Aviva and Sainsburys

[gigha]

I've just topsliced my holdings of British Aerospace and Astrazeneca because their capital value was well over 1.5 times the median value of my holdings (a la Terry). So I've now got the proceeds plus some accumulated dividends to reinvest. Decision time. The top up spreadsheet (after excluding those which if topped up would breach 1.5 median, or are excluded on the basis of cost or income contribution, again a la Terry) are Aviva and Sainsburys. Any thoughts? I don't really understand what's happening with Aviva after it's recent corporate action so not sure if it's a buy. With Sainsburys there are obviously concerns about consumer spending power but strategic ignorance suggests I put these aside, after all folk still need to eat and government intervention might come through. Any wisdom appreciated,
Gigha

[idpickering]

I've just topsliced my holdings of British Aerosoace and Astrazeneca because their capital value was well over 1.5 times the median value of my holdings (a la Terry). So I've now got the proceeds plus some accumulated dividends to reinvest. Decision time. The top up spreadsheet (after excluding those which if topped up would breach 1.5 median, or are excluded on the basis of cost or income contribution, again a la Terry) are Aviva and Sainsburys. Any thoughts? I don't really understand what's happening with Aviva after it's recent corporate action so not sure if it's a buy. With Sainsburys there are obviously concerns about consumer spending power but strategic ignorance suggests I put these aside, after all folk still need to eat and government intervention might come through. Any wisdom appreciated,
Gigha

Fwiw, I hold Sainsburys, and have done for years now. Aviva I held years ago and didn’t enjoy the experience tbh. I don’t hold them any more, and have no intention of buying the share again.

Why not show us your HYP? That might help others to help you perhaps?

Ian.

[kempiejon]

I was looking at my AZN the other day and wondering if I might uncharacteristically sell some and swap into a higher yield. I probably won't.
But I wouldn't pick Aviva, the income history is too patchy for my taste. I bought in 2006/7 and every year since they've paid me less than they did then. I have seen 4 cuts, after a few years of rebuilding dividends we see another setback.
Sainsbury, I hold but haven't looked at it's prospects, a glance at dividend history over 5 and 10 years show a number of cuts.

[funduffer]

I hold SBRY. Be aware their dividend policy is to pay out about 60% of underlying earnings, rather than a so-called progressive dividend policy.

We are focused on delivering strong dividends and will return a higher proportion of underlying earnings to shareholders, in the first instance through the ordinary dividend, where we will increase the dividend payout ratio from around 53 per cent of underlying earnings to around 60 per cent

We expect leverage to move below 3x over time, helped by a reduced impact of lease liabilities relating to property currently in the Highbury and Dragon property investment pools. Once leverage is comfortably within our target range, we expect to be able to return more cash to shareholders through higher dividends and/or share buybacks

So do not expect a smoothly rising dividend from them - more a bumpy ride!

FD

[gigha]

Here's my portfolio as requested by Ian.

                                                                                 Value     Div    Fcst 
Share                           Epic    Sector                                  %Total  %Total   Yield
GlaxoSmithKline                 GSK     Pharmaceuticals & Biotechnology          6.36%   3.28%   3.00%
Marston's                       MARS    Travel & Leisure                         1.04%   0.00%   0.00%
Vodafone Group                  VOD     Mobile Telecommunications                4.72%   4.95%   6.10%
United Utilities Group          UU      "Gas, Water & Multiutilities"            4.66%   3.60%   4.50%
Tate and Lyle                   TATE    Food Producers                           2.90%   1.24%   2.50%
SSE                             SSE     Electricity                              4.27%   3.89%   5.30%
Sainsbury (J)                   SBRY    Food & Drug Retailers                    3.35%   3.22%   5.60%
Persimmon                       PSN     Household Goods & Home Construction      3.12%   7.25%  13.50%
National Grid                   NG      Multiutilities.                          5.06%   4.35%   5.00%
Lloyds Banking Group            LLOY    Banks                                    1.84%   1.77%   5.60%
HSBC Holdings                   HSBA    Banks                                    3.68%   2.78%   4.40%
BT Group                        BT-A    Fixed Line Telecommunications            4.37%   3.00%   4.00%
British American Tobacco        BATS    Tobacco                                  5.41%   6.32%   6.80%
AstraZeneca                     AZN     Pharmaceuticals & Biotechnology          5.82%   2.20%   2.20%
Diageo                          DGE     Beverages                                3.80%   1.44%   2.20%
Aviva                           AV      Life Insurance                           3.11%   4.12%   7.70%
BAE Systems                     BA      Aerospace & Defence                      6.62%   3.76%   3.30%
BHP Group                       BHP     Mining.                                  4.21%  16.37%  22.60%
Tesco                           TSCO    Food & Drug Retailers                    2.58%   1.86%   4.20%
BP                              BP      Oil & Gas Producers                      4.41%   3.63%   4.80%
Rio Tinto                       RIO     Mining.                                  3.47%   8.41%  14.10%
Unilever                        ULVR    Food Producers                           3.36%   2.25%   3.90%
Reckitt Benckiser Group         RKT     Household Goods & Home Construction      2.18%   1.05%   2.80%
Admiral Group                   ADM     Nonlife Insurance                        4.50%   5.64%   7.30%
Shell                           SHEL    Oil & Gas Producers                      3.77%   2.66%   4.10%
Woodside Energy Group           WDS     Oil & Gas Producers                      1.38%   0.95%   4.00%

