Registered Members Login:
   
Forgotten Your Details? Click Here To Recover +
Welcome To The ShareCafe Community - Talk Shares And Take Stock With Smart Investors - New Here? Click To Register >

A reminder to all members that you agree through the use of ShareCafe, that you understand and accept the TERMS OF USE.


3 Pages (Click to Jump) V   1 2 3 >   
 
  
Reply to this topic

Seeking shares with good dividend yield, and offering dividend reinves
nipper
post Posted: Apr 16 2020, 02:16 PM
  Quote Post


Posts: 7,298
Thanks: 2509


maybe this thread could be renamed
QUOTE
"Seeking shares with any dividend yield, (but I'd be wary of dividend reinvestment)"

QUOTE
UBS says so far, 38 stocks in the ASX 200 have suspended, deferred or cut dividends and a further 60 have seen dividend per share forecasts fall by more than 20 per cent. This is at a time that companies, such as those in the financial services space, abandon their payouts to conserve cash on the back of the coronavirus crisis.

UBS have selected Aurizon, Ausnet Metcash, Coles Group, APA Group and Woolworths as having the best prospects for investors focused on dividend payments.
They believe AGL Energy, Amcor, Brambles, Bunnings landlord BWP Trust, CSL, Inghams, Kogan, Magellan, ResMed Rural Funds, Wesfarmers, Telstra and Clover Corporation will provide reliable earnings streams.

Their analysts highlight SkyCity, Sydney Airport, JB Hi-Fi, Scentre Group, Challenger and Vicinity Centres as having dividend payout expectations that are too high. Other companies likely to pay a smaller dividend in the year ahead, or no dividend, are Alumina, ANZ, NAB, Northern Star, Oz Minerals, QBE, Servcorp, Stockland, Western Areas and Westpac.


Note earnings streams and dividends aren't the same



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: henrietta  Pendragon  
 
nipper
post Posted: Nov 15 2019, 08:31 PM
  Quote Post


Posts: 7,298
Thanks: 2509


Focus on quality yield, not near-term income
QUOTE
It is the subject most share market experts and commentators would rather not talk about: buying cheaply-priced stocks works best when interest rates are higher, economic growth and cycles are relatively robust and there is no mass-disruption eroding barriers of entry and technological innovations.

The current environment is different. Interest rates are exceptionally low, and likely to move lower still. Economic growth the world around post-GFC has never been quite the same, and the overall pace remains low by historical standards. And change caused by innovations.

Cheap companies might stay cheap
The direct result is that corporate throwbacks, missteps and failures are not necessarily temporary in nature, as was mostly the case pre-2012. Cheaply-priced companies might find it hard to sustainably improve their operations and thus catch up with the prolonged bull market in equities.

It is one reason why 80 of small cap and 92% of large cap actively managed funds in Australia, according to a recent sector update by Morgan Stanley, are unable to keep pace with their benchmark, let alone decisively beat it.

There are plenty of examples to choose from. In the health care sector, far and away the best performing in Australia, plenty of funds preferred Healius (ASX:HLS) instead of the much more ‘expensive’ looking Cochlear (ASX:COH), ResMed (ASX:RMD) or CSL (ASX:CSL). Yet it's the ‘cheaper’ one out of these four that has, on balance, hardly performed on a five-year horizon.

Amongst REITs, one of the better-performing segments on the ASX, the likes of Goodman Group (ASX:GMG) have at times become the focus of short-positioning, but the share price consistently moved upwards, at least until the mini-correction in August this year.

Once upon a time, Goodman Group shares were highly sought after by income hungry retirees, but these days the shares only offer circa 2% forward looking. That can serve as an indication of how ‘expensive’ those shares have become.

Income-seeking investors have instead preferenced REITs such as Vicinity Centres (ASX:VCX), which still offers circa 6% yield. On the flip side, Vicinity shares have eroded some -23% since their peak in mid-2016 and have largely trended sideways throughout 2019 when most market indices added near 20%.

