Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to Howard,Bhoddhisatva,penym,Anonymous,Rhyd6, for Donating to support the site

Projected dividends

Practical discussions about equity High-Yield Portfolios (HYP) for income
Forum rules
Tight HYP discussions only please - OT please discuss in strategies
Wizard
Lemon Quarter
Posts: 4170
Joined: November 7th, 2016, 8:22 am
Been thanked: 545 times

Re: Projected dividends

#293881

Postby Wizard » March 25th, 2020, 6:40 am

miner1000 wrote:
Dod101 wrote:
It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod


I did not want to call anyone out, but it was in the 4th post of this thread.

Miner

I almost certainly mess up on using these two incorrectly at times. But I know how these things get into your head and then really grate. I often find myself screaming at the TV when somebody uses 'less' when it should be 'fewer'.

Dod101
Lemon Quarter
Posts: 4951
Joined: October 10th, 2017, 11:33 am
Has thanked: 1030 times
Been thanked: 1890 times

Re: Projected dividends

#293883

Postby Dod101 » March 25th, 2020, 7:05 am

miner1000 wrote:
Dod101 wrote:
It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod


I did not want to call anyone out, but it was in the 4th post of this thread.

Miner


Happy it wisnae me!

Dod

Wizard
Lemon Quarter
Posts: 4170
Joined: November 7th, 2016, 8:22 am
Been thanked: 545 times

Re: Projected dividends

#294056

Postby Wizard » March 25th, 2020, 2:27 pm

I have just updated the list of cancelled / suspended / cut dividends. Not many cuts, I think pretty much everything so far has been a total wipe out of dividends. We have reached the unfortunate benchmark of 10% of the FTSE100 announcing the next dividend is cancelled. The proportion of FTSE250 is lower, but it is more likely we have missed some of those and the percentage of those companies that paid dividends is of course lower to start with.

Not good for income strategies. I have a feeling this could be the stiffest test HYP has had in respect of income reduction.

88V8
Lemon Slice
Posts: 753
Joined: November 4th, 2016, 11:22 am
Has thanked: 88 times
Been thanked: 163 times

Re: Projected dividends

#294226

Postby 88V8 » March 25th, 2020, 8:00 pm

Wizard wrote:I have a feeling this could be the stiffest test HYP has had in respect of income reduction.

Post-08, drops of 40-50%.
Luni started a thread Do Cutters Come Again, to illustrate the (rather long) time to dividend recovery.

I expect a faster recovery after C19, the question for me is whether BoDs will be happy to run such low cover in future, and therefore whether we will see former divi levels resumed....rebase rebase.
Hope Shell continues shelling out, or we're doomed :o

V8

ReallyVeryFoolish
Lemon Slice
Posts: 281
Joined: October 5th, 2019, 12:06 pm
Has thanked: 209 times
Been thanked: 123 times

Re: Projected dividends

#294311

Postby ReallyVeryFoolish » March 26th, 2020, 5:08 am

I have a small basket of high yielding shares and so far, my holdings have not declared any adjustments to dividends. Yet. The one share I hold that I think might soon join the cutters list is Petrofac. It did previously cut after the SFO investigation was launched. That's when I bought. I think in order to hedge a potential fine. However, if that money is still sitting in the company, might that temporarily support the present dividend until things improve? Or is it a forlorn hope and business is so bad that they will cut anyway? I guess we will soon find out.

Arborbridge
Lemon Quarter
Posts: 4121
Joined: November 4th, 2016, 9:33 am
Has thanked: 823 times
Been thanked: 1343 times

Re: Projected dividends

#294323

Postby Arborbridge » March 26th, 2020, 7:35 am

Wizard wrote:I have just updated the list of cancelled / suspended / cut dividends. Not many cuts, I think pretty much everything so far has been a total wipe out of dividends. We have reached the unfortunate benchmark of 10% of the FTSE100 announcing the next dividend is cancelled. The proportion of FTSE250 is lower, but it is more likely we have missed some of those and the percentage of those companies that paid dividends is of course lower to start with.

Not good for income strategies. I have a feeling this could be the stiffest test HYP has had in respect of income reduction.


I've just been lucky so far. My only disaster is quite a big payer: Persimmon. Morrisons, Marks, Go-Ahead Group, were all sold in former times.

It's only a matter of time before I get some serious erosion of income, I believe. And of my other income streams, I am sure that I will have to carry defaults from tenants so I'm squeezed from both sides. Still, with State pension, ITs, income reserve - and the wife(!) - the household should be OK.

Whether this is going to be a stiffer test than 2007-8, we shall see. Someone did comment that the past ten years austerity have been nothing to what's coming in view of all the borrowing HMG is clocking up.

