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Primary Health Properties Q1 Trading Update posted on Company News Board.

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Gengulphus
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411596

Postby Gengulphus » May 13th, 2021, 11:07 am

Arborbridge wrote:
Dod101 wrote:Thanks Ian. This seems to me to be a nice little company with an almost guaranteed rental income stream and 4.2% is fine by me. In fact it has to be an ideal hold for dedicated HYPers.

An ideal "hold", but not necessarily an ideal "buy" or "add" ;) I doubt it would qualify for a HYP purchase using the well known method for selecting HYP shares which PYAD laid down years ago.

I've just done a quick 'finger in the air' exercise about that: I looked up PHP's yield on dividenddata, which gives it as 4.05%. Then I looked at its tables of FTSE100 and FTSE250 yields, sorted in descending order of dividend yield - they contained 56 companies with yields of 4.05% or above. Of those, 21 had market caps below £1.5b, the threshold pyad used when selecting HYP1. That left 35 companies, and I've eliminated two more (CTY and MYI) because I know they're off-topic ITs on this board, leaving 33 companies which I've sorted by their sectors according to dividenddata:

Closed End Investments (HICL, INPP, SEQI, TRIG, UKW)
Investment Banking and Brokerage Services (ASHM, EMG, IGG, MNG, SLA)
Gas, Water and Multi-utilities (NG., SVT, UU.)
Industrial Metals and Mining (BHP, EVR, RIO)
Life Insurance (AV., LGEN, PHNX)
Electricity (DRX, SSE)
Non-life Insurance (ADM, DLG)
Tobacco (BATS, IMB)
Aerospace and Defense (BA.)
Household Goods and Home Construction (PSN)
Oil, Gas and Coal (BP.)
Personal Care, Drug and Grocery Stores (SBRY)
Pharmaceuticals and Biotechnology (GSK)
Precious Metals and Mining (POLY)
Real Estate Investment Trusts (PHP)
Telecommunications Service Providers (VOD)

Would PHP be chosen as one of a 15-share HYP chosen out of that lot by pyad's "look at the highest-yielding share, checking its dividend sustainability and sector diversification; if it doesn't pass, move on to the next highest-yielding share" method? Against it is the fact that it's the lowest-yielding of the 33; for it is the fact that it's the only REIT or property company in the list and that there are only 16 sectors in the list, so most of them are going to have to be present in a 15ish-sector HYP. Adding a bit of uncertainty are the facts that the HYPer might not want to use historical yields and/or dividenddata's sectors (there are definitely arguments for regarding the two mining sectors as one, the two insurance sectors as one and/or the two utilities sectors as one, though it's up to the HYPer whether they find those arguments persuasive). And I haven't done the detailed checks on dividend sustainability, nor am I going to: this is a 'finger in the air' exercise, not a full HYP selection!

The net result is that while I'm by no means certain that PHP would be selected, it seems quite plausible to me that it would.

A final note: my own HYP is not currently in need of another REIT holding, so I'm not going to consider PHP for a purchase - but the reasons why not are to do with the state of my HYP, not the state of the company!

Gengulphus

MDW1954
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411598

Postby MDW1954 » May 13th, 2021, 11:09 am

If I may jump in here... I was buying heavily into PHP back in very early 2018, when the shares were changing hands at around 110p. (They're now 30% higher.)

Back then, it most assuredly *was* a HYP share, on any basis, with a very decent yield.

With a reliable income coming more or less directly from the government, a long history of dividend increases, and a modern, in-demand estate -- what on earth isn't there to like right now, though -- even at today's price? I agree with Dod on this.

MDW1954

Itsallaguess
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411601

Postby Itsallaguess » May 13th, 2021, 11:16 am

MDW1954 wrote:
With a reliable income coming more or less directly from the government, a long history of dividend increases, and a modern, in-demand estate -- what on earth isn't there to like right now, though?


Stories like this?

GPs told to screen patients online first -

Doctors have been told to discourage patient appointments in person to promote the use of virtual consultations.

New NHS guidance instructs family GPs to embed a system of “total triage”, meaning that anyone seeking to see their doctor must first have a discussion online or by telephone.

It makes clear that anyone deemed by a doctor to require a face-to-face consultation should still receive one, but says that about a third of all patients’ requests can be dealt with using online messaging...


https://www.telegraph.co.uk/news/2021/05/12/exclusive-gps-told-stop-seeing-patients-face-to-face/

Cheers,

Itsallaguess

Gengulphus
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411606

Postby Gengulphus » May 13th, 2021, 11:28 am

Dod101 wrote:PHP is a REIT that has an income stream mostly paid directly to it from the UK Government ...

