Bailing out of BT. but what to buy?...

[Dod101]

If someone had thought BT. was a great buy with a good divi record at Xp why on earth are they selling at 0.5Xp?

GS

It's quite simple. Shares in BT Group (LSE:BT) will not pay any more dividends for 2019–20. Dividends have been cut to zero for 2020–21. 'Why on earth' can they be considered a High Yield Share?...

And of course the outlook may well have changed in the meantime.

Dod

[teecee90]

I’m not selling anything but am buying plenty ....

[idpickering]

I’m not selling anything but am buying plenty ....

The shortest post in this thread, but probably the most apt for this board!

Ian.

[GoSeigen]

If someone had thought BT. was a great buy with a good divi record at Xp why on earth are they selling at 0.5Xp?

GS

It's quite simple. Shares in BT Group (LSE:BT) will not pay any more dividends for 2019–20. Dividends have been cut to zero for 2020–21. 'Why on earth' can they be considered a High Yield Share?...

And of course the outlook may well have changed in the meantime.

It doesn't mean you sell. Cut dividends is the quid pro quo for high and rising dividends. It's to be expected. If you sell you lose the exposure to recovery, and at a price where your expected return is double what it previously was. This HYP101, dod101.

GS

[GoSeigen]

This is not even remotely HYP. The whole point of HYP is that you never sell
GS

Moderator Message:
Hi GS. This is not helpful. There is nothing in the new HYP Guidelines that you says you must "never sell". In fact, it explicitly states that shares can sometimes be sold. Let's have a bit of live and let live.

It is acknowledged that individual HYP investors may from time to time see the need to sell individual HYP stocks

Thanks
Clariman

It wasn't individual stocks. It was a whole list of stocks. And all at the same time. And the idea was to replace them with other stocks. But if you say I'm still wrong here then I put my hands up: I know nothing about pyad's strategy and shall shut up.


GS

[Arborbridge]

This is not even remotely HYP. The whole point of HYP is that you never sell
GS

Moderator Message:
Hi GS. This is not helpful. There is nothing in the new HYP Guidelines that you says you must "never sell". In fact, it explicitly states that shares can sometimes be sold. Let's have a bit of live and let live.

It is acknowledged that individual HYP investors may from time to time see the need to sell individual HYP stocks

Thanks
Clariman

In a peculiar way, both are correct. GS is correct in that the basis of HYP is never to sell or at least only in very rare circumstances. Clariman is also quite correct about the guidelines - and it's his board!. However, here we have an uncomfortable divergence between what HYP is and what HYP-P requires - though I guess we can easily live with the difference.
Provided we understand that some people are trying to go by HYP guidelines, and some are following HYP-P guielines - and tolerate our individual differences and where we are coming from. That's why GS's comment didn't strike me a being odd at all, or need correction - it was just an affirmation of how he sees HYP and as such quite reasonable.

Arb.

[Dod101]

It doesn't mean you sell. Cut dividends is the quid pro quo for high and rising dividends. It's to be expected. If you sell you lose the exposure to recovery, and at a price where your expected return is double what it previously was. This HYP101, dod101.

GS

I don't want to make too much of this but I would not advocate selling any share just because it cut its dividend especially if it were arising solely from the Covid virus. BT deserves to be sold all on its own without any help from Covid. It is not as bad as Centrica (probably) but it always seems to be going through some restructuring or other and so it is today. I do not hold it so am not that interested in it but as I recall, the dividend cut was at least as much to do with the current planned restructuring as with Covid. It just does not seem to know where it is going and if it does not know there is not much chance of getting there. The regulator is not much better. And of course there is that pension fund deficit.

Dod

[Breelander]

Thinking of divesting my holding of BT in my HYP following it’s suspension of divis...

In case you hadn't spotted it, there's now reply on the Strategies board too....

...as I cannot post there under the guidelines I have to split the thread in order to respond...

viewtopic.php?f=31&t=24067

[floyd3592]

Sorry, but I can't start to answer this...

Why not? Because you haven't told me what else is in your HYP! Diversification is an important aspect of the comparative (*) safety of HYP dividend income

Of course diversification is important and I feel I am diversified but don't mind easing diversification limits in such unusual times to try and maintain dividends. My question was of those other shares that have taken a big capital hit which of them would be worth ditching BT for (if any).

Thanks for taking the time to respond it is appreciated!

Regards
Floyd

[floyd3592]

In case you hadn't spotted it, there's now reply on the Strategies board too....