Portfolio Running Yield = 5.82%

                                                  Value      Div
Sector                                           %Total   %Total
Pharmaceuticals & Biotechnology                  12.18%    5.48%
Travel & Leisure                                  1.04%    0.00%
Mobile Telecommunications                         4.72%    4.95%
"Gas, Water & Multiutilities"                     4.66%    3.60%
Food Producers                                    6.26%    3.49%
Electricity                                       4.27%    3.89%
Food & Drug Retailers                             5.93%    5.08%
Household Goods & Home Construction               5.30%    8.30%
Multiutilities.                                   5.06%    4.35%
Banks                                             5.52%    4.55%
Fixed Line Telecommunications                     4.37%    3.00%
Tobacco                                           5.41%    6.32%
Beverages                                         3.80%    1.44%
Life Insurance                                    3.11%    4.12%
Aerospace & Defence                               6.62%    3.76%
Mining.                                           7.68%   24.78%
Oil & Gas Producers                               9.56%    7.24%
Nonlife Insurance                                 4.50%    5.64%
Total                                           100.00%  100.00%

Note: 1...'Value %Total' is the portfolio value of the share as a % of the total portfolio
      2...'Div %Total' is the expected dividend of the share based on forecast yield
                       as a % of the total portfolio expected dividend

[Dod101]

Here's my portfolio as requested by Ian.

                                                                                 Value     Div    Fcst 
Share                           Epic    Sector                                  %Total  %Total   Yield
GlaxoSmithKline                 GSK     Pharmaceuticals & Biotechnology          6.36%   3.28%   3.00%
Marston's                       MARS    Travel & Leisure                         1.04%   0.00%   0.00%
Vodafone Group                  VOD     Mobile Telecommunications                4.72%   4.95%   6.10%
United Utilities Group          UU      "Gas, Water & Multiutilities"            4.66%   3.60%   4.50%
Tate and Lyle                   TATE    Food Producers                           2.90%   1.24%   2.50%
SSE                             SSE     Electricity                              4.27%   3.89%   5.30%
Sainsbury (J)                   SBRY    Food & Drug Retailers                    3.35%   3.22%   5.60%
Persimmon                       PSN     Household Goods & Home Construction      3.12%   7.25%  13.50%
National Grid                   NG      Multiutilities.                          5.06%   4.35%   5.00%
Lloyds Banking Group            LLOY    Banks                                    1.84%   1.77%   5.60%
HSBC Holdings                   HSBA    Banks                                    3.68%   2.78%   4.40%
BT Group                        BT-A    Fixed Line Telecommunications            4.37%   3.00%   4.00%
British American Tobacco        BATS    Tobacco                                  5.41%   6.32%   6.80%
AstraZeneca                     AZN     Pharmaceuticals & Biotechnology          5.82%   2.20%   2.20%
Diageo                          DGE     Beverages                                3.80%   1.44%   2.20%
Aviva                           AV      Life Insurance                           3.11%   4.12%   7.70%
BAE Systems                     BA      Aerospace & Defence                      6.62%   3.76%   3.30%
BHP Group                       BHP     Mining.                                  4.21%  16.37%  22.60%
Tesco                           TSCO    Food & Drug Retailers                    2.58%   1.86%   4.20%
BP                              BP      Oil & Gas Producers                      4.41%   3.63%   4.80%
Rio Tinto                       RIO     Mining.                                  3.47%   8.41%  14.10%
Unilever                        ULVR    Food Producers                           3.36%   2.25%   3.90%
Reckitt Benckiser Group         RKT     Household Goods & Home Construction      2.18%   1.05%   2.80%
Admiral Group                   ADM     Nonlife Insurance                        4.50%   5.64%   7.30%
Shell                           SHEL    Oil & Gas Producers                      3.77%   2.66%   4.10%
Woodside Energy Group           WDS     Oil & Gas Producers                      1.38%   0.95%   4.00%

