The Lemon Fool

tjh290633 wrote:I quote from the RNS https://www.investegate.co.uk/imperial- ... 00023186N/ giving the half year results for IMB:

Dividend to be rebased by one third; implying an annual dividend for 2020 of 137.7 pence per share

I am assuming that that will be the level of the total dividends for 2020, to be announced on the 17th, as I said. It is the best guidance that I have at the moment.

TJH

So that's 137.7p against a current share price of of !12.19, giving a yield of 11.3%

Strangely the Sharecast forecast yield is 11.2%!

Terry, you could always get a job as a forecast analyst!

FD

Dod101 wrote:Why do investors need a forecast dividend anyway? What is the purpose? In normal times I use the trailing yield (actual income for the last 12 months/ current value) but currently that does not work for all shares because as we know same have cancelled their dividends and others have drastically reduced them. For me that applies only to Imperial Brands and Shell having reduced their dividends and to HSBC having cancelled them. Otherwise for the sake of comparison, I can continue to use the trailing yield.

That avoids my having to worry about forecasts and how to check them and avoids worrying about the reliability of any particular site. Keep it simple.

Dod

Let's look at HSBC. The Sharecast consensus yield is 1.7% (as of this weekend). So analysts as a group consider that HSBC will restart dividends at a modest level next year. Do I believe this is 100% accurate? NO, because there is too much uncertainty in the sector. with interference from authorities. The forecast for Lloyds is 1.4%, so again for a modest dividend next year.

So why do I bother even looking at this data?

1. It gives me some re-assurance that Banks will return to dividends next year, so I should probably continue to hold to see what happens. (Contrast that to say, Marstons, where the forecast is 0%).

2. I have money to top-up my HYP. Should I spend it on HSBC (or LLOY)? Probably not. The forecast yields are too low, and I could get better income elsewhere.

So overall, it indicates I should HOLD HSBC.

This is what HYPTUSS does for you. It is a sieve that filters out the most likely top-up candidates within your HYP, but does rely on you having some faith in the credibility of the financial analysts that provide the underlying data.

FD

funduffer wrote:

tjh290633 wrote:I quote from the RNS https://www.investegate.co.uk/imperial- ... 00023186N/ giving the half year results for IMB:

Dividend to be rebased by one third; implying an annual dividend for 2020 of 137.7 pence per share

I am assuming that that will be the level of the total dividends for 2020, to be announced on the 17th, as I said. It is the best guidance that I have at the moment.

TJH

So that's 137.7p against a current share price of of !12.19, giving a yield of 11.3%

Strangely the Sharecast forecast yield is 11.2%!

Terry, you could always get a job as a forecast analyst!

FD

Sharecast are obviously using what the company has posted. Share price moves would account for the difference between us.

I have made no forecasts.

TJH

I suspect that forecats yields like most other forecasts are a trailing indicator and if treated as such should reflect reality reasonably closely..


GS

funduffer wrote:Let's look at HSBC. The Sharecast consensus yield is 1.7% (as of this weekend). So analysts as a group consider that HSBC will restart dividends at a modest level next year. Do I believe this is 100% accurate? NO, because there is too much uncertainty in the sector. with interference from authorities. The forecast for Lloyds is 1.4%, so again for a modest dividend next year.

So why do I bother even looking at this data?

1. It gives me some re-assurance that Banks will return to dividends next year, so I should probably continue to hold to see what happens. (Contrast that to say, Marstons, where the forecast is 0%).

2. I have money to top-up my HYP. Should I spend it on HSBC (or LLOY)? Probably not. The forecast yields are too low, and I could get better income elsewhere.

So overall, it indicates I should HOLD HSBC.

This is what HYPTUSS does for you. It is a sieve that filters out the most likely top-up candidates within your HYP, but does rely on you having some faith in the credibility of the financial analysts that provide the underlying data.

