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can we spot a cutter?

General discussions about equity high-yield income strategies
kempiejon
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can we spot a cutter?

#295664

Postby kempiejon » March 30th, 2020, 11:59 am

Seeing the recent rout of income producing shares I thought I'd log some of the dividend heroes. I've taken history and growth details from dividend data, here's the top 30* ftse100 with the longest record without a cut.
I've taken yield and cover from digital look.



Any predictions as to which might be for the chop before normality returns
*actually 29 SMT, scotish mortgage should be in there but DL don't have the data

Breelander
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Re: can we spot a cutter?

#295671

Postby Breelander » March 30th, 2020, 12:30 pm

Odd that you have left out Shell from that list....

... Shell has managed to deliver an uninterrupted stream of dividend payouts since World War II (i.e. no dividend cuts).
https://www.simplysafedividends.com/int ... rld-war-ii

Shell, which paid $15 billion in dividends last year, prides itself on having never cut its dividend since the 1940s.
https://www.cnbc.com/2020/03/25/big-oil ... s-say.html

Dod101
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Re: can we spot a cutter?

#295673

Postby Dod101 » March 30th, 2020, 12:34 pm

Imperial Brands I would think but not necessarily because of the Corona virus; it is a bit like the death of a 95 year old who happens to have the virus.

Dod

kempiejon
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Re: can we spot a cutter?

#295679

Postby kempiejon » March 30th, 2020, 12:49 pm

Breelander wrote:Odd that you have left out Shell from that list....


I the data is sorted on growth and longevity, Shell like Glaxo and Astrazenecca are 5 years static, there's a few more quirks like WPP and Schroders. Here's the page I worked from:-
https://www.dividenddata.co.uk/ftse-div ... th&order=1

Wizard
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Re: can we spot a cutter?

#295886

Postby Wizard » March 30th, 2020, 11:27 pm

My view is that the only companies that will not be under pressure to cut due to Covid-19 are the tobacco companies, consumer goods manufacturers and supermarkets. As said above there may be other pressures. I also think that there will be opportunism in some quarters to rebase dividends. There seems to be very few cutters, the approach appears to be to cancel and then have a think later. In many cases the resumption will be at a significantly lower level.

The bigger issue is which companies will not survive this. The original statement that Govt. would not let any business fail or anyone lose their job due to Covid-19. Of the companies typically discussed here I think Provident Financial and Petrofac must be at risk.

tjh290633
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Re: can we spot a cutter?

#296008

Postby tjh290633 » March 31st, 2020, 10:46 am

Wizard wrote:My view is that the only companies that will not be under pressure to cut due to Covid-19 are the tobacco companies, consumer goods manufacturers and supermarkets. As said above there may be other pressures. I also think that there will be opportunism in some quarters to rebase dividends. There seems to be very few cutters, the approach appears to be to cancel and then have a think later. In many cases the resumption will be at a significantly lower level.

The bigger issue is which companies will not survive this. The original statement that Govt. would not let any business fail or anyone lose their job due to Covid-19. Of the companies typically discussed here I think Provident Financial and Petrofac must be at risk.

We have the relatively recent examples from the 2008 hiatus to guide us. Some companies missed a single dividend, then resumed where they left off, some stopped dividends and then resumed a year or more later, and some carried on regardless.

Looking at what I held, William Hill and Rexam missed a single dividend, Yule Catto (now Synthomer) missed two. Taylor Wimpey took 3 years to resume while Lloyds Banking Group took six years. Those which stopped and I disposed of were: Anglo American, HBOS, Mapeley, Trinity Mirror, Premier Foods, Rentokil and Cattles. Reductions came from Aviva, Kingfisher, Marks & Spencer, Marstons, Segro, DS Smith, Unilever and United Utilities. The rest carried on.

As you say, some will not survive. Cash is undoubtedly king.

TJH

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Re: can we spot a cutter?

#297993

Postby Wasron » April 5th, 2020, 1:41 pm

kempiejon wrote:Seeing the recent rout of income producing shares I thought I'd log some of the dividend heroes. I've taken history and growth details from dividend data, here's the top 30* ftse100 with the longest record without a cut.
I've taken yield and cover from digital look.



Any predictions as to which might be for the chop before normality returns
*actually 29 SMT, scotish mortgage should be in there but DL don't have the data


I don’t know about predicting cutters, but from the perspective of spotting potentially interesting additions to my HYP there’s one on that list that stands out (ignoring the ones I already hold).

JMAT (Johnson Matthey), cover of 2.6, yielding 4.6%, P/E under 9 and 20+ years history of divi growth.

They go ex-div for the final in June, payable in Aug, so I guess they’ve still got plenty of time to decide to suspend

I think I might read the annual report while I have time off over Easter, to see whether their customers are still likely to be buying.

Wasron

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Re: can we spot a cutter?

#298029

Postby Wasron » April 5th, 2020, 3:54 pm

kempiejon wrote:Seeing the recent rout of income producing shares I thought I'd log some of the dividend heroes. I've taken history and growth details from dividend data, here's the top 30* ftse100 with the longest record without a cut.


Out of interest, when compiling the list did you notice many examples that would have been on this list, until a cut in the last month?

I can think of a few examples over the last few years that had long divi growth records that were broken (Vodafone, Pearson and Cobham come to mind), but directors seem to try and move heaven and earth to stay on this kind of list, so perhaps it should be a place to focus on over the next few months

Thanks for putting it together

Wasron

kempiejon
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Re: can we spot a cutter?

#298059

Postby kempiejon » April 5th, 2020, 5:29 pm

Wasron wrote:
kempiejon wrote:Seeing the recent rout of income producing shares I thought I'd log some of the dividend heroes. I've taken history and growth details from dividend data, here's the top 30* ftse100 with the longest record without a cut.


Out of interest, when compiling the list did you notice many examples that would have been on this list, until a cut in the last month?

I can think of a few examples over the last few years that had long divi growth records that were broken (Vodafone, Pearson and Cobham come to mind), but directors seem to try and move heaven and earth to stay on this kind of list, so perhaps it should be a place to focus on over the next few months

Thanks for putting it together

Wasron


Some omissions as were noticed up thread like Shell, AZN and Glaxo have long cut free histories but recently static so missed the list.
WPP is a stand out recent HYP cutter as is Bunzl and Meggitt though they've not really been hypers.

Alaric
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Re: can we spot a cutter?

#305312

Postby Alaric » May 3rd, 2020, 12:39 pm

ReallyVeryFoolish wrote: According to HL's data, for the last five years the dividend cover has been around 0.5. At today's price, HL shows a historic yield of 7%. Vodafone is the next dividend cutter in the queue?


They cut last year, so they might not be. There was a proposal last year after the reduction that they were going to float their ownership of masts etc into a separate Company alongside some other European operators. That may still be on the table as a prospective event.


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