Amidst an ongoing tough outlook for industrials in Australia, the increasing number of profit warnings and negative market updates are accompanied by a reduction in the dividend for shareholders. There are predictions of a lower payout by Vicinity Centres in 2020, and, post the recent profit warning, Medibank Private's (ASX:MPL) FY20 dividend might be at risk too.

Cheap stocks might lag for good reason
Probably the most striking examples have come from the banking sector, in particular in Australia, prominently represented in investment portfolios. If it isn't because of the dividend appeal, it's because the sector remains by far the largest on the local stock exchange with all four majors plus Macquarie included in the ASX Top10.

In a recent strategy update on global banks, analysts at Citi offered the following warning for investors: Don't Buy Cheapest Banks.

Their motivation: "Pursuing a Value strategy within the global Bank sector has been an especially disastrous strategy. Cheap banks in Europe and Japan have got even cheaper. More expensive banks in the US have stayed expensive. We don't expect this valuation gap to mean-revert anytime soon."

In other words: when growth is elusive, and the pressure is on, investors should adjust their strategy and focus too. Cheap stocks might be lagging for good reasons.

With yield curves inverting for government bonds, economic momentum struggling and credit growth sluggish, banks globally have been lagging the bull market. Hence the recent reset in bond markets, whereby yield curves steepened, and triggered a renewed interest in bank shares around the world. This is part of the rotation into ‘value’ career professionals like to talk about.

But Citi analysts are not buying it. They argue valuations for bank shares should stay ‘cheap’ because the global economy remains weak and bond yields will remain low.

In Australia, it can be argued, bank shares are not particularly ‘cheap’, as they have benefited from the attraction of 5%-6% dividend yield. But they seem ‘cheap’ in comparison with stocks like Macquarie Group (ASX:MQG), Transurban (ASX:TCL) and Charter Hall (ASX:CHC). These stocks that have fully participated in the share market uptrend and contributed with gusto to pushing major indices to an all-time high this year.

Banking sector not all about yield
Yet, the October-November reporting season has left shareholders with a sour after-taste. All of Bank of Queensland (ASX:BOQ), Westpac (ASX:WBC) and National Australia Bank (ASX:NAB) announced a sizable reduction in their final dividends, while ANZ Bank (ASX:ANZ) kept it stable, but with -30% less franking. In a surprise move, Westpac raised extra capital too.

Little surprise, the local bank sector has been the worst performer of late. October delivered a general decline of -4.4% for the sector to keep the overall performance for the Australian market slightly in the negative for the month. In the words of UBS: "it appears the market is coming to terms with the outlook of decreased profitability from lower rates and increased capital requirements".

The higher yield (as implied by a ‘cheaper’ share price) does not make the better investment. It's usually the exact opposite.

Commbank (ASX:CBA) shares trade at a noticeable premium and its premium valuation is backed up by superior returns versus ‘The Rest’ over five, 10, 15 and 20 years. Occasionally, one of the laggards in the sector might experience a catch-up rally that temporarily pushes CBA into the shadows, but the two prize for consistency and performance in Australian banking are CBA and Macquarie.

This by no means implies there cannot be more negative news from CBA or the other banks. If investors want more evidence the ‘Golden Years’ for banking in Australia are now well and truly in the past, Morgan Stanley's research shows banks have noticeably underperformed five prolonged times since 2000, with two of the five periods occurring since April 2015.
.....
What the banks have once again shown to investors is that higher yield tends to correlate with higher risk. And that risk should not be solely measured in loss of capital. CBA shares have trended sideways since September 2015. Over that same period, shares in Macquarie have appreciated by some 75%.

For a slightly lower dividend yield on offer, backed by a superior growth profile, Australian income investors could have accumulated significantly better returns if only they weren't so afraid of paying a little more for it.

Where can cash be deployed in the share market?
So what is an investor to do who today is sitting on some cash, looking to be deployed in the share market?