FD

Well I have nothing against HYPTUSS but I had concluded a while ago that the banks would want to reinstate their dividends in 2021. HSBC is the only UK bank that I hold and in its Q3 announcement they indicated that they wanted to restart their dividends and would make a statement with their Finals for 2020 in February 2021. It does not need some outside body to tell me that, but what no one can say is how much it is likely to be, and thus is no help as far as a forecast is concerned. Personally I think if there is a dividend it will be rather more than the 1.7% on today's share price. That would be almost insulting to their patient shareholders and in any case, their Finance Director said that if there was a dividend it would be more than a token one.

However I do not do forecasts and so, whatever they come up with (or at least are allowed to come up with), will be a bonus to me. I simply expect that my next year's aggregate dividends will be not less than this year, which are likely to be down about 15/20% on the 2019 dividends. Knowing their dividend position, I will be better informed about HSBC and whether I should continue to hold it.

Dod

GoSeigen wrote:I suspect that forecats yields like most other forecasts are a trailing indicator and if treated as such should reflect reality reasonably closely..


GS

How can a forecast be a trailing indicator?

Dod101 wrote:However I do not do forecasts and so, whatever they come up with (or at least are allowed to come up with), will be a bonus to me. I simply expect that my next year's aggregate dividends will be not less than this year, which are likely to be down about 15/20% on the 2019 dividends. Knowing their dividend position, I will be better informed about HSBC and whether I should continue to hold it.

Dod

I do not do forecasts

so here's one in the next sentence: I simply expect that my next year's aggregate dividends will be not less than this year,

Well, that went well for 2020

As regards the possibly forecasts for HSBC or LLOYDS go, I just take a pessimistic view and call it zero. The Brokers could be correct in their guesstimate, but I'll want to see what emerges as the situation is no much in play.
I fact, whether it's zero or 1.7% yield, makes little difference to me for income - and unless the yields rise considerably above that, neither company would be anywhere near my topup zone, so I am not concerned about the exact value.

Arb.

Dod101 wrote:
Personally I think if there is a HSBC dividend it will be rather more than the 1.7% on today's share price. That would be almost insulting to their patient shareholders and in any case, their Finance Director said that if there was a dividend it would be more than a token one.

But one situation doesn't necessarily preclude the other Dod...

HSBC have paid four separate dividends over a 12 month period normally, so there is of course the chance that if one or more of those separate dividends in the coming 12-month period is seen to be 'more than a token one', but where perhaps that does not necessarily apply to all four dividend payments, then *both* of those situations could well turn out to be correct...

Cheers,

Itsallaguess

Dod101 wrote:... but what no one can say is how much it is likely to be... Personally I think if there is a dividend it will be rather more than the 1.7% on today's share price.

"no-one" and then immediately "someone".

It is true no-one can accurately predict what it will be, but that's not to say people can't make forecasts (which is precisely what you just did).

Arborbridge wrote:

GoSeigen wrote:I suspect that forecats yields like most other forecasts are a trailing indicator and if treated as such should reflect reality reasonably closely..


GS

How can a forecast be a trailing indicator?

I suspect what was meant was that the forecasts are slow to update, and be reflective therefore of current expectations (at least in some cases). Many sites use an average of broker forecasts, and some brokers will be providing updates monthly, say, and some considerably less frequently than that.

I said earlier in the thread that data sources, and those that provide forecasts, need to meet a quality test to be useful in my opinion, and that is an indication of how some might fail that test (for my requirements - which might be much more exacting that the requirements of others of course).

dealtn wrote:

Arborbridge wrote:

GoSeigen wrote:I suspect that forecats yields like most other forecasts are a trailing indicator and if treated as such should reflect reality reasonably closely..


GS

How can a forecast be a trailing indicator?

I suspect what was meant was that the forecasts are slow to update, and be reflective therefore of current expectations (at least in some cases). Many sites use an average of broker forecasts, and some brokers will be providing updates monthly, say, and some considerably less frequently than that.

I said earlier in the thread that data sources, and those that provide forecasts, need to meet a quality test to be useful in my opinion, and that is an indication of how some might fail that test (for my requirements - which might be much more exacting that the requirements of others of course).