I consider that a fairly significant danger sign in a HYP candidate. For the reasons why, see Firstgroup and Carillion...

More generally, I ideally want the companies I'm invested in to have well-diversified sources of income.

Dod101 wrote:... and which has received its income without a ripple throughout the pandemic ...

Agreed that PHP has done that - but the risk produced by PHP's largely undiversified income stream is likely to occur at a time when a government feels it can try to make economies in health spending with relatively little political risk. During a pandemic is probably about as far as one can possibly get from that!

Gengulphus

Dod101
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411610

Postby Dod101 » May 13th, 2021, 11:36 am

Itsallaguess wrote:
MDW1954 wrote:
With a reliable income coming more or less directly from the government, a long history of dividend increases, and a modern, in-demand estate -- what on earth isn't there to like right now, though?


Stories like this?

GPs told to screen patients online first -

Doctors have been told to discourage patient appointments in person to promote the use of virtual consultations.

New NHS guidance instructs family GPs to embed a system of “total triage”, meaning that anyone seeking to see their doctor must first have a discussion online or by telephone.

It makes clear that anyone deemed by a doctor to require a face-to-face consultation should still receive one, but says that about a third of all patients’ requests can be dealt with using online messaging...


https://www.telegraph.co.uk/news/2021/05/12/exclusive-gps-told-stop-seeing-patients-face-to-face/

Cheers,

Itsallaguess


I disagree. That may relieve some pressure on some surgeries but I do not think or expect that it will cause any GP practices to think of giving up space. In any case most are committed to taking the space they have for some time to come. In the short term with social distancing many could probably do with more space not less. There are also other tenants available, pharmacies and community nurses for two and the pressure to do more nursing and medical work based in the community rather than at hospitals. I would rather hold PHP than say British Land.

Dod

tjh290633
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411621

Postby tjh290633 » May 13th, 2021, 12:03 pm

Dod101 wrote:
Itsallaguess wrote:
MDW1954 wrote:
With a reliable income coming more or less directly from the government, a long history of dividend increases, and a modern, in-demand estate -- what on earth isn't there to like right now, though?


Stories like this?

GPs told to screen patients online first -

Doctors have been told to discourage patient appointments in person to promote the use of virtual consultations.

New NHS guidance instructs family GPs to embed a system of “total triage”, meaning that anyone seeking to see their doctor must first have a discussion online or by telephone.

It makes clear that anyone deemed by a doctor to require a face-to-face consultation should still receive one, but says that about a third of all patients’ requests can be dealt with using online messaging...


https://www.telegraph.co.uk/news/2021/05/12/exclusive-gps-told-stop-seeing-patients-face-to-face/

Cheers,

Itsallaguess


I disagree. That may relieve some pressure on some surgeries but I do not think or expect that it will cause any GP practices to think of giving up space. In any case most are committed to taking the space they have for some time to come. In the short term with social distancing many could probably do with more space not less. There are also other tenants available, pharmacies and community nurses for two and the pressure to do more nursing and medical work based in the community rather than at hospitals. I would rather hold PHP than say British Land.

Dod

Our local Health Centre has more people than offices available. Some of the GPs time share, some of the nurses cover all three locations, but others occupy their rooms when they are not on site, another NHS Trust occupies rooms for District Nurses, etc.

They are not going to be doing the on-line consultancy and telephone consultations from home, although that may be possible. I have used our eConsult service, which works fine. What has been missing is the face-to-face appointments for regular reviews of diabetes and asthma, but blood tests have been done on site. In these cases, telephone consulations and reviews are not adequate. They cannot tickle your feet, for example, to check on neuropathy. The Practice Manager tells me that the incidence of mental health problems is growing. This is among both patients and staff.

Prescription renewals can be done on line or delegated to the local pharmacy, who also do regular reviews face-to-face, if they catch you.

My personal holding of REITs is SGRO, BLND and PHP. Essentially warehousing, office and retail, and health centres. As Dod says, BLND is the one with a question mark, but they tend to have prime properties, so hopefully the restoration of dividends will bring their yield back into line. SGRO has been buoyant, and its yield therefore low, although the dividend keeps increasing. I have taken profits twice in recent years.

