Still sturdy after all these years?

[Luniversal]

‘Contrary to the mantra that every fund has to recite, past returns of companies are a good guide to future returns.’ (Terry Smith, 2022)

'Valuemargin' was an esteemed contributor to the Motley Fool talkboards. In Oct. 2007 he posted research which won over 200 recommendations. He had traced the compound annual growth rates (CAGR) of dividend per share for all FTSE 100 index constituents back to 1986; and he had rated them as 'Star', 'Good' etc depending on how strongly payouts had grown and how many interruptions had occurred to the flow, such as cuts and passes.

This work much influenced me when choosing a so-called Sturdy Seventeen (S17) in 2010-11. At first my elite was a Doughty Dozen, soon expanded. Attracted by pyad's High Yield Portfolio concept, I wished to give constructors flexibility (1). Several of these 17, covering 15 sectors, could be the core of a lump-sum HYP. If, as Mr Smith implies, the leopard does not change its spots when it comes to dividend records, some from the S17 would anchor income flow. That would leave room for more venturesome entries to complete the fifteen sectorally separate slots pyad deemed the minimum for security.

Ah, but what if one hankered for yet more safety-- might fifteen of these seventeen supply it? Would past reliability endure in the squalls to come? They had come through the Global Financial Crisis of 2008-10 unscathed, but the pandemic's dividend cuts were much more sweeping. On the other hand, what I called entropy might expose them. For as companies with fairly if not extremely high historic yields in 2010, were they not already being priced for a slow fade: tired behemoths ripe for disruption, dissolution and dismemberment?

That possibility should not influence HYP holders as far as cashing in goes, because capital values are 'very secondary' according to pyad. But dividends might rise less than inflation over time or dry up entirely if the S17 laboured, defeating a HYP's aspiration to an ever-rising inflow.

So I have rolled the S17's records on to 2021, through the WuFlu period when many dividends were suspended or reduced and only began to come back last year. Often they are 'rebased' on higher target earnings cover, or are rendered less reliable by substituting specials for regular payouts. Full, early restoration of 2019's rates can be less dear to a director's heart than spending free cash flow on share buybacks.

Tight-fisted boards often seized on the coronavirus to parade prudence. They promised jam tomorrow or the day after, rather than dosh in hand. This provokes retail and institutional investors who hunger for immediate income when inflation is careering towards 10%... after four decades at 3-4%, when the norm for Footsie titans was to stick the divi up by 5-10% a year. The quick fading of 2021's 'value' rally may witness punters feeling that the juicy era for payouts is past.

Here is data about how the S17 got on in the last 20 years, and how a HYP based on them would have turned out against two of my other essays: the Basket of Eight (B8), a set of investment trusts, and my real-life LuniHYP100. Those too aim for above-average and rising purchasing power over the medium to long term, without violent swings and roundabouts on the road (2).

LuniHYP started on Jul. 18, 2011, so the other two were timed from that date and use the same amount invested, ~£18,000. For the two HYPs it translated to fifteen shares costing £1,200 gross apiece; for the B8, trusts costing £2,235 each. Charges were £12.50 commission and 0.5% stamp duty for each buy.

The Seventeen were and are:

AstraZeneca (AZN)
BAe Systems (BA.)*+
BHP (formerly BHP Billiton) (BHP, ex BLT)+
British American Tobacco (BATS)*+
Centrica (CNA)*+
Compass (CPG)+
Diageo (DGE)+
Glaxo SmithKline (GSK)*+
Imperial Brands (formerly Imperial Tobacco) (IMB, ex IMT)
Pearson (PSON)+
Reckitt Benckiser (RKT, ex RB.)*
Relx (formerly Reed Elsevier) (REL)*
Shell (formerly Royal Dutch Shell) (SHEL, ex RDSB)*+
SSE (SSE)*
Tesco (TSCO)*+
Unilever (ULVR)*+
Vodafone (VOD)*+

* Also in LuniHYP100 launched Jul. 2011
+ Also in 'HYP-othetical' HYP06 notionally launched Jan. 2006

These conformed to pyad's guidelines about size, lack of debt and a recent record of climbing dividends. Others had stumbled in the GFC, notably property companies and banks. From the sectors with duplicates, pharmaceuticals and tobacco, the candidates with higher running yields were naturally preferred: AZN, not GSK, and IMB, not BATS.