No, I mean that most forecasts are merely an extrapolation of the current trend. When the trend changes the forecasters adjust their "forecast" based on what just happened. So most forecasts really tell you what happened last period or sometimes two periods ago. I think one of the few forecasts that have any useful level of predictive value is for GDP numbers though I haven't checked recently.

GS

GoSeigen wrote:No, I mean that most forecasts are merely an extrapolation of the current trend. When the trend changes the forecasters adjust their "forecast" based on what just happened. So most forecasts really tell you what happened last period or sometimes two periods ago. I think one of the few forecasts that have any useful level of predictive value is for GDP numbers though I haven't checked recently.

GS

That put an entirely new light on the idea of a "forecast" in this context. Are they not using input from company announcements and analysis of the business outlook? I didn't expect an "analyst" to be paid for looking at a trend and adding a bit for luck!

BTW, it's fair enough to change the forecast to take into account "what just happened" - I don't see that as a criticism but showing they are awake.

Anyhow, the truth remains that on average, however they do it, forecasts come up with a look ahead which is accurate enough for my purpose.

Arb.

Generally management 'steer' city expectations so to that extent if analysts have a consensus forecast for dividends, I would tend to think that is what they have been led to think by management.

scrumpyjack wrote:Generally management 'steer' city expectations so to that extent if analysts have a consensus forecast for dividends, I would tend to think that is what they have been led to think by management.

That's what I believe too - surely that's the point. The management has a good idea where the business is going and communicates that. One hopes that "analysts" do some work of there own to test likely outcomes.

AAMOI: I've just run HYPTUSS for "forecast dividends" and the result is 5.63p per unit. Then I ran "historic" forecasts, which produced almost the same result: 5.66p ( I noticed a couple of possible anomalies in the historic where yields were set to zero, but didn't investigate). Surprised how close the two are, TBH.
This compares with my "corrected" forecast of 5.05p.

Arb.

When HSBC recommence dividends it will need to pitch the dividend at a yield which is attractive to both old and new investors with plenty of appeasing words about the intention to grow dividends going forward.

I'm expecting that the dividend will start at 25 cents ( ~20p) per annum, approximately half of the pre covid payment. Hopefully, they will then be able to start to grow the dividend. Would this assuage the PRA at this level of cut?

As for Lloyds, I'm making the same assumption, dividends to restart at 50% of pre covid.

Better than nowt!


(This guessing lark, " good game, good game" ).

Will be interesting to see what happens to forecast yields over the next couple of months if the vaccine news holds good, and a route to 'normality' becomes clearer.

FD

Ive just run HYPTUSS to look at forecast income, then corrected those shares where I believe the forecast to be wrong.
Raw forecast is 5.63p per unit, my corrected forecast is 5.16p. These two numbers are gradually moving together, and now are within the 8-9% which I would regard as around normal at the portfolio level. So as regards giving one a rough idea of what your income might be for the next year, I should say the forecasts are becoming more realistic looking.

So, do we believe them yet? On an individual level some are still dodgy, but at the portfolio level, I'd say, not bad. In previous years, I would say that the error between my forecast and actuality at the year end is of the order of 8% adrift.

Arb

I just take last years dividend data which is held in an Excel Sheet and copy it down at the end of the year and then make tweaks as companies make dividend announcements or when I buy/sell/top-up shares. The data are handled by a pivot table which is updated (refreshed) as changes to dividends are notified.

monabri wrote:I just take last years dividend data which is held in an Excel Sheet and copy it down at the end of the year and then make tweaks as companies make dividend announcements or when I buy/sell/top-up shares. The data are handled by a pivot table which is updated (refreshed) as changes to dividends are notified.

My table covers 12 months. Every now and then I increase the dates for dividends already received by one year and sort the table by date paid. The table includes date of announcement, XD date and Payment date. As announcements are made, I update the table with the dividend per share (and the number of shares, if appropriate).

It is very simple and works fine for me.

TJH

Simple? Both sound a bit more effort than I would like to make regularly