Where are the Ideas?

[TUK020]

Ideas are tough art this l the moment. I bought quite a lot in March because the sweetshop was open and my portfolio is the expected sea of red, which is OK, but there have been a while heap of dividend cuts and even if they do start paying paying out at lower rates, I'm still a bit worried about being burned. Executives have got the idea that they can get away with cutting the cost of capital and there's not really anywhere for investors to go.

I have some money sitting on the sidelines and I'm not sure that there are enough FTSE dividend stocks left now without crowding into the same sectors. So what I'm very slowly looking at is:

1) Widening to FTSE 250 dividend stocks
2) Relooking at dividend interruptors like banks - although I've got a few in my portfolio already and there is a lot more speculation than I like here
3) Repointing to dividend growth stocks paying pitiful current dividends - I'm in my late forties so I don't need the dividends now
4) Going to large caps abroad which means I don't have to compromise on capitalisation, dividend history or current yield and I get more diversification but there's an admin overhead

Starter,
you could try posting this on the High Yield Strategies - General, and you might get a wider range of responses
tuk020

[moorfield]

Quoted from the guidelines

When initially bought, have yields greater than the yield of the FTSE 100 index

The guidelines also read should, not must, which is enough wiggle room in my view to accommodate a lower yielder such as 3IN (and indeed that perennial favourite low yielder here, ULVR) to be bought provided that overall portfolio (the P in HYP remember) yield remains "high", ie. above the FTSE100.

[Dod101]

3iN was certainly yielding more than 3.6% when I bought it in early April. I think no one knew then what the FTSE100 yield was because dividends were being postponed/cancelled left, right and centre. In that climate I chose to find a decent dividend yield (and I think 3.6% or more is that) and one, at least as importantly, which is likely to be sustained or increased. That seems to me to meet the HYP requirements given the then, and current, investment climate.

Get real, anyone who does not think so.

Dod

[funduffer]

According to Dividend data, the current FTSE 100 yield is 3.8%, and that of the FTSE 250 is 2.25%.

So I would have thought 3IN is worth talking about here, especially in a thread such as this where we are scraping the barrel to find attractive HYP shares.

[MDW1954]

Well my best buy in the last six months was 3i Infrastructure. I like it because it has a decent dividend (3.6%) which looks sustainable and unlike say HICL is not dependent on PPP but has a well spread portfolio in both activities and geography. It has also increased in share price since I bought it.

So there is an idea.

Dod

With full respect, I doubt with that yield it was strictly a "HYP" share when you bought it? And it's an investment trust too, so not eligible? Apologies if I am wrong. Looking where I am, I shouldn't be posting in here anyway.

RVF

Moderator Message:
RVF: please read the guidelines. 3IN (and the other shares mentioned higher-up in the thread) are ON-TOPIC. 3IN is an infrastructure investment company/ investment trust (sometimes known as a "quasi-REIT" on this board, and perfectly ON-TOPIC as it is NOT an IT investing in quoted equities. --MDW1954

Thank you for inviting me to check the guidelines. 3IN would, as I said, have not been a "HYP" share when bought with a yield of 3.6% which was my main point. I'll leave now as I am not supposed to post here anyway. Quoted from the guidelines

When initially bought, have yields greater than the yield of the FTSE 100 index

RVF

RVF,

I'm trying to HELP you, not criticise you. The current historic FTSE 100 yield is 3.8%, according to dividenddata.co.uk, and the forecast yield is currently 3.6% according to some figures from July. With the present Covid-19 situation, both figures seems high. 3IN's dividends will suffer only slightly from Covid-19, if it all. 3IN is higher yield, on any reasonable basis.

And yes, it's SHOULD have a dividend yield higher... and not MUST have a dividend yield higher...

MDW1954

[tjh290633]

According to Dividend data, the current FTSE 100 yield is 3.8%, and that of the FTSE 250 is 2.25%.

That no doubt is historical, and may not reflect future dividend curtailment, beyond what is already known.

My historic yield is 3.9%, and I would expect that to be appreciably above the FTSE100 yield.

By comparison the FT's "World Markets at a Glance" shows that the yield on the FTSE100 is 4.74% and that of the FTSE350HY is 7.29%. They also give the FTSE250 as 4.25% (excluding ITs).

I suspect that none of them are anywhere near the correct figure.

TJH

[funduffer]

According to Dividend data, the current FTSE 100 yield is 3.8%, and that of the FTSE 250 is 2.25%.

That no doubt is historical, and may not reflect future dividend curtailment, beyond what is already known.

My historic yield is 3.9%, and I would expect that to be appreciably above the FTSE100 yield.

By comparison the FT's "World Markets at a Glance" shows that the yield on the FTSE100 is 4.74% and that of the FTSE350HY is 7.29%. They also give the FTSE250 as 4.25% (excluding ITs).

I suspect that none of them are anywhere near the correct figure.

TJH

It is historic weighted dividends from the FTSE 100 companies over the last 12 months, as explained here:

https://www.dividenddata.co.uk/ftse-index-yield.py

I have no reason to doubt it, as I find the Dividend Data website pretty reliable.

[Alaric]

It is historic weighted dividends from the FTSE 100 companies over the last 12 months, as explained here:

But that's no longer entirely useful if attempting to select stocks on the basis of what dividend will be paid over the next 12 months.

[moorfield]

According to Dividend data, the current FTSE 100 yield is 3.8%, and that of the FTSE 250 is 2.25%.

That no doubt is historical, and may not reflect future dividend curtailment, beyond what is already known.