Valuemargin had anointed twenty of the FTSE 100 as 'stars' in 2007, because their dividends compounded at 10% or more pa in 1986-2006 (3). Of these six made my SS cut in 2012: the two tobaccos, Glaxo, Diageo, Tesco and Unilever. He blessed 17 as 'good' with compound dividend growth of 7.5-10% pa. The SS took in four of them: Astra, Pearson, Reckitt and Relx. The last was the only one whose history was blemished by a cut, albeit small and back in the 1990s. BHP as an Australian-based affair was not considered by VM. Hence six of the SS had shone latterly: Centrica, Compass, SSE and Vodafone had been floated too recently for VM's survey, while dividend growth at BAe and Shell was too slow for him.

The Sturdy HYP began on an historic yield of 4.5%, against 4.6% for the LuniHYP and 4.4% for the basket. The All-Share Index was returning 3.1%, so each option promised immediately superior payback. In the SS HYP only BHP on 2.5% yielded below the All-Share. The most generous, to the extent that my later 'danger zone' principle would have shunned it, was Pearson on 9.8%.


INCOME
Cutting to the chase, here is how receipts developed compared with those of LuniHYP100 and B8. Amounts are allotted to years when paid, not when declared:

2011-12: £711/£808/£709
2012-13: £814/£988/£869
2013-14: £853/£960/£887
2014-15: £1,693/£2,184/£926
2015-16: £800/£901/£927
2016-17: £886/£969/£949
2017-18: £1,021/£1,023/£1,007
2018-19: £1,015/£1,280/£1.043
2019-20: £985/£1,041/£1,111
2020-21: £940/£1,629/£1,138

TOTALS: £9,719/£11,784/£9,567

To bring the story up to date, the half year to Dec. 31:

SS HYP: £866, +6.0% year on year
LuniHYP100: £395, +4.4%
B8: £582, +2.4%

Interim figures do not necessarily extrapolate to the full year since specials and dividend paydates vary between portfolios. Tthey do imply a sharp braking of the recovery from 2020.

CAGRs (omitting 2011-12 for 'dividend drag') in 2012-21 were 1.8% for the sturdies, 6.4% for my HYP and 3.4% for the basket, compared with inflation of 2.9%. On average my HYP netted one-fifth more income a year than the SS HYP, and the B8 1.6% more.

The basket has produced the least bumpy inflow while almost matching the SS in its size after trusts' internal reserving. LuniHYP generated £2,000 more than the others; but like any HYP it would need 'derisking' or some other method of holding back revenue to equalise fat and lean years, if required to cope with bills that only go up. My research over various timeframes suggests that for 'juicy' portfolios up to one-tenth of income parked in a reserve could have plugged shortfalls and maintain, sometimes increase, purchasing power over time. This from an initial spendable yield of 4% or slightly lower-- no guarantee it will work in the future, mind.

Expressed as deflated income, and ignoring the first year because of 'dividend drag', the three options come out as:

2012-13: 100/100/100
2013-14: 102/95//99
2014-15: 202/214/103
2015-16: 92/85/101
2016-17: 99/88/100
2017-18: 111/90/103
2018-19: 107/110/103
2019-20: 103/89/109
2020-21: 97/135/107

Whereas the basket's real income dipped only at the outset and momentarily, the HYPs were more jittery. They were puffed up in their fourth year by £740 in specials from Vodafone when it divested Verizon Wireless. The Sturdy HYP received £112 extra from Compass in 2017-18 and the LuniHYP gained materially from several bounties by Standard Life Aberdeen, now the absrd abrdn.

abrdn's membership shows how a HYP built around sturdies could score by adding less obvious names. Of course such a strategy can damage total collections if the picks are misjudged, as mine often were: in five years, against four at the SS HYP, my purchasing power sank below 2012-13's, although further in front of SSHYP lately than ever before.


