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AJ Bell - Dividend Dashboard Q2 2020

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Itsallaguess
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AJ Bell - Dividend Dashboard Q2 2020

#327386

Postby Itsallaguess » July 20th, 2020, 6:57 am

The latest Q2 2020 'Dividend Dashboard' from AJ Bell got a mention by Breelander in the 'How might one currently construct a HYP in practice?' thread, given that it's got a useful aggregated FTSE100 yield figure in it that might be a useful guide for those looking for metrics on which to base current HYP purchasing decisions.

It's also an interesting read in other areas too, and looks to be pulling together wider UK dividend-payout information in a similar way to the regular 'UK Dividend Monitor' articles from the Link Group.

I thought it was worth highlighting the AJ Bell 'Q2 2020 Dividend Dashboard' article on it's own thread here, as it clearly shows some of the difficulties in the UK high-yield arena at this present time -

https://www.ajbell.co.uk/sites/ajbell.co.uk/files/AJBYI_Dividend_dashboard%20Q2%202020%20FINAL.pdf

Image

Cheers,

Itsallaguess

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327390

Postby Dod101 » July 20th, 2020, 7:10 am

Thanks for that IAAG. Two items of note. One is that serial cutter Aviva and the other is confirmation for all that BATS is not a cutter. Someone on another thread claimed that it had cut a couple of years ago just because they had split their interim and final in two, thus making quarterly payments. It shows how important it is to check carefully.

How though has A J Bell made up the list? It looks random to me. What am I missing?

Dod

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327393

Postby simoan » July 20th, 2020, 7:20 am

Dod101 wrote:Thanks for that IAAG. Two items of note. One is that serial cutter Aviva and the other is confirmation for all that BATS is not a cutter. Someone on another thread claimed that it had cut a couple of years ago just because they had split their interim and final in two, thus making quarterly payments. It shows how important it is to check carefully.

How though has A J Bell made up the list? It looks random to me. What am I missing?

Dod

Maybe it's a bit early for you! The table is in order of the size of the estimated FY20 dividend in £m.

All the best, Si
Last edited by simoan on July 20th, 2020, 7:22 am, edited 1 time in total.

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327394

Postby idpickering » July 20th, 2020, 7:21 am

Dod101 wrote:Thanks for that IAAG. Two items of note. One is that serial cutter Aviva and the other is confirmation for all that BATS is not a cutter. Someone on another thread claimed that it had cut a couple of years ago just because they had split their interim and final in two, thus making quarterly payments. It shows how important it is to check carefully.

How though has A J Bell made up the list? It looks random to me. What am I missing?

Dod


Agreed on all counts Dod, particularly regarding the thanks to IAAG. The AV. dividend cuts info was very telling to me. I rather crassly brought them back into my HYP some time ago before realising my folly, and kicked them out again (idiot). As for the list being 'random', I would've liked it to be more extensive with regards to the stocks covered. Still interesting nonetheless though.

Ian.

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327408

Postby Dod101 » July 20th, 2020, 8:39 am

simoan wrote:
Dod101 wrote:Thanks for that IAAG. Two items of note. One is that serial cutter Aviva and the other is confirmation for all that BATS is not a cutter. Someone on another thread claimed that it had cut a couple of years ago just because they had split their interim and final in two, thus making quarterly payments. It shows how important it is to check carefully.

How though has A J Bell made up the list? It looks random to me. What am I missing?

Dod

Maybe it's a bit early for you! The table is in order of the size of the estimated FY20 dividend in £m.

All the best, Si


Thanks SI. You are quite right. I did not notice what is now glaringly obvious. A very helpful table.

Dod

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327417

Postby dealtn » July 20th, 2020, 9:12 am

Dod101 wrote:Thanks for that IAAG. Two items of note. One is that serial cutter Aviva and the other is confirmation for all that BATS is not a cutter. Someone on another thread claimed that it had cut a couple of years ago just because they had split their interim and final in two, thus making quarterly payments. It shows how important it is to check carefully.

How though has A J Bell made up the list? It looks random to me. What am I missing?

Dod


I claimed BAT was a cutter. I didn't make the claim for the reason you made though. I referred to a financial site with a table of 5 year Dividend records, and named the source and claimed I hadn't done complete research. The table is constructed on a "Calendar" basis, and not on a Company Year basis.