My advice is to look for quality yield. What exactly defines quality yield? It's a dividend that is most likely to rise over multiple years ahead. Admittedly, such a proposition is probably not available at 5.5% or 6%, but then again, investors are less likely to find themselves confronted with capital erosion or a dividend cut further down the track.

Look for research that is not solely based upon ‘valuation’, relative or otherwise. Foe example, Morgan Stanley prefers ‘manufacturers’ over ‘collectors’ and ‘creators’ over ‘owners’, with the team labelling itself ‘selective with value’. Identified property sector favourites are Stockland (ASX:SGP), Goodman Group and Mirvac (ASX:MGR). Sector exposures to stay away from, even though they might look ‘cheap’, according to the team, include Scentre Group (ASX:SCG), Vicinity Centres and GPT (ASX:GPT).

Investors should note Morgan Stanley analysts agree with the view that owners of retail assets look ‘cheap’, but they still see shopping malls coming under pressure from both tenants and consumers.

Macquarie analysts have compared infrastructure stocks with utilities and AREITs and concluded utilities currently offer the superior total income profile, with infrastructure and AREITs both equal second. Risk-adjusted, Macquarie believes, infrastructure offers the highest potential return. AREITs are seen offering 'a balanced yield exposure'.

On Macquarie's projections, utilities such as AusNet Services (ASX:AST) and Spark Infrastructure (ASX:SKI) carry the highest income potential over the next three years, but they also come with the highest correlation with the broader share market (meaning: above average volatility in share prices). This is most likely because they offer little in terms of growth. It's all high yield.


https://www.firstlinks.com.au/article/focus...0ad48a-83781601



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
alonso
post Posted: Jun 19 2019, 08:19 AM
  Quote Post


Posts: 2,617
Thanks: 116


BFG is a good one atm but don't know about DRP because I never touch them anymore.



--------------------
"The optimist proclaims that we live in the best of all possible worlds. The pessimist fears this is true"

"What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom." Adam Smith
 
mullokintyre
post Posted: Jun 18 2019, 11:08 PM
  Quote Post


Posts: 2,632
Thanks: 940


In Reply To: early birds's post @ Jun 18 2019, 11:05 PM

I reckon JPM only picked those stocks cos they got a whole bunch at cheap prices and want to offload them.
Wouldn't trust the bastards as far as I could kick em.
Mick



--------------------
sent from my Olivetti Typewriter.

Said 'Thanks' for this post: early birds  
 
early birds
post Posted: Jun 18 2019, 11:05 PM
  Quote Post


Posts: 12,867
Thanks: 1471


In Reply To: nipper's post @ Jun 18 2019, 06:34 PM

i thought NAB'S yield is higher than ANZ's ----am i right??? unsure.gif

why the heck JPM didn't point out that?? because they've been shorting it ??? devilsmiley.gif




Said 'Thanks' for this post: mullokintyre  
 
nipper
post Posted: Jun 18 2019, 06:34 PM
  Quote Post


Posts: 7,298
Thanks: 2509


Australia's equity market is a tiny slice of the global equity pie: just 2.5 per cent of the developed world's total market capitalisation.

But if you restrict that total universe to include only stocks with dividend yields of at least 6 per cent, the ASX suddenly jumps to 12 per cent of the pie, according to JPMorgan.
QUOTE
the JPMorgan strategist highlights 10 stocks that should provide yields above 5.5 per cent over the next three years. To pass the screen, the dividend per share must be projected to grow over this period, based on the brokers' forecasts, with some share price gains also expected.

The companies (ranked from highest expected average yield) are: Fortescue Metals, Whitehaven Coal, Pendal Group, Westpac, Stockland, BHP, Vicinity Centres, Woodside Petroleum, GUD Holdings and ANZ.




