too high?

[moorfield]

I think this serves to remind newer investors looking at an income investing approach, that having a high yield is not the only consideration for buying the share. A year ago, DEC had a dividend cover of -2.5 times (-8 on a TTM basis), with forecast EPS for the next two years giving a forecast cover of 1.2x and 0.1x. So although DEC would come out on an initial search, sorting by yield, it wouldn't pass even a cursory assessment of the likelihood of the dividend being safe.

Well DEC has gone into freefall today. I haven't fathomed completely whats actually happened but I've seen comments elsewhere expressing some surprise its shares weren't suspended temporarily.

A 21% yield on offer for the discerning HYPster ! Is that "too high" for you ?

[Hypster]

It was in bargepole territory for me last year, it remains so today

[BullDog]

I think this serves to remind newer investors looking at an income investing approach, that having a high yield is not the only consideration for buying the share. A year ago, DEC had a dividend cover of -2.5 times (-8 on a TTM basis), with forecast EPS for the next two years giving a forecast cover of 1.2x and 0.1x. So although DEC would come out on an initial search, sorting by yield, it wouldn't pass even a cursory assessment of the likelihood of the dividend being safe.

Well DEC has gone into freefall today. I haven't fathomed completely whats actually happened but I've seen comments elsewhere expressing some surprise its shares weren't suspended temporarily.

A 21% yield on offer for the discerning HYPster ! Is that "too high" for you ?

No thanks. Learned my lesson with too good to be true dividends.

[Padders72]

Well DEC has gone into freefall today. I haven't fathomed completely whats actually happened but I've seen comments elsewhere expressing some surprise its shares weren't suspended temporarily.

A 21% yield on offer for the discerning HYPster ! Is that "too high" for you ?

No thanks. Learned my lesson with too good to be true dividends.

I can't argue with you in this case but out of interest, what do you consider a worthy investment? I ask since you pop up in quite a few threads I follow and are unrelentingly negative in all of them. Perhaps it is a measure of our respective levels of risk but it would be interesting to know where your money actually goes, since we are well versed in where it doesn't.

[Itsallaguess]

‎

Time will of course tell as to whether the current [DEC] dividend 'yield' of 17.67% can be maintained to help make up for that loss of investment capital, and it will be interesting to see where DEC goes from here in that regard, but with a 12-month capital loss of 34%, then even at a yield of 17.67%, that's two full years worth of dividends that need to be recouped just to stand still from an overall investment perspective, which feels like quite a high bar in itself looking at the above performance...

https://www.lemonfool.co.uk/viewtopic.php?f=15&t=34915&start=240#p617117

Just a quick note to say that the above Diversified Energy Company (DEC) post was raised on September 26th on this 'Too High?' yield-related thread, since when the DEC share price has declined again by a further 33%, on top of the falls discussed above, which now brings the current 12-month capital loss to 54% -

https://www.google.com/finance/quote/DEC:LON?window=1Y

Cheers,

Itsallaguess

[kempiejon]

which now brings the current 12-month capital loss to 54% -

https://www.google.com/finance/quote/DEC:LON?window=1Y

On another post the yield is noted as 25%, 6 years of rising income. I see last div paid in September next one just before year end, then xDiv in Feb. So Shirley they'll stumble before next Christmas?

[88V8]

which now brings the current 12-month capital loss to 54% -

On another post the yield is noted as 25%, 6 years of rising income. I see last div paid in September next one just before year end, then xDiv in Feb. So Shirley they'll stumble before next Christmas?

I hope not, as I just topped up.

V8

[kempiejon]

On another post the yield is noted as 25%, 6 years of rising income. I see last div paid in September next one just before year end, then xDiv in Feb. So Shirley they'll stumble before next Christmas?

I hope not, as I just topped up.

V8

Does that put you over, over weight? Or were you referring to a previous top up in the other post?

Meanwhile, an opportunity to top up. Which is frustrating if one is already overweight.

https://lemonfool.co.uk/viewtopic.php?p=635004#p635004

Sill another 20% off the share price will help with being too heavy...

[moorfield]

‎

Time will of course tell as to whether the current [DEC] dividend 'yield' of 17.67% can be maintained to help make up for that loss of investment capital, and it will be interesting to see where DEC goes from here in that regard, but with a 12-month capital loss of 34%, then even at a yield of 17.67%, that's two full years worth of dividends that need to be recouped just to stand still from an overall investment perspective, which feels like quite a high bar in itself looking at the above performance...

https://www.lemonfool.co.uk/viewtopic.php?f=15&t=34915&start=240#p617117

Just a quick note to say that the above Diversified Energy Company (DEC) post was raised on September 26th on this 'Too High?' yield-related thread, since when the DEC share price has declined again by a further 33%, on top of the falls discussed above, which now brings the current 12-month capital loss to 54% -

https://www.google.com/finance/quote/DEC:LON?window=1Y

Cheers,

Itsallaguess

And VOD of course has suffered a similar fate.

I am beginning to wonder whether once the 2*CTY has been smashed and the yield rocket keeps going up and up, it gets to a point when you might as well fill-boots. DEC is one of those companies perhaps. There was a very good write up here recently about how its accounting works, apologies I've forgotten who posted that. Doric Nimrod possibly another.

In other news, BATS is now "too high" yield...

[88V8]

I hope not, as I just topped up.

Does that put you over, over weight? Or were you referring to a previous top up in the other post?