My historic yield is 3.9%, and I would expect that to be appreciably above the FTSE100 yield.

By comparison the FT's "World Markets at a Glance" shows that the yield on the FTSE100 is 4.74% and that of the FTSE350HY is 7.29%. They also give the FTSE250 as 4.25% (excluding ITs).

I suspect that none of them are anywhere near the correct figure.

TJH

My bold. It's an interesting and important question (which probably merits it's own thread) - is there a source/link which definitely settles the question (and can be helpfully linked from the Guidelines) of what is high yield?

Google "FTSE 100 Yield" and the dividenddata.co.uk which is usually the first link reports 3.79%. That figure is a weighted average by market cap of the yields listed in its table of constituents (I've checked), several of which look wrong or I disagree with: HSBA's yield today, until we are told otherwise, is zero not 2.77%; IMB is 9.8% based on the rebased dividend it has already announced (137.7p), not 13.3%. And so on...

Certainly I have never found a satisfactory answer to the question, which is partly why I started using CTY (City of London IT) yield as a benchmark several years ago, which is easy to reference, and is 6.0% today (*). As an income investment that can be bought in its own right, it should force a HYSS or HYPP income investor to ask themselves the question: "Why am I buying a single name share yielding less than this collective?" (**)

By that benchmark, I hold only the following high yield shares currently: IMB, LGEN, BATS, VOD, SSE, RIO and BRW.

(*) that CTY may trim its own dividend is beside the point and off topic here, that yield adjustment will simply be reflected by its next quarterly dividend announcement if it does happen.

(**) note to mods - read my question carefully, I am not advocating buying an IT here, I am advocating not buying a share yielding less than it.

[Arborbridge]

(*) that CTY may trim its own dividend is beside the point and off topic here, that yield adjustment will simply be reflected by its next quarterly dividend announcement if it does happen.

.

An interesting rhetorical device, if I may say so. You close down a response by pointing out it would be off topic, yet your original comment could be deemed either off-topic or requiring of a response to correct it.

Arb.

[moorfield]

(*) that CTY may trim its own dividend is beside the point and off topic here, that yield adjustment will simply be reflected by its next quarterly dividend announcement if it does happen.

.

An interesting rhetorical device, if I may say so. You close down a response by pointing out it would be off topic, yet your original comment could be deemed either off-topic or requiring of a response to correct it.

Arb.

Then report it if you so wish.

Edit: My question isn't off topic Arb: Who can provide a source/link which definitely settles the question of what is high yield? Can you?

[Arborbridge]

(*) that CTY may trim its own dividend is beside the point and off topic here, that yield adjustment will simply be reflected by its next quarterly dividend announcement if it does happen.

.

An interesting rhetorical device, if I may say so. You close down a response by pointing out it would be off topic, yet your original comment could be deemed either off-topic or requiring of a response to correct it.

Arb.

Then report it if you so wish.

Edit: But my question isn't Arb: Who can provide a source/link which definitely settles the question of what is high yield? Can you?

Nothing worth reporting: it was just an observation, that you've cleverly closed down any response to your 6% claim by saying it cannot be discussed - and I didn't say your question was OT.

As to that question, I doubt anyone can provide a meaningful answer for all the reasons which were discussed months ago. Personally, I'd be happy to take the dividend data percentage, but it doesn't matter to me that much since I'm buying by the average of my HYP yield and/or my IT basket. At present, as I've pointed out elsewhere, there is an unusual situation in which the IT basket yield is higher than my HYP, but that may come "right" in the next year or so and revert to normal.

Arb.

[Gengulphus]

It's an interesting and important question (which probably merits it's own thread) - is there a source/link which definitely settles the question (and can be helpfully linked from the Guidelines) of what is high yield?

I think you're right that it deserves a thread of its own - if only so that the resulting thread can be found easily and linked to from any other thread in which this question arises. So I've given it one, in viewtopic.php?f=21&t=25421 (currently on the Biscuit Bar, but I've submitted a report asking the moderators to decide whether it belongs there or here).

Gengulphus

[funduffer]

It is historic weighted dividends from the FTSE 100 companies over the last 12 months, as explained here:

But that's no longer entirely useful if attempting to select stocks on the basis of what dividend will be paid over the next 12 months.

Agreed, but the context of this discussion is whether 3IN can be considered to be a high yielding share. Given the number of dividend cuts in the FTSE 100, it is difficult to see that the FTSE 100 forward yield (based on today’s price) will be higher than the 3.79% historic yield quoted here.

The only question I have over this data from DividendData is whether the yield quoted does or does not include specials.

[Alaric]

The only question I have over this data from DividendData is whether the yield quoted does or does not include specials.

Dividenddata can quote either depending on what you specify. As of this evening (28th Sep) it's quoting 3.72% for the FTSE100 without specials and 3.76% with.

[GrahamPlatt]

In keeping with the thread title, but moving on to a somewhat philosophical vein, here are some ideas; https://www.oreilly.com/tim/21stcentury/

[88V8]

My idea is to sit and do nothing until new year.
Then we will have Brexit Stage III (and border chaos), more unemployment, a continuing dribble of liquidations, one way and another the sweet shop will be open again, but with better visibility than we had back in March.

That's my idea. But the temptation to fiddle is strong.

V8

[dealtn]

My idea is to sit and do nothing until new year.
Then we will have Brexit Stage III (and border chaos), more unemployment, a continuing dribble of liquidations, one way and another the sweet shop will be open again, but with better visibility than we had back in March.

That's my idea. But the temptation to fiddle is strong.

V8

"...will have..."

Mmm.

"...might have..."