Arb.

Golam
Posts: 12
Joined: August 11th, 2019, 9:35 pm
Has thanked: 29 times
Been thanked: 6 times

Re: Projected dividends

#294325

Postby Golam » March 26th, 2020, 7:43 am

Topical item in today's FT. 'High dividend stocks suffer as companies delay AGMs'

monabri
Lemon Quarter
Posts: 3719
Joined: January 7th, 2017, 9:56 am
Has thanked: 425 times
Been thanked: 1091 times

Re: Projected dividends

#294326

Postby monabri » March 26th, 2020, 7:45 am

ReallyVeryFoolish wrote:I have a small basket of high yielding shares and so far, my holdings have not declared any adjustments to dividends. Yet. The one share I hold that I think might soon join the cutters list is Petrofac. It did previously cut after the SFO investigation was launched. That's when I bought. I think in order to hedge a potential fine. However, if that money is still sitting in the company, might that temporarily support the present dividend until things improve? Or is it a forlorn hope and business is so bad that they will cut anyway? I guess we will soon find out.


I agree regarding the likelihood of a cut at PFC and the reason for the last cut. The only temper to this is that the Asfari family own a large chunk of PFC ( 18% ?) and they may try to maintain a dividend, albeit much reduced.

Wizard
Lemon Quarter
Posts: 4170
Joined: November 7th, 2016, 8:22 am
Been thanked: 545 times

Re: Projected dividends

#294340

Postby Wizard » March 26th, 2020, 8:28 am

monabri wrote:
ReallyVeryFoolish wrote:I have a small basket of high yielding shares and so far, my holdings have not declared any adjustments to dividends. Yet. The one share I hold that I think might soon join the cutters list is Petrofac. It did previously cut after the SFO investigation was launched. That's when I bought. I think in order to hedge a potential fine. However, if that money is still sitting in the company, might that temporarily support the present dividend until things improve? Or is it a forlorn hope and business is so bad that they will cut anyway? I guess we will soon find out.


I agree regarding the likelihood of a cut at PFC and the reason for the last cut. The only temper to this is that the Asfari family own a large chunk of PFC ( 18% ?) and they may try to maintain a dividend, albeit much reduced.

I think the PFC dividend is toast. Oil companies are no doubt cutting costs like crazy and that is going to hit PFC very hard. In the case of PFC it is not the dividend I am worried about, it is the survival of the company.

Golam
Posts: 12
Joined: August 11th, 2019, 9:35 pm
Has thanked: 29 times
Been thanked: 6 times

Re: Projected dividends

#294342

Postby Golam » March 26th, 2020, 8:32 am

Further topical item from today's FT ' Income Investors face dividend drought'

moorfield
Lemon Quarter
Posts: 1798
Joined: November 7th, 2016, 1:56 pm
Has thanked: 441 times
Been thanked: 474 times

Re: Projected dividends

#294430

Postby moorfield » March 26th, 2020, 12:10 pm

Wizard wrote:Not good for income strategies. I have a feeling this could be the stiffest test HYP has had in respect of income reduction.


Well capital gains and dividends are fungible no? And I don't think it is O/T to discuss that because I suspect (from what I've read) that many here are timing/buying at bargain prices, and may be tinkering away gains in future. They certainly cannot be buying for sustainable and rising dividends over the next 12-36 months, if the direction of travel of the Cut Dividends thread is any yardstick to go by.

It also raises the question of cash reserve, ie. how much is enough, on the average, to ride out a bear market?

Dod101
Lemon Quarter
Posts: 4951
Joined: October 10th, 2017, 11:33 am
Has thanked: 1030 times
Been thanked: 1890 times

Re: Projected dividends

#294438

Postby Dod101 » March 26th, 2020, 12:20 pm

moorfield wrote:
Wizard wrote:Not good for income strategies. I have a feeling this could be the stiffest test HYP has had in respect of income reduction.


Well capital gains and dividends are fungible no? And I don't think it is O/T to discuss that because I suspect (from what I've read) that many here are timing/buying at bargain prices, and may be tinkering away gains in future. They certainly cannot be buying for sustainable and rising dividends over the next 12-36 months, if the direction of travel of the Cut Dividends thread is any yardstick to go by.

It also raises the question of cash reserve, ie. how much is enough, on the average, to ride out a bear market?


The trouble is that a bear market is not necessarily the same as one not paying dividends although of course they are usually related. I guess the real question is how long after the economy more or less normalises will it take for businesses to rebuild their reserves/financial positions so as to be able to start paying dividends again.