Portfolio Running Yield = 5.82%

                                                  Value      Div
Sector                                           %Total   %Total
Pharmaceuticals & Biotechnology                  12.18%    5.48%
Travel & Leisure                                  1.04%    0.00%
Mobile Telecommunications                         4.72%    4.95%
"Gas, Water & Multiutilities"                     4.66%    3.60%
Food Producers                                    6.26%    3.49%
Electricity                                       4.27%    3.89%
Food & Drug Retailers                             5.93%    5.08%
Household Goods & Home Construction               5.30%    8.30%
Multiutilities.                                   5.06%    4.35%
Banks                                             5.52%    4.55%
Fixed Line Telecommunications                     4.37%    3.00%
Tobacco                                           5.41%    6.32%
Beverages                                         3.80%    1.44%
Life Insurance                                    3.11%    4.12%
Aerospace & Defence                               6.62%    3.76%
Mining.                                           7.68%   24.78%
Oil & Gas Producers                               9.56%    7.24%
Nonlife Insurance                                 4.50%    5.64%
Total                                           100.00%  100.00%

Note: 1...'Value %Total' is the portfolio value of the share as a % of the total portfolio
      2...'Div %Total' is the expected dividend of the share based on forecast yield
                       as a % of the total portfolio expected dividend

I would be inclined to top up SSE (although I recognise that they have flagged a dividend cut in a year or so) and probably Diageo. I am looking at how well they are likely to come through the difficult times ahead. I see the price of Diageo's products are rising quite steeply at the moment but it is a sound company. SSE is also a good well run outfit. These attributes are to me, especially at the moment, more important than squeezing out a bit more by way of dividends. Sainsbury and Aviva are both I think relatively weak companies and just look at what has happened to some insurance companies today.

Dod

[gigha]

Interesting thoughts, Dod. Thank you, I'm keen on SSE - their increasing focus on renewables feels good. I also like Diageo, but feel the yield is just too low We're retired and expect to be taking the income from the pot in the next 4 years, but maybe sooner if our other income is squeezed too much. Holding on to AZN would have paid me more. And no sign of DGE upping their payout.

[idpickering]

Interesting thoughts, Dod. Thank you, I'm keen on SSE - their increasing focus on renewables feels good. I also like Diageo, but feel the yield is just too low We're retired and expect to be taking the income from the pot in the next 4 years, but maybe sooner if our other income is squeezed too much. Holding on to AZN would have paid me more. And no sign of DGE upping their payout.

Thanks for putting up your HYP for all to see. I agree with Dod regarding SSE, in fact I’m topping up my holdings of them tomorrow.

Ian.

[moorfield]

Interesting thoughts, Dod. Thank you, I'm keen on SSE - their increasing focus on renewables feels good. I also like Diageo, but feel the yield is just too low We're retired and expect to be taking the income from the pot in the next 4 years, but maybe sooner if our other income is squeezed too much. Holding on to AZN would have paid me more. And no sign of DGE upping their payout.

Thanks for putting up your HYP for all to see. I agree with Dod regarding SSE, in fact I’m topping up my holdings of them tomorrow.

Ian.

What's changed your mind since May's prelims ?

viewtopic.php?p=502664#p502664

Further to my comment about maybe buying more SSE today above, I've changed my mind on that. My reasoning is much in line with the thoughts aired in the recent posts above. Not a good idea to buy more of a share when you know that there will be a dividend cut in the offing.

[Dod101]

Interesting thoughts, Dod. Thank you, I'm keen on SSE - their increasing focus on renewables feels good. I also like Diageo, but feel the yield is just too low We're retired and expect to be taking the income from the pot in the next 4 years, but maybe sooner if our other income is squeezed too much. Holding on to AZN would have paid me more. And no sign of DGE upping their payout.

Diageo modestly increase their dividend most years I think, but if you do not like to top them up, Shell would be my next choice, sticking with energy`.

I live off my dividends but like to invest in strong companies with if possible at least steady increases in the dividend.