Time will tell.

TJH

Dod101
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411632

Postby Dod101 » May 13th, 2021, 12:20 pm

Agree TJH. Segro is another of my holdings and it has as you say, done remarkably well. A bit like BT though, I have never been able to make any money out of Land Secs or British Land but of course they are large well established companies with plenty of resources so should be OK.

dod

Arborbridge
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411635

Postby Arborbridge » May 13th, 2021, 12:23 pm

Dod101 wrote:I am not sure that I understand that logic either. If you are intending to hold it indefinitely and it is a good share in every sense, then to quote the master of HYP, 'the time to buy is now'.
Dod



Sorry to labour the point, but I must refer you to Gengulphus's excellent post describing the "normal" method of choosing HYP shares. You cannot just pick one thing he said "the time to buy is now" to demonstrated to me that PHP is a HYP buy. You must apply the whole process as Gengulphus describes. PHP comes out as the lowest yielder in the stack, and the conclusion is that it may or may not be a choice for a new HYP.

When looking at a mature HYP (which many readers here would have) they will have a different perspective in that the may well already have an average yield of around 5%, so they would be judging the suitability of any new share against that criterion. Again, I believe the conclusion would be that PHP teeters on being half in and half out as a candidate. Then a certain amount of rationalisation is required as regards to whether you believe the dividend is safer than some other share yielding more (doubt has already been cast on that relative reliability in this thread). There would need to be a cogent argument why one should promote a lower yield sahre above some of the other excellent candidates - I expect we can all think of half a dozen of the top of our heads.

Arb.

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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411641

Postby monabri » May 13th, 2021, 12:39 pm

Where PHP has "scored" in the last 5 years ( well, since Jan 19 *) is by shareprice increase, thus the income has not been expensively bought ( I could readily produce graphs to illustrate but it would be outside of HYP guidelines - This touches on the last point made by Arb.)


( * why PHP became popular might be ( ?) as a result of Brexit concerns and investors looking for a safe(r) income...dunno...a guess!)


Edit...p.s. I have the graphs already! ;)

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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411648

Postby dealtn » May 13th, 2021, 1:14 pm

Arborbridge wrote: You must apply the whole process as Gengulphus describes. PHP comes out as the lowest yielder in the stack, and the conclusion is that it may or may not be a choice for a new HYP.

...

There would need to be a cogent argument why one should promote a lower yield sahre above some of the other excellent candidates - I expect we can all think of half a dozen of the top of our heads.

Arb.


I'm not an investor for (dividend) income, and certainly not a HYPper, but what would worry me about a prescriptive selection model, and one reason why I would potentially "promote a lower yield share above some of the other excellent candidates" is the "whole process as Gengulphus describes" above is based on historic yields. Particularly at the moment when history looks significantly different to the likely future using historic data would be worrying (to me).

Of course the availability of that data, and the ease of use compared to (estimated) future data, is a benefit, particularly to those "Dorisian" in their comfort with using such things.

moorfield
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411653

Postby moorfield » May 13th, 2021, 1:30 pm

A £1.5bn market cap in 2000 should perhaps be adjusted in line with inflation, to ~£2.6bn today, which would settle the question and filter out PHP as a candidate.

Arborbridge
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Re: Primary Health Properties Q1 Trading Update posted on Company News Board.

#411656

Postby Arborbridge » May 13th, 2021, 1:41 pm

dealtn wrote:
Arborbridge wrote: You must apply the whole process as Gengulphus describes. PHP comes out as the lowest yielder in the stack, and the conclusion is that it may or may not be a choice for a new HYP.

...

There would need to be a cogent argument why one should promote a lower yield sahre above some of the other excellent candidates - I expect we can all think of half a dozen of the top of our heads.

Arb.


I'm not an investor for (dividend) income, and certainly not a HYPper, but what would worry me about a prescriptive selection model, and one reason why I would potentially "promote a lower yield share above some of the other excellent candidates" is the "whole process as Gengulphus describes" above is based on historic yields. Particularly at the moment when history looks significantly different to the likely future using historic data would be worrying (to me).

Of course the availability of that data, and the ease of use compared to (estimated) future data, is a benefit, particularly to those "Dorisian" in their comfort with using such things.


Gengulphus's example used historic yields, but in practice I would decide using forecasts yields - which, BTW, are becoming more reliable now (as far as we can tell :lol: )

Arb.


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