Having now gone to the original RNSs and read the Annual Reports for 2015, 2016, 2017 and 2018 I can see full disclosure on all the Dividends announced and paid by the company, and probably now know more on the company and its dividend policy than most holders, let alone readers here. I am happy to clarify it wouldn't meet any reasonable claim for the company to have been a cutter over the last 5 years which is an important guide for some.

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327419

Postby Dod101 » July 20th, 2020, 9:21 am

dealtn wrote:
Dod101 wrote:Thanks for that IAAG. Two items of note. One is that serial cutter Aviva and the other is confirmation for all that BATS is not a cutter. Someone on another thread claimed that it had cut a couple of years ago just because they had split their interim and final in two, thus making quarterly payments. It shows how important it is to check carefully.

How though has A J Bell made up the list? It looks random to me. What am I missing?

Dod


I claimed BAT was a cutter. I didn't make the claim for the reason you made though. I referred to a financial site with a table of 5 year Dividend records, and named the source and claimed I hadn't done complete research. The table is constructed on a "Calendar" basis, and not on a Company Year basis.

Having now gone to the original RNSs and read the Annual Reports for 2015, 2016, 2017 and 2018 I can see full disclosure on all the Dividends announced and paid by the company, and probably now know more on the company and its dividend policy than most holders, let alone readers here. I am happy to clarify it wouldn't meet any reasonable claim for the company to have been a cutter over the last 5 years which is an important guide for some.


I am not trying to accuse anyone, simply stating the case. The transition from paying twice a year to quarterly can be messy and BAT tried to make up for that by adjusting their payments schedule in the relevant year. I think it is important for most holders and potential holders to know that a company has an unblemished dividend record or not. Says something about the management apart from anything else.

Dod

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327423

Postby monabri » July 20th, 2020, 9:31 am

The RDSB dividend shown is after the dividamage. I'm not sure why the Aviva figure is the full dividend (4000 million shares x 30p divi....a rough sanity check calculation).?

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327427

Postby 88V8 » July 20th, 2020, 9:46 am

monabri wrote:The RDSB dividend shown is after the dividamage. I'm not sure why the Aviva figure is the full dividend (4000 million shares x 30p divi....a rough sanity check calculation).?

And the HSBC yield ignores the fact that they aren't paying at all..... like all tables, it's a frozen moment in time.

V8

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327428

Postby monabri » July 20th, 2020, 9:48 am

88V8 wrote:
monabri wrote:The RDSB dividend shown is after the dividamage. I'm not sure why the Aviva figure is the full dividend (4000 million shares x 30p divi....a rough sanity check calculation).?

And the HSBC yield ignores the fact that they aren't paying at all..... like all tables, it's a frozen moment in time.

V8


Oh...a memory of happier times.. ;)

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327436

Postby monabri » July 20th, 2020, 10:05 am

The table is for 2020 Estimate ..so they are expecting Aviva to return to a full divi payment after suspending the 2019 final? History would beg to differ.

As it is a 2020E, the prognosis for HSBA looks a bit grim, dividend wise.

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327447

Postby Wizard » July 20th, 2020, 10:47 am

88V8 wrote:
monabri wrote:The RDSB dividend shown is after the dividamage. I'm not sure why the Aviva figure is the full dividend (4000 million shares x 30p divi....a rough sanity check calculation).?

And the HSBC yield ignores the fact that they aren't paying at all..... like all tables, it's a frozen moment in time.

V8

It states the source for the table as including a consensus forecast. Although this is the Q2 report it does not state when the individual forecasts that made up that consensus forecast were made. That may explain some of the forecasts which I think are overly optimistic, such as HSBC. The only way to really know if this is a good forecast or not is to understand more about the constituents of that consensus, do they provide more details of that elsewhere?

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327516

Postby 88V8 » July 20th, 2020, 3:06 pm

Wizard wrote:It states the source for the table as including a consensus forecast.

As a rule I never bothered with forecasts. But historics are a bust, so.... I do recall however comment from various posters who used forecast yields, that on the whole they were pretty accurate.
Well, one way and another if we are going to buy direct equities we have to have a punt. If we only buy those currently paying, it's a meagre menu. A rolling updated consensus could be useful, probably better than we could do ourselves.