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 

Featured Stock Stories





alonso
post Posted: Jun 24 2017, 02:28 PM
  Quote Post


Posts: 2,617
Thanks: 116


In Reply To: bam_bamm's post @ Jun 23 2017, 02:33 PM

I find this site a handy reference for upcoming divs:

http://www.marketindex.com.au/



--------------------
"The optimist proclaims that we live in the best of all possible worlds. The pessimist fears this is true"

"What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom." Adam Smith

Said 'Thanks' for this post: nipper  atleast16  rick001  
 
bam_bamm
post Posted: Jun 23 2017, 02:33 PM
  Quote Post


Posts: 3,724
Thanks: 585


Time to resurrect this thread. Capital returns are hard to come by in this market.

9% currently on offer in a junior gold producer. DRP also available to those who see ST, MT and LT value - ASX:SAU (Southern Gold Limited)






--------------------


 
nipper
post Posted: Oct 26 2016, 07:01 PM
  Quote Post


Posts: 7,298
Thanks: 2509


In Reply To: arty's post @ Oct 26 2016, 05:50 PM

very nice, arty; always amazed at how assiduous your approach is.

I've got access to similar, though am very wary of making decisions on trailing info. (apart from rule #126; If a company cuts its dividends, sell down; if it cuts its dividends twice, sell out) (and watch for underwritten dividends)

And, in a related matter, I am also amazed (in a different way) as to buying a label:
QUOTE
One of the most popular niche exchange traded funds in the market, the Vanguard Australian Shares High Yield ETF, had large exposure to the mining giants only for the stocks to slash dividends...

..Yields, which rise when share prices fall, can sometimes send false signals. And high yields, in the order of 7 per cent or more, send a different kind of signal altogether: it can mean the market has lost confidence in the company's ability to pay its dividend.

As with most ETFs similar in structure, Vanguard does not choose the underlying stocks. It replicates a specific index, in this case, the FTSE ASFA Australia High Dividend Yield Index, which oversees the companies that are rotated in and out with an emphasis on stocks commanding above-average forecast dividends. This Vanguard "master" fund has $1.56 billion of assets, of which is $686 million is accessed via ETF and the remainder as a conventional managed fund.

The fund is rebalanced twice a year, which means fees stay low because the manager is not trading with a high frequency. When BHP and Rio's share prices fell, they became eligible for the mix in June 2015. Their combined weighting went from 2 per cent to more than 20 per cent of the fund, according to Morningstar research. When their dividends were cut they fell out of consideration in the June 2016 rebalance and were reduced to a 4 per cent weighting. The ETF underperformed.

Almost 10 per cent of the ETF is in Wesfarmers and 7 per cent is in Commonwealth Bank of Australia. No single stock can exceed 10 per cent of the portfolio and no single sector can exceed 40 per cent.
- bet you most holders didn't look under the bonnet & read THAT small print. Low fees, yes. Underperformance, double yes



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
arty
post Posted: Oct 26 2016, 05:50 PM
  Quote Post


Posts: 13,078
Thanks: 3381


In Reply To: nipper's post @ Oct 26 2016, 03:41 PM

I've always been more of a Do-It-Yourselfer.
So, for ASX companies, I have written an Excel program (runs best and fastest under the old Office97) that lists all companies with their latest known dividend, then calculates the yield vs the latest Closing price.

I can run it over any watchlist, or the entire range. The rresult looks like below:

Attached File  YieldASX.png ( 228.15K ) Number of downloads: 42


(Scrolling to the right, there are more columns, displaying GICS Group and location as Australian Postcode or "O/seas")
I do charge a small license fee (discounted to $50 for ShareScene members) to protect my IP.



--------------------
I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)

Said 'Thanks' for this post: early birds  
 
 


3 Pages (Click to Jump) V   1 2 3 >

Back To Top Of Page
Reply to this topic


You agree through the use of ShareCafe, that you understand and accept the TERMS OF USE.


TERMS OF USE  -  CONTACT ADMIN  -  ADVERTISING