...as I cannot post there under the guidelines I have to split the thread in order to respond...

viewtopic.php?f=31&t=24067[/quote]

Thanks for pointing this out I've replied over there.

Regards
Floyd

[Itsallaguess]

Or are there any other candidates who’s share price has dropped lately but might be a better home for my dosh?

Here's a list of FTSE100 components, grouped by sector and then ordered per sector by Forecast Yield, and shown with percentage price-performance for the past 6 months.

I've only dip-checked the data, and clearly at this time any 'Forecast Yield' information should be used as 'initial guidance' only, prompting much closer scrutiny by anyone wishing to use this data for any potential purchasing-decisions, but even with those caveats, I hope you find it useful as an initial kick-off point..

Cheers,

Itsallaguess

[Clariman]

Moderator Message:
Reference has been made to pyad and who knows his rules best. I certainly don't profess to know them and have never communicated with him. But that's not the point. These are old battles and old arguments which need to be consigned to the past. This site has a carefully thought out set of Guidelines for the present and the future. For some people they are too loose and not enough 'pyadic'. For others they are too tight and restrictive. They are meant to be balanced so please judge things based on these new guidelines not what you think they should be nor what they might have been in the past. Thank you.

[Dod101]

IAAG

I hope you have not spent hours compiling that table because the forecast yields are meaningless in the current investment climate, and I certainly would counsel anyone to treat it with great circumspection. IAG at 4.8%? I'll have some of that but the company could be bankrupt before it pays out or I could. HSBC at 2.5%? Where does that come from? It is frankly of no use for anyone surely?

With respect, I produced a list of companies in the FTSE100 which at the time were still paying dividends and I would suggest that that might be a better place to start or of course earlier in the day, GS and I suggested financials as a place to start, and named a few.

Dod

[Itsallaguess]

It is frankly of no use for anyone surely?

The table was primarily generated to show 6m price-action, which the OP is clearly interested in, with the forecast-yield information heavily caveated for all the reasons you mention.

The risks with the provided data are very clearly spelt out...

It was posted to perhaps help as a starting point for the OP to then carry out further investigation, and whilst we can all stand around and tell each other that no-one knows what the future will hold with regards to dividends over the coming medium term, that doesn't really get us anywhere if we're wanting to continue investing during this period of widespread dividend-dislocation...

Cheers,

Itsallaguess

[floyd3592]

Or are there any other candidates who’s share price has dropped lately but might be a better home for my dosh?

Here's a list of FTSE100 components, grouped by sector and then ordered per sector by Forecast Yield, and shown with percentage price-performance for the past 6 months.
]

Many thanks for taking the time to do this IAG, very useful and much appreciated!

Regards
Floyd

[kempiejon]

Did anyone mention this

Final dividend suspended for 2019/20 and all dividends for 2020/21 to create capacity for value-enhancing investments and managing confidently through the Covid-19 crisis; expect to resume dividends in 2021/22 at an annual rate of 7.7 pence per share

https://www.londonstockexchange.com/new ... s/14531501

For now there's plenty to pick from with better income prospects. Over 10 years BT have cut 4 times I recon https://www.dividenddata.co.uk/dividend ... ?epic=BT.A
It really shouldn't have come as any surprise that BT or any other pick might cut during a HYPer's relationship with them but having such a large percentage of the FTSE100 cutting in such a short time was a more unlikely senario. Any LTBH strategy will have picks that inevitably stumble. For now I think I'll keep my BT even though it's years before any income.

[csearle]

Moderator Message:
A few fairly off-topic posts removed. I've split off the discussion about yield on cost to its own topic. - Chris

[Gengulphus]

Sorry, but I can't start to answer this...

Why not? Because you haven't told me what else is in your HYP! Diversification is an important aspect of the comparative (*) safety of HYP dividend income

Of course diversification is important and I feel I am diversified but don't mind easing diversification limits in such unusual times to try and maintain dividends. My question was of those other shares that have taken a big capital hit which of them would be worth ditching BT for (if any).

Your first question was that - but you asked two questions! Specifically, with my bold to point out the second question: "I am currently sitting on losses of 50% for RDSB, 43% for IMB, 47% for HSBC & 27% for Aviva. Would any of these make a better home for my money than BT? Or are there any other candidates who’s share price has dropped lately but might be a better home for my dosh?"