V8

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327524

Postby Dod101 » July 20th, 2020, 3:22 pm

As far as HSBC is concerned, there seems to be a feeling that they may pay some dividend before the year end and that is what I took the modest yield shown for HSBC to be. That though would I suppose require approval from the PRA and I cannot see that happening very soon, certainly not in time for the half year announcement which last year happened on 5 August.

Dod

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327527

Postby Gengulphus » July 20th, 2020, 3:29 pm

88V8 wrote:
monabri wrote:The RDSB dividend shown is after the dividamage. I'm not sure why the Aviva figure is the full dividend (4000 million shares x 30p divi....a rough sanity check calculation).?

And the HSBC yield ignores the fact that they aren't paying at all..... like all tables, it's a frozen moment in time.

Looking at https://www.sharecast.com/equity/HSBC_Holdings, it seems that they're still forecasting a dividend of 9.67p (currently a forecast yield of 2.5%) for this year. That will be a 'consensus' forecast arrived at by some sort of averaging applied to a whole lot of individual analysts' forecasts, so it seems that there are a fair number of analysts' forecasts around that HSBC will pay a dividend in 2020, and it seems from the £2.049b forecast dividends from HSBC in this AJ Bell document that they're basing their figures on similar analyst forecasts... My first reaction was to think that whether that means that the analysts concerned haven't bothered to update their forecasts since HSBC's April 1st announcement, or that they didn't take its statement that "The Board has also decided that until the end of 2020 we will make no quarterly or interim dividend payments or accruals in respect of ordinary shares, or undertake any share buy-backs in respect of ordinary shares." seriously (*), it indicates a low level of analyst competence... But on looking again, that statement doesn't say anything about a final dividend, so the analysts may well be forecasting that HSBC will pay a dividend for 2020, but only a final dividend, without any of the usual three preceding quarterlies. (I have incidentally noticed an HSBC page about forecasts in passing quite late in the process of writing this. Investigating it properly is more than I want to tackle right now, but others might wish to look to see what they make of it...)

Of course, that final dividend (if it happens) won't be paid until well into 2021, probably in April 2021. That raises the question of just how AJ Bell are calculating their forecasts of dividends paid out in 2020... The easiest method is to take current analyst 1-year dividend-per-share forecasts for all the FTSE100 companies and multiply them by shares in issue to get each company's dividend total for the year. But since analyst forecasts are for company financial years, they'll currently be payouts for financial years typically ending 30/06/2020, 30/09/2020, 31/12/2020 or 31/03/2021, with the last two dates being the most popular, and the final dividends for those years will typically be paid about 4-6 months after those dates. So if AJ Bell did it that way, a substantial chunk of their published 2020 dividend payout estimate cannot be expected to be paid until 2021, and it could be quite a long way into 2021 (e.g. SSE's 1-year forecast is currently for its financial year ending 31 March 2021, and the final dividend for that year isn't expected until September 2021...).

To get a good estimate of the actual 2020 payouts takes quite a bit more work per company than just looking up a consensus forecast and a number of shares in issue, then multiplying them together. Roughly, the way I would go about it would be to check up on the company's usual dividend payment schedule, and also on what dividends it has already paid in 2020, multiplying each by the number of shares in issue - watching out for any big changes to that number that might have happened between dividends, e.g. as the result of a rights issue (if really being nitpicky about it, do the small changes as well, e.g. for exercise of director/employee share options - but that seems unlikely to be worth the extra effort). Then look up the 1-year consensus analyst forecast dividend and divide it up between payments according to the company's established schedule, unless (as in HSBC's case) the company has indicated a different schedule for the year, in which case use that schedule instead. Multiply each of those by the current number of shares in issue (possibly with adjustments if there's an already-announced likely change to that number, e.g. if there's a rights issue in progress). Add up the payments already made in 2020 and the payments that process indicates are likely to be made in 2020 to arrive at your estimate for its total dividend payout that will actually be paid in 2020. Clearly all of that requires a much more detailed look at the company's history and announcements than the simple method described in my last paragraph.