DERISKING
After derisking, the Sturdy HYP could have paid out an average yield of 4.5% plus inflation proofing over its first ten years, finishing 2020-21 with eight months of current spendable income in its reserve. At best the reserve reached 11 months at the end of Year 5 and has been drawn upon three times in the last five; ideally it would stand at one month for each year's operation, and with inflation rocketing ahead of blue chips' dividend increases it could be drained more.

The equivalents for LuniHYP100 are an average yield of 5.0%+index-linking, to end Year 10 with 18 months in reserve-- as full as its previous biggest at Jul. 2015. I will not raise the withdrawal rate because of the unknowns cited, but the comparison indicates the downside of sticking to shares with illustrious pasts. Not that their 4.5%+RPI is to be sneezed at in today's market for savers, but a little more daring paid off for me.

The Basket of Eight needed little more derisking in a holder's hands than its members had already undertaken. It has averaged a 4.2%+RPI return and completed its first decade with a fulsome 13 months in the kitty. UK Equity Income trusts are at present very inclined to raise payouts some way behind 8% inflation and replenish their own revenue reserves; so the B8's income reserve, never yet called upon, may have to begin coughing up.


SHEEP AND GOATS
Which of the fifteen sturdies were toppers and shockers? Here are total payouts for each; CAGRs for income in Years 2-9, sans dividend drag; also the number of years when payments were cut, passed or stayed off the list, omitting lapses due only to foreign exchange conversion, if accounting was in USD or euro; finally, ranking by CAGR:

AZN: £744/1.9/0/9
BA.: £844/2.5/0/8
BHP*: £431/5.7/2/5
CNA: £457/-25.8/3/14
CPG: £709/-100.0/1/15
DGE: £531/5.8/0/4
IMB: £821/3.4/2/6
PSON: £359/-9.9/2/13
RKT: £499/3.4/0/6
REL: £714/9.3/0/2
SHEL: £616/-9.8/2/12
SSE: £739/-0.1/2/10
TSCO: £354/18.8/2/1
ULVR: £651/7.8/0/3
VOD: £1,238/-9.5/1/11

And for the two non-runners:

BATS: £688/5.9/0
GSK: £696/3.4/0

* Excludes £12 from South32 (S32), spun off in 2015.

Inflation was 3%, so only seven of fifteen lifted dividends by more. The deceptive leader is Tesco, which would have been the bottom marker had it not disgorged the proceeds of its Asian disposal. Second placed is Relx, a genuine increaser like Unilever, the bronze medallist, and fourth-placed Diageo.

Compass props up the pecking order, but this is also arguably misleading. As the world's largest industrial caterer it could not avoid a massive hit from lockdowns, but it has resumed dividends and ex-pandemic it looks sound. Centrica is the true duffer, going awry well before WuFlu was heard of; prospects for payouts are dubious. Yet in Nov. 2012 I had described it, in an inspection of the Seventeen on Motley Fool, as 'possibly the optimal blending of growthiness, competitive yield and steady progress'. Tempora mutantur. We used to celebrate Shell for those virtues; now it is Diageo.

After negotiating the Global Financial Crisis without any fails to speak of, the SS found the 2020 trauma much tougher. AstraZeneca, BAe Systems, Diageo, Reckitt, Relx and Unilever have achieved the ideal of real income growth without cuts. Astra had two small dips on currency conversion, but that is not its fault. The rest wobbled, one way or another.


THE LONG HAUL
Are Terry Smith and Valuemargin right to say that history repeats, and should VM have argued that upsets should not disqualify a company if it paid out over a run of years? Here are CAGrs for 2000-21 and for periods within it, including the two outwith the HYP for yielding too little.