Dod

Bouleversee
Lemon Quarter
Posts: 2591
Joined: November 8th, 2016, 5:01 pm
Has thanked: 531 times
Been thanked: 368 times

Re: Projected dividends

#294446

Postby Bouleversee » March 26th, 2020, 12:44 pm

It's not just the high yielding companies which are cutting/suspending. My old stalwart, James Fisher and Sons, are doing so and I shall be surprised if my dividend income is not reduced by considerably more than 50% this year as the number of suspensions increases by the day. Fortunately, I do not depend on it and have accessible cash reserves. God help those who don't. If everyone starts selling in order to get the necessary cash, won't the stock market be shut down like a fund is whenever everyone is trying to sell? I don' think we have seen the half of it yet.

kempiejon
Lemon Quarter
Posts: 1366
Joined: November 5th, 2016, 10:30 am
Has thanked: 5 times
Been thanked: 330 times

Re: Projected dividends

#294451

Postby kempiejon » March 26th, 2020, 1:01 pm

moorfield wrote:Well capital gains and dividends are fungible no? And I don't think it is O/T to discuss that because I suspect (from what I've read) that many here are timing/buying at bargain prices, and may be tinkering away gains in future. They certainly cannot be buying for sustainable and rising dividends over the next 12-36 months, if the direction of travel of the Cut Dividends thread is any yardstick to go by.

It also raises the question of cash reserve, ie. how much is enough, on the average, to ride out a bear market?


Yes a good test I feel, my cash reserve is 3 years of income. So a 50% cut that recovers over 3 years won't wipe out my cash but when will I be able to start building it up afterwards? As for buying now I'm looking at collectives to mop up dividends, but I was expecting to throw another ISA allowance at the HYP, starting in April/May I think I'll let that slide for a bit. Come Christmas time I wonder how may HYPable shares there'll be? HIgh yield with 5 years of rising dividends and an eye on the debt? It might show some unusual suspects.

dealtn
Lemon Slice
Posts: 509
Joined: November 21st, 2016, 4:26 pm
Has thanked: 19 times
Been thanked: 218 times

Re: Projected dividends

#294467

Postby dealtn » March 26th, 2020, 1:49 pm

Bouleversee wrote:It's not just the high yielding companies which are cutting/suspending. My old stalwart, James Fisher and Sons, are doing so and I shall be surprised if my dividend income is not reduced by considerably more than 50% this year as the number of suspensions increases by the day. Fortunately, I do not depend on it and have accessible cash reserves. God help those who don't. If everyone starts selling in order to get the necessary cash, won't the stock market be shut down like a fund is whenever everyone is trying to sell? I don' think we have seen the half of it yet.


Well not "everyone" will be selling as not "everyone" wants, or needs, an income from their investments.

Even if they did, assuming a say 5% yield requirement, that would be "everyone" selling 1/20th of their portfolio spread over a year. Even in distressed times there is plenty of liquidity to accommodate that. So I wouldn't worry (at least on that score).

Wizard
Lemon Quarter
Posts: 4170
Joined: November 7th, 2016, 8:22 am
Been thanked: 545 times

Re: Projected dividends

#294477

Postby Wizard » March 26th, 2020, 2:22 pm

moorfield wrote:
Wizard wrote:Not good for income strategies. I have a feeling this could be the stiffest test HYP has had in respect of income reduction.


Well capital gains and dividends are fungible no? And I don't think it is O/T to discuss that because I suspect (from what I've read) that many here are timing/buying at bargain prices, and may be tinkering away gains in future. They certainly cannot be buying for sustainable and rising dividends over the next 12-36 months, if the direction of travel of the Cut Dividends thread is any yardstick to go by.

It also raises the question of cash reserve, ie. how much is enough, on the average, to ride out a bear market?

I'm not calling this O/T, but I certainly would not call it HYP.

Wizard
Lemon Quarter
Posts: 4170
Joined: November 7th, 2016, 8:22 am
Been thanked: 545 times