On the first question, I wouldn't describe any of the four shares you mention as a clearly better home for your money. Imperial Brands is probably the best of them - it's got the very long-term record, with both dividends and the share price very roughly 5-fold over the last 20 years, but it does seem to have lost its way over the last four years (interestingly, from about the time it changed its name from Imperial Tobacco...). If it can find its way again, it could well be a better home - but that's a pretty big 'if', so not clearly a better home IMHO. Of the other three, RDSB strikes me as the best, but with dividends down on where they were 10 years ago (possibly just temporarily because of COVID-19), the very long-term share price trend only slightly upwards (ignoring the recent drop), and the increasing shift from fossil fuels to renewables, again I wouldn't regard it as clearly a better home. HSBC and Aviva have been rather mediocre HYP shares over the very long term, especially Aviva, and HSBC currently has the risk of Hong Kong going pear-shaped: jumping from BT to either of them has similar chances of being a jump from the frying pan into the fire or jumping from the fire into the frying pan IMHO.

So I regard Imperial Brands and RDSB as possible better homes than BT - but neither of them as good enough to be worth stretching diversification limits for. Looking beyond your four suggestions (i.e. at your second question), Legal & General has already been mentioned and I would regard it as pretty clearly a better home than BT, worth stretching diversification limits for. But don't stretch them too far - if you've already got it and it's a highly-weighted holding in your HYP, it may be too risky to put even more of your eggs in that basket. And the same goes if you've already got a lot in the bigger basket that is the insurance sector, or the yet bigger basket that is financials.

I do still feel that I'd have a better chance of making useful suggestions if I knew what was already in your HYP...

Gengulphus

[Gengulphus]

For now there's plenty to pick from with better income prospects. Over 10 years BT have cut 4 times I recon https://www.dividenddata.co.uk/dividend ... ?epic=BT.A

Three times would be fairer, I think. If you look at the dividend record below the chart, they cancelled dividends between the 2001 interim and the 2001 final, and then reinstated them at around a third of their previous level between the 2002 interim and the 2002 final (judging by the drop from 19.66p from 2000, the preceding full year of dividends, to 6.50p in 2003, the following full year of dividends). Because those changes happened halfway through the years, the chart shows two successive cuts for what was really a single cancellation, two successive rises for what was at least arguably a single restart, and no cancellation even though holders went a full year without any dividends - just not a year that happened to be aligned with company financial years.

Assuming BT stick to their announced intention not to pay any dividends for their 01/04/2020 - 31/03/2021 financial year, in a year's time we'll again be looking at two apparent cuts in the chart (the second a complete cancellation this time) for what was actually just the single cancellation we've already had.

Gengulphus

[tjh290633]

I would just like to add the following table from my own portfolio. Where companies have announced their intention not to pay certain dividends, or to pay at a lower level, that has been included in the yield figures:

Epic     Change    Yield 
RB.       17.93%    2.42%
AZN       12.07%    2.56%
BATS       7.27%    6.07%
KGF        4.56%    1.47%
ULVR       4.40%    3.16%
NG.        3.78%    4.96%
UU.        2.86%    4.39%
RIO        2.18%    7.62%
PHP        1.72%    3.83%
ADM        0.95%    5.12%
SGRO      -0.22%    2.31%
SSE       -2.26%    5.69%
BHP       -5.83%    6.73%
GSK       -5.90%    4.78%
PSON      -9.39%    3.38%
TSCO      -9.60%    3.97%
BA.       -9.88%    1.85%
TATE     -10.84%    4.37%
SMDS     -11.01%    3.22%
VOD      -12.00%    5.77%
DGE      -12.51%    2.50%
IMB      -16.35%    8.81%
ADM      -18.35%    3.46%
IMI      -19.97%    1.58%
TW.      -23.45%    2.59%
LGEN     -26.70%    7.91%
WMH      -29.08%    0.00%
BP.      -31.84%   10.16%
AV.      -33.10%    3.39%
BLND     -37.04%    3.97%
BT.A     -37.10%    0.00%
CPG      -37.72%    0.00%
RDSB     -40.57%    3.81%
MARS     -46.97%    0.00%
LLOY     -47.61%    0.00%
MKS      -48.95%    0.00%
Av.Chg   -14.63%    3.66%

The change is since 1st January except for PHP, which was bought on 25th March. The leaders and laggards are evident. I think I am correct in saying that only Kingfisher in the top 15 has cut a dividend. SSE reduced its in anticipation of disposing of its retail side.

That top 15 is where I would be looking for a replacement for BT.A, which I am not. I am working on the theory of the unripeness of time, as Sir Humphrey might have put it, regarding any possible disposals.

TJH