From left to right, CAGRs are for the full period; for 2000-06, halcyon days between the Y2K/dotcom fright and the Global Financial Crisis; for 2006-11, spanning the GFC hit and its money-printing aftermath; and for 2011-21, ten years of uncertain recuperation on fiat money, interrupted by the whiplash of the pandemic:

AZN: 7.5/9.9/16.5/1.8
BA.: 8.2/4.3/11.0/3.0
BATS: 10.4/10.4/19.6/6.1
BHP: 17.3/17.3/26.1/13.1
CNA: -100.0/26.3/10.0/-100.0
CPG: -100.0/18.9/13.9/-100.0
DGE: 6.1/6.8/5.4/6.0
GSK: 3.7/3.7/7.8/1.8
IMB: 8.5/12.4/11.8/4.6
PSON: -0.7/2.9/7.6/-14.3
RKT: 10.5/11.5/23.7/3.8
REL: 8.6/9.7/6.9/8.7
SHEL: 0.9/5.1/9.4/-5.4
SSE: 5.3/9.1/10.0/0.8
TSCO: 3.2/11.6/10.6/-4.8
ULVR: 8.1/8.0/10.9/6.8
VOD: 8.8/28.7/9.0/-1.3a

Average (nominal): -7.4b/12.2/12.1/-11.3b
Average (real): -10.3b/9.4/8.7/-14.2b
Inflation (%): 3.0/2.7/3.4/2.9
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a Distorted by Verizon reorganisation, 2015
b Exaggerated by CNA and CPG paying nothing in 2020 and 2021; the other 15 CAGRs averaged 2.3% nominal, -0.5% real in 2011-21, 6.9%/3.9% in 2000-21

Since 2000 there have been 21x17=357 individual year-on-year changes in dividend rates. They resulted in 306 increased, restored or maintained payouts, 26 'real' cuts (in sterling terms) or recurrent failures to pay anything , and 11 trims caused only by forex translation from dollars at AstraZeneca, BHP, Shell and Unilever, or from Euros (since 2017) at Vodafone.

Thus 37 of 357 events, about one in ten, could be described as bad outcomes. On fourteen occasions-- half at that beached whale, Glaxo-- a payout was pegged. Among other, not many until 2021, the rise was below inflation. All this must be seen in the context of a 21-year average real CAGR for the sturdies of almost 4%... apart from Centrica and Compass, which ceased to pay anything.

Against those detractors, the enhancers were BAe, Diageo, Reckitt and Relx, whose dividends have advanced steadily except for momentary freezes earlier in the century at BAe, thrice, and Relx, once. Unilever's sole slip was a currency case. This happy band is much the same as in the SS HYP, which tends to confirm Mr Smith's faith in non-reversion. SSE, which used to be the most fervent of all about the dividend, has fallen from grace. It may be pardoned if we are like Valuemargin.

SSE was a recent shock, Fourteen bad outcomes out of 37 arose in 2020 or 2021, whereas 2002 and 2004-09 saw no setbacks whatever. The eye of the GFC storm, 2009-11, brought only two forex-based reductions and one freeze out of 34 annual changes.


CAPITAL
The prize is income almost as safe as an annuity's, and more of it. Some capital growth is a reasonable dream. It ought to happen eventually unless companies overdistribute dividends for years, undermining their earnings capacity. It ought not to be depended upon.

The sturdies, blue chips under the harsh scrutiny of a largely efficient market, would not get away with reckless overpaying for long. If the principal be retained for a term such as an annuitant expects, e.g. 20 years or longer, there should be some residual value. An annuity gobbles your capital on Day 1.

Entropy, creeping attrition, is always a risk. It is more on the cards than that Centrica or Pearson will turn into the next Tesla. Values may well oscillate a lot, if only with index trends. Nobody should anticipate a fat terminal bonus from a HYP or basket.