Re: Projected dividends

#294485

Postby Wizard » March 26th, 2020, 2:40 pm

Wizard wrote:
IanTHughes wrote:
Recent Dividend History |      |           |           |         |           |           |    
Company | EPIC | Year End | Div'd CCY | GBP | Change | Div'd CCY | GBP
Vodafone Group | VOD | 31-Mar-19 | -40.28% | -40.35% | Increase | 11 | 13
IG Group Holdings | IGG | 31-May-19 | 0.00% | 0.00% | Unchanged | 6 | 4
Standard Life Aberdeen | SLA | 31-Dec-19 | 0.00% | 0.00% | Decrease | 2 | 2
Aviva | AV | 31-Dec-19 | 3.00% | 3.00% | | |
Imperial Brands | IMB | 30-Sep-19 | 10.00% | 10.00% | | |
WPP | WPP | 31-Dec-19 | 0.00% | 0.00% | | |
HSBC Holdings | HSBA | 31-Dec-19 | 0.00% | 6.87% | | |
ITV | ITV | 31-Dec-19 | -67.50% | -67.50% | | |
Royal Dutch Shell | RDSB | 31-Dec-19 | 0.00% | 1.88% | | |
BP | BP | 31-Dec-19 | 1.23% | 4.04% | | |
Land Securities Group | LAND | 31-Mar-19 | 3.05% | 3.05% | | |
British Land Company | BLND | 31-Mar-19 | 3.06% | 3.06% | | |
BHP Group | BHP | 30-Jun-19 | 12.71% | 18.95% | | |
Pennon Group | PNN | 31-Mar-19 | 6.40% | 6.40% | | |
GlaxoSmithKline | GSK | 31-Dec-19 | 0.00% | 0.00% | | |
BAE Systems | BA | 31-Dec-19 | 4.50% | 4.50% | | |
DS Smith | SMDS | 30-Apr-19 | 10.20% | 12.81% | | |
Carnival Corporation | CCL | 30-Nov-19 | 2.56% | 6.10% | | |
Ibstock | IBST | 31-Dec-19 | 54.74% | 54.74% | | |

...
Therefore, for now at least, I believe that your forecast of a 50% drop in income is unduly pessimistic, for this portfolio at least...

For what it is worth, of those I would suggest the following as likely cutters or suspenders:
Aviva - claims impact (cut)
WPP - reduced marketing /advertising spend by clients (suspend)
BP - they do not have Shell's epic record to maintain and revenues must have gone off a cliff (cut)
Land Securities - REIT rules have an impact but revenue must be reduced (cut)
British Land - REIT rules have an impact but revenue must be reduced (cut)
BHP - must be lower demand from industrial customers (cut)
BAE Systems - impact on civil business (though not as bad as for Meggitt) (cut)
Carnival - not even sure the company will survive in its current form (suspend)
Ibstock - reduced demand for products due to house building slowing dramatically (cut)

OK, so three days on I appear to have been rather too optimistic on Ibstock. British Land may make some of its current suspension up depending on how it deals with REIT rules, but Land Securities must look more likely than ever to cut now IMHO.

tjh290633
Lemon Quarter
Posts: 4291
Joined: November 4th, 2016, 11:20 am
Has thanked: 304 times
Been thanked: 1559 times

Re: Projected dividends

#294523

Postby tjh290633 » March 26th, 2020, 5:02 pm

moorfield wrote:Well capital gains and dividends are fungible no? And I don't think it is O/T to discuss that because I suspect (from what I've read) that many here are timing/buying at bargain prices, and may be tinkering away gains in future. They certainly cannot be buying for sustainable and rising dividends over the next 12-36 months, if the direction of travel of the Cut Dividends thread is any yardstick to go by.

Capital losses and dividends are certainly not fungible. It surely makes sense to invest in what you consider to be the most reliable payers of dividends.

TJH

Bouleversee
Lemon Quarter
Posts: 2591
Joined: November 8th, 2016, 5:01 pm
Has thanked: 531 times
Been thanked: 368 times

Re: Projected dividends

#294526

Postby Bouleversee » March 26th, 2020, 5:09 pm

Perhaps we could have another list showing the few who have confirmed they will definitely be paying their dividends. I can't think of any of mine which have done so offhand.

moorfield
Lemon Quarter
Posts: 1798
Joined: November 7th, 2016, 1:56 pm
Has thanked: 441 times
Been thanked: 474 times

Re: Projected dividends

#294535

Postby moorfield » March 26th, 2020, 5:40 pm

tjh290633 wrote:
moorfield wrote:Well capital gains and dividends are fungible no? And I don't think it is O/T to discuss that because I suspect (from what I've read) that many here are timing/buying at bargain prices, and may be tinkering away gains in future. They certainly cannot be buying for sustainable and rising dividends over the next 12-36 months, if the direction of travel of the Cut Dividends thread is any yardstick to go by.

Capital losses and dividends are certainly not fungible. It surely makes sense to invest in what you consider to be the most reliable payers of dividends.

TJH


I wrote capital gains, not losses, and my point being I believe some have buys discussed here have been motivated by bargain prices rather than reliable dividends, in the short/medium term at least. I think the most reliable payers of dividends over these timescales will be collective ITs, which is what I'll be investing for the rest of the year.


Return to “High Yield Portfolios (HYP) - Practical”

Who is online

Users browsing this forum: carioca, MSN [Bot] and 9 guests