Dod

[gigha]

I'll have a closer look at Shell. Out and about now and can't even see my table on my phone. One thing that immediately attracts me is that they are our utility provider. Quite like the thought of them contributing to paying the huge bills we're getting.

[Dod101]

I'll have a closer look at Shell. Out and about now and can't even see my table on my phone. One thing that immediately attracts me is that they are our utility provider. Quite like the thought of them contributing to paying the huge bills we're getting.

Shell's price recently dropped from its highpoint of just under £25 down to just under £20 today. I am not looking to buy at the moment but if I were, that price I think is quite attractive, but like the oil price, it is volatile. Looking beyond the oil price gyrations, it like SSE is preparing for the green(er) future.

Dod

[idpickering]

What's changed your mind since May's prelims ?

Mainly because I'm a fan of shares in the renewables energy sector, and SSE are very much one of them. In these troubled times I think buying utility shares is a sound move anyway. OK, an impending lowering of the SSE dividend isn't ideal, but I can live with it. Rio Tinto nearly got the nod, but I gthink they're a risk to far currently.

Ian.

[Itsallaguess]

Source - https://www.dividenddata.co.uk/ex-dividend-date-search.py?searchTerm=sse

Cheers,

Itsallaguess

[Dod101]

Source - https://www.dividenddata.co.uk/ex-dividend-date-search.py?searchTerm=sse

Cheers,

Itsallaguess

Then again, does timing really matter? This has been discussed more times than most of us need but if someone wants to buy some income, why not?

Dod

[kempiejon]

I like your earlier thoughts Ian

Further to my comment about maybe buying more SSE today above, I've changed my mind on that. My reasoning is much in line with the thoughts aired in the recent posts above. Not a good idea to buy more of a share when you know that there will be a dividend cut in the offing.

The past reduction, they cut in 2020 and the promise of the proposed reduced income would be a line in the sand for me. Will the lower income nudge them below the FTSE100 average yield level?

It's interesting that this thread has thrown up quite a few ideas I'd rule out as HYPable like Sasinbury's, SSE, Aviva, Diageo and Shell.
The only option worthy of a look after my first pass would be Rio Tinto which Ian would rule out.

Rio Tinto nearly got the nod, but I gthink they're a risk to far currently.

The same broad strategy yet diametric opinions on the picks.

[Itsallaguess]

Source - https://www.dividenddata.co.uk/ex-dividend-date-search.py?searchTerm=sse

Then again, does timing really matter?

This has been discussed more times than most of us need but if someone wants to buy some income, why not?

Discussed in more detail previously here - https://www.lemonfool.co.uk/viewtopic.php?t=33762#p487971

Cheers,

Itsallaguess

[Dod101]

I like your earlier thoughts Ian

Further to my comment about maybe buying more SSE today above, I've changed my mind on that. My reasoning is much in line with the thoughts aired in the recent posts above. Not a good idea to buy more of a share when you know that there will be a dividend cut in the offing.

The past reduction, they cut in 2020 and the promise of the proposed reduced income would be a line in the sand for me. Will the lower income nudge them below the FTSE100 average yield level?

It's interesting that this thread has thrown up quite a few ideas I'd rule out as HYPable like Sasinbury's, SSE, Aviva, Diageo and Shell.
The only option worthy of a look after my first pass would be Rio Tinto which Ian would rule out.

Rio Tinto nearly got the nod, but I gthink they're a risk to far currently.

Well of course I am not a HYPer but feel perfectly entitled to comment, even in these hallowed halls. I would rule out Aviva and Sainsburys but Shell, SSE and Diageo?

Dod
The same broad strategy yet diametric opinions on the picks.

[gigha]

Kempiejon said " It's interesting that this thread has thrown up quite a few ideas I'd rule out as HYPable like Sasinbury's, SSE, Aviva, Diageo and Shell.
The only option worthy of a look after my first pass would be Rio Tinto which Ian would rule out, "

(Sorry don't know how to use the quote function)

I'm inclined to exclude Rio Tinto on the basis that it already contributes more than 8% of my portfolio income.

I'm finding this top up decision really quite difficult. Usually when I find initial purchase decisions hard I narrow down to my top two and buy a bit of each. Here I'm already planning two purchases so may consider 3 instead.
Gigha

[tjh290633]

Just a thought. GSK which you hold is about to spin off Haleon. You might wish to top up Haleon and possibly GSK if it's value fall appreciably. Worth holding fire until that has happened.

TJH