All that understood, this would have happened in what by now is halfway into the envisaged 20-30 year holding period. Starting investments vary slightly for dealing costs:

Jul. 2011 :£17,845/£17,890/£17,918 (purchase cost)
Jul. 2012: £18,372/£18,088/£18,221
Jul. 2013: £21,434/£23,039/£22,920
Jul. 2014: £21,843/£22,683/£23,240
Jul. 2015: £22,283/ £23,283/£23,777
Jul. 2016: £24,561/£24,364/£24,983
Jul. 2017: £25,791/£26,562/£24,775
Jul. 2018: £27,040/£27,476/£24,884
Jul. 2019: £28,182/£24,731/£23,786
Jul. 2020: £24,939/£22,584/£19,074
Jul. 2021: £26,537/£22,347/£24,037

Dec. 2021: £28,180/£22,984/£24,450
------------------------------------------------------

Deflated and indexed year-end values:

Jul. 2011 100/100/100
Jul. 2012: 100/98/99
Jul. 2013: 114/122/121
Jul. 2014: 113/117/120
Jul. 2015: 114/115/121
Jul. 2016: 124/122/125
Jul. 2017: 126/129/120
Jul. 2018: 127/129/116
Jul. 2019: 129/113/108
Jul. 2020: 110/102/83
Jul. 2021: 113/97/102

Dec. 2021: 116/96/100

CAGR (nominal): 4.5/2.4/3.0
CAGR (real): 1.7/-0.4/0.2

Not a wide range of results. After ten years the three runners were neck and neck. The Basket of Eight has limped in the last five years, its value-share bias becoming unpopular with wealth managers and others fixated on total return. By Jul. 2020 the B8's purchasing power was 17% less than at launch, partly because one constituent, Temple Bar, blew up more painfully than one expects of 'vanilla' income-and-growth trusts, though it had always inclined to growth punts. A new team has done a speedy rehab, but by Dec. the B8 was only back to around par-2006.

The portfolios have had hiccups as well. The sturdies, though, have never been worth less at a year end than when acquired; in Jul. 2020, dazed from the pandemic setback, the SS HYP was worth a tenth more than at launch. The LuniHYP wilted a little more and missed the Value rally to the end of last year. Its capital showing contrasts with its surge in receipts. Is this where overpaying has been detected?

Overall my performance since 2006 has been the worst of the three. I was in the lead until 2019, so LuniHYP's slowdown predated the pandemic. This is conceivably the consequence of going outside sturdies, though not outside the Footsie, when it was selected: extra volatility was introduced by straying from the most obvious bond-proxy shares.

CAGRs for the other two options after inflation are positive if small. The sturdies get the trophy with 1.7%, the B8 (for all its discount control, gearing and some exposure to foreign markets) has made like an All-Share tracker with more income bolted on.

Signs of corporate scelerosis are everywhere among the sturdies. Management blunders abound: Reckitt's overpriced babyfood acquisition, Glaxo's inability to discover new wonder drugs or cash in on the virus, Unilever's aborted move to the Netherlands and its non-deal with Glaxo, Pearson's flogging off trophy assets to bet the farm on distance learning, Tesco's loss of market share to upstart Germans, the tobacconists' sluggish adoption of vaping, Shell's years supporting an excessive dividend, Vodafone's inability to decide where in the world it wants to do business, Centrica's all-round lack of grip.

Reciting this dismal litany, one must add that only CNA screwed up royally and probably incorrigibly. One flop out of 17 is not bad. Behind the headlines the employees of these behemoths delivered profits which underwrote confidence that they were not sliding slowly down the drain. Two ragged cheers for UK plc.

Except for South32's severance from BHP and Vodafone's slimming, there have been no takeovers, nor fund-raisings such as rights issues, among the sturdies. Capital results are reflections of how they traded, not financial engineering.