Meanwhile, an opportunity to top up. Which is frustrating if one is already overweight.

https://lemonfool.co.uk/viewtopic.php?p=635004#p635004
Still another 20% off the share price will help with being too heavy...

Yes over over... I topped up after noting that I shouldn't.

The recent falls in SP are probably my fault... I have noticed over the years that when something becomes a 'conviction holding' and I move it into my ISA, some disaster usually follows. And sure enough.
Never mind, just smell the dividend... Ooooh, Shirley.

V8

[scrumpyjack]

Looks like the reason is the massive clean up costs for their wells, which they have not provided for.

https://www.investorschronicle.co.uk/ne ... ervention/

[88V8]

Looks like the reason is the massive clean up costs for their wells, which they have not provided for.
https://www.investorschronicle.co.uk/ne ... ervention/

Oh, that old guff.
Their asset retirement obligations were dissected in great detail here.
I won't be around in 50 years to see the end of well retirement but it seems to me that DEC have that aspect covered.

Unfortunately most journos don't understand DEC's accounting and are happy to recycle any criticism with ESG attached.
Frustrating for the company. The CEO must sometimes wish he'd never bothered with listing.

V8

[kempiejon]

Well soon there'll be a third of DECs sp in dividends. xD in 10 days. So is it too high now and due a cut?
Vodafone and Phoenix in double figures too. Though of course no HYPer would take static for 5 coming up 6 years VOD.

[88V8]

Well soon there'll be a third of DECs sp in dividends. xD in 10 days. So is it too high now and due a cut?
Vodafone and Phoenix in double figures too. Though of course no HYPer would take static for 5 coming up 6 years VOD.

No, but there is a case to be made for a static 10% vs a rising 5%, say. Depending how long one expects to live.

DEC, no cut.

V8

[kempiejon]

DEC, no cut.

I don't think I like the financials, 30% yield is sure high for income seekers. You've said before you're overweight. Or perhaps average weight as the price has fallen 60% this year. So if the dividend isn't reduced the directors know the market is mispricing the business and you'll be overweight again.

[floyd3592]

Anyone could have acted upon such information if they had felt it necessary to do so.

Those who took a bargepole attitude were proved correct.

In line with the theme of this thread.
viewtopic.php?f=15&t=2950&p=27839&hilit=carillion#p27889

Very illuminating thread, with great discussions. Shows that even with great investing experience and detailed knowledge, even the best of us here can can come unstuck. I have to say that the 'bargepolers' on that thread are posters to whom i'm inclined to listen more closely too when they're opining on this thread (and others) about a share being 'too high'

[moorfield]

Thanks for coming back on that IAAG. The list of 2*CTY cutters grows.

The dividend cuts we shall be discussing here this time next year are Vodafone and M&G, which I have already flagged elsewhere. Their yields have been too high for some time now, and not sustainable imo.

Something has to give.

Boom. Thaaar she blows...

https://investors.vodafone.com/sites/vo ... te-RNS.pdf



What's interesting with M&G on the other hand is that buyer sentiment has returned strongly since last summer, pushing the yield down.

[BullDog]

Thanks for coming back on that IAAG. The list of 2*CTY cutters grows.

The dividend cuts we shall be discussing here this time next year are Vodafone and M&G, which I have already flagged elsewhere. Their yields have been too high for some time now, and not sustainable imo.

Something has to give.

Boom. Thaaar she blows...

https://investors.vodafone.com/sites/vo ... te-RNS.pdf



What's interesting with M&G on the other hand is that buyer sentiment has returned strongly since last summer, pushing the yield down.

I have some respect for your simple yield safety check and M&G yield has been a constant worry since I bought it. I have on a number of occasions looked for evidence of an upcoming dividend cut coming down the track. I have always failed to find anything. On balance I've formed the opinion that in the medium term the dividend is fairly baked in to the share. I still worry about a dividend cut as I'm sitting on around an 11% yield on purchase price. But the market does slowly seem to be recognising that MNG shares are too cheap.

There, That's doomed it for sure.

[CryptoPlankton]

I still worry about a dividend cut as I'm sitting on around an 11% yield on purchase price.

Surely it's only the current yield that is significant? I'm sitting on an 11% yield on purchase price with my National Grid shares but I'm not remotely worried. This is because both the dividend and share price have roughly doubled since purchase and the running yield has generally remained in the 4% to 6% range - if anything, an income investor's dream!

[Arborbridge]

Boom. Thaaar she blows...

https://investors.vodafone.com/sites/vo ... te-RNS.pdf



What's interesting with M&G on the other hand is that buyer sentiment has returned strongly since last summer, pushing the yield down.

I have some respect for your simple yield safety check and M&G yield has been a constant worry since I bought it. I have on a number of occasions looked for evidence of an upcoming dividend cut coming down the track. I have always failed to find anything. On balance I've formed the opinion that in the medium term the dividend is fairly baked in to the share. I still worry about a dividend cut as I'm sitting on around an 11% yield on purchase price. But the market does slowly seem to be recognising that MNG shares are too cheap.

There, That's doomed it for sure.

Like poor cash flow can be corrected in time, poor yield can also correct itself. That seems to have happened with MNG and the historic yeild is now below *2CTY AFAIK. Like all measures, it could be significant, or it may only be some of the time, or not at all!

As regards historic yield: if Julius Casesar were alive today, would he be worried about the historic yield on his investments, supposing they still existed? I don't think so.

Arb.