There's nothing in the AJ Bell document giving proper details of how they did the calculations, and there are plenty of other ways of varying degrees of accuracy lying between the two I've described above, so I cannot say anything definite about which method they've used. But their estimate of £2,049m for HSBC is roughly a quarter of their total dividends of $10,269m paid in 2019, allowing for the $:£ exchange rate, so it does look as if they're working on a forecast of one quarter's worth of the pre-COVID-19 dividend being paid. So it seems likely to me that AJ Bell are using the simple calculation method I've described or something similar to it...

Note that I'm not saying that HYPers necessarily want an estimate of the dividends paid in the calendar year 2020, just that AJ Bell's presenting their figures as ostensibly being such an estimate looks rather misleading to me. For HYPers interested in buying shares now, the figure of interest is the dividends earned in the next 12 months: if they accept the forecasters' apparent assumption that HSBC will restart dividends at the previous level and schedule once 2020 is over (quite a big "if"!), then they can actually expect two quarterly dividends by July 20th next year (the 2020 final in early April and the 2021 Q1 interim is early July), so the figure to use is about twice the AJ Bell figure of £2,049m. For existing HYPers who already own the shares and are interested in where their income seems to be going, if they use calendar years for their records, the HSBC dividend income for 2020 looks practically certain to be zero, and if they use tax years, it looks pretty likely to be zero, though there might be a small chance that HSBC will reinstate the 2020 final at the previous level and get it paid by April 5th 2021...

A moral of the above is that using forecast figures properly is complicated, starting with trying to work out exactly what is being forecast... But currently, historical figures are so badly misleading that they're even worse if used uncritically, and just as complicated to use if one uses them critically, with an eye on all the adjustments that need making to them.

(*) Perhaps influenced by its date? ;-)

Gengulphus

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327530

Postby monabri » July 20th, 2020, 3:36 pm

With regard to HSBA isn't the message

"No dividends in the calendar year 2020 but there might be a divi in April 2021 which would be Q4 2020 FY ?

Thus the divi might be 10cents which would be a yield of just over 2%.


(Edit. I think this is what Gengulphus is alluding to..but I said it in fewer words). ;)

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327552

Postby Wizard » July 20th, 2020, 5:11 pm

monabri wrote:With regard to HSBA isn't the message

"No dividends in the calendar year 2020 but there might be a divi in April 2021 which would be Q4 2020 FY ?

Thus the divi might be 10cents which would be a yield of just over 2%.


(Edit. I think this is what Gengulphus is alluding to..but I said it in fewer words). ;)

Maybe I misunderstood, but I thought it was a forecasts for dividends being paid in 2020. If so surely a payment in April 2021 is irrelevant? Are AJ Bell adding apples and oranges?

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327558

Postby Gengulphus » July 20th, 2020, 5:35 pm

monabri wrote:(Edit. I think this is what Gengulphus is alluding to..but I said it in fewer words). ;)

Yes - it's easy to say things in fewer words if you only say one of the things! ;-)

Some of the other things I was saying were about the importance of paying attention to exactly what HSBC had said, of thinking about how the numbers you find in secondary data sources were arrived at, of taking the purpose for which you want a number into account when deciding how suitable it is, of recognising that you might need to make your own adjustments to get the numbers suitable for your purpose, etc.

Gengulphus

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Re: AJ Bell - Dividend Dashboard Q2 2020

#327559

Postby dealtn » July 20th, 2020, 5:42 pm

Wizard wrote:
monabri wrote:With regard to HSBA isn't the message

"No dividends in the calendar year 2020 but there might be a divi in April 2021 which would be Q4 2020 FY ?

Thus the divi might be 10cents which would be a yield of just over 2%.


(Edit. I think this is what Gengulphus is alluding to..but I said it in fewer words). ;)

Maybe I misunderstood, but I thought it was a forecasts for dividends being paid in 2020. If so surely a payment in April 2021 is irrelevant? Are AJ Bell adding apples and oranges?


It's pretty sloppy language, but they aren't alone in that failing.

They reference "pay out" which suggests they are talking about actual delivery of dividends in 2020, but later talk about 2020 dividends potentially being restored following the 2019 cuts (specifically with respect to Aviva). In that case it is the final dividend for the financial year 2019 that has been cut, announced 2020, xd would have been 2020, would have been paid May 2020, and cut 2020. So the restored 2020 dividend they talk about is (from a holder's perspective) all 2021 from most people's point of view.


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