bullock - check the thread "Retirees - what are your top 5 longterm stocks?"

Julia · 14 June 2009

prawn_86 said:
Far from a simpole question Bullock.

If people knew a div was not going to get cut etc, then they would buy that stock, which would lowqer its yeild as the price increased etc.

Capital outlay not disappearing; havn't you watched the markets the last couple years? If you want safety like that put it in a bank account. Again if people knew which stocks were not going to go down, we would all be very rich

Says it all, really.

soren_lorensen · 14 June 2009

have a look here at afrsmartinvestor dot com dot au

go to share tables and open a .csv in excel

YIELD LEADERS BY MARKET CAPITALISATION

yield industry leaders sort by dividend yield for a list

So_Cynical · 14 June 2009

So many people seem to think safe = big...surely the SP carnage over the last 18 months
has proved this to be flawed thinking, some of the best dividend yields come from single
asset small caps.

Also of course yield is dependent on entry price...and the opportunity for the best entry
or even a good entry is gone for most stocks.

nathanblack · 14 June 2009

i love a good entry :topic

but seriously, the current rate of return is more important than the relative rate of return on your entry price.

if i buy at $20 and recieve a 10%dividend($2). then shares price rises to $40 and my dividend is still $2 (but now only 5%). why should i continue to think about me entry price? surely i can sell and find another stock paying the 10%. my capital may be better elsewhere.

ROE · 14 June 2009

nathanblack said:
i love a good entry :topic

but seriously, the current rate of return is more important than the relative rate of return on your entry price.

if i buy at $20 and recieve a 10%dividend($2). then shares price rises to $40 and my dividend is still $2 (but now only 5%). why should i continue to think about me entry price? surely i can sell and find another stock paying the 10%. my capital may be better elsewhere.

Good luck if you can do that, you can be rich

get yield at 10%, stock double, sell out
find another stock yield at 10%, stock double sell out and repeat the process

do you know how nearly impossible that is

chance are you end up more stock going backward and belly up than double
I haven't seen any stock that yield at 10% and then double in price for as long as I live
most of the time first year 10% yields, a couple year later bankrupt

and don't forget the classic case brisconnect.
0.05 cent dividends promise on 0.01 cent stocks ...hmm wonder if they guys still have a roof
that 0.05 cent promise now turn out to be 0.0005 cent

nathanblack · 14 June 2009

i was exagerating and using simple figures

but for example RIO. if you bought around $40 and now there up above $70, should you still be using the $40 entry price to calculate your returns?

people need to conduct regular review and if a stock has shot up in value, you may be overweight, or there may be better returns elsewhere.

cheeyeen · 14 June 2009

Not sure it fits your requirements, but you can take a look at hybrids and bonds by big companies. They paid good dividends, and your position is ranked higher than ordinary shareholders in the case of bankruptcy. But the growth is limited (most are trading at discount so you still get a little growth out of them). For example LEPHB yield 8% p.a. and u get about ten percent more in two years time when it matures. ORIPB might give u about 15% capital gain + div in about two years time if ORI convert or redeem it. RHCPA has about 10% + div in a bit over one year time if the company redeem or convert it etc. Not exceptional return but not too bad given the risk involved. I have them as part of my portfolio.

ROE · 14 June 2009

nathanblack said:
i was exagerating and using simple figures

but for example RIO. if you bought around $40 and now there up above $70, should you still be using the $40 entry price to calculate your returns?

people need to conduct regular review and if a stock has shot up in value, you may be overweight, or there may be better returns elsewhere.

That is the theory most fund managers subscribe to, overweight, underweight, underperformed, outperformed, shift stock around ..sitting in cash..buy low..sell high...97% of them cant beat the index.. I rest my case .. I got stocks I just hang on and on and on and it beat the index by a country mile every year

I think the best thing you can do is as long as the business fundamental haven't deviate much you just keep hang on to it, and if Mr market being nasty and knock it down hard for no reason buy some more

tehnoob · 14 June 2009

During the initial carnage back in October I bought Cash Converters (CCV) as the SP took a battering but the dividend seemed pretty solid. I'm looking at a yield of 14% fully franked for them.

With a comparatively small market cap I guess many people would not consider CCV safe however I felt they would be a good counter cyclical pick.

RamonR · 15 June 2009

Also bought CCV at lower prices and very happy with my returns.
But with current prices Div yield is around 6.2%.

Julia · 15 June 2009

One holder of CCV is getting 6.3% and the other around 14%????

Stock with the highest and safest yield?

Bullock

Muschu

charttv

prawn_86

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erasmus

MACCA350

erasmus

vincent191

brianwh

Julia

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soren_lorensen

So_Cynical

The Contrarian Averager

nathanblack

ROE

nathanblack

cheeyeen

ROE

tehnoob

RamonR

Julia

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