One gleans further insight into the Seventeen's shifts of popularity from price and yield movements:

Change (%) in share prices, Jul. 2006-Jul. 2021/rank... initial and Dec. 2021 trailing yields (%):

AZN: 183/3...5.3,2.4
BA.: 86/6...5.9,4.5
BATS: 2/10...4.1,7.5
BHP: -9/11...2.5,8.1
CNA: -78/17...4.4,0.0
CPG: 175/4...3.2,0.0
DGE: 218/2...3.1,2.1
GSK: 6/9...2.4,5.6
IMB: -23/12...4.0,8.7
PSON: -46/16...9.8,3.2
RKT: 82/7...3.3,2.7
REL: 333/1...3.7,2.3
SHEL: -27/13...4.7,4.4
SSE: 18/8...5.1,5.4
TSCO: -29/14...3.6,3.9
ULVR: 98/5...3.7,3.4
VOD: -31/15...5.5,6.7

Average: 48...4.5,3.6
FT All-Share Index: 34...3.1,2.8

Best for capital accretion were Relx, Diageo, Astra, Compass, Unilever: the ones that generated the most dependable income, with Compass forgiven on the understanding that it can bounce back fast. The dogs were Centrica, Pearson, Vodafone and Tesco, disappointers and administrators of shocks. Mr Market seems to have taken sturdiness seriously, and lack of it too.

I chose the Seventeen before developing a theory of zones whereby yields did or did not hit the happy 'Goldilocks' medium: big enough for a High Yield Portfolio, not so dropsical as to raise doubts about dividend safety. In Jan. 2006 the SS HYP yielded 4.5%, 1.1 points above the All-Share Index: as it happened, within what I would define as the Optimal Zone, 90-150% of market. By the end of 2021 anyone silly enough to buy the same fifteen would get 3.6%, non-payers and all, against 2.8% from the index. So the High(ish) optimality of HYP has been sustained.

At the starting date, eight of the 15 picks returned 4% or more. The one flashing bright red and liable to be shunned by my 'sturdometric' yardstick was Pearson. A very premature signal, since it did not cut its payout until late 2017. The yields of Tesco, Centrica and Shell did not shriek noli me tangere, but they also took some years to stumble.

The Danger Zone is fuller these days. Imperial Brands, Vodafone, SSE and outside the portfolio BATS sell on yields which hint at peril ahead.


CONCLUSION
To a purist, whether a HYP should stick to sturdy shares is easily answered: one ought not to buy a HYP at all. After two years' mayhem there are too few FTSE 100 candidates to fill the quota: five years of rising dividends are too rare.

If following Valuemargin one permits 'circumstances beyond our control' to set that guideline aside, as pyad himself has done. The story of 16 years does not discredit shares with the form the Sturdy Seventeen have exhibited. One collapse, one brief stint in purdah, the other 15 battling through, and overall a continued delivery service of rising real income and realisable value which should persist.

One can never avow that a different approach, giving a different choice of companies. would not have shone more brightly. But my old maxim of Good Enough is Better than Even Better applies if all you want is purchasing power to hold up most of the time and creep up now and again. The attractions of such traits become more appreciable as one becomes older, tireder and less amenable to surprises. Like the sturdies, in fact.
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(1) There was also a Fallible Fifteen of less worthy aspirants. I mislaid records as to which they were. They might have beaten the pants off the S17, which would banjax the whole theory.

(2) Latest annual reports:

B8
viewtopic.php?f=54&t=32455&p=464307#p464307

LuniHYP100
viewtopic.php?f=15&t=30353&p=428169#p428169

(3) VM's other Stars and Good ones from 16 years ago.

STARS
Antofagasta
Barclays
Daily Mail & General Trust
Dixons Retail (now Currys)+
HBOS
HSBC
Lloyds Banking
Morrison (William)
Next*
Persimmon+
Reuters
Royal Bank of Scotland (now National Westminster Bank)
Schroders
Wolseley (now Ferguson)

Next and William Morrison were also-rans for the Sturdy Seventeen. Morrison would have been passed over for Tesco on yield. There was no general retailer in the Sturdy HYP. Making room for a 16th constituent would have snaffled all the special divis NXT went on to declare.

GOOD
Associated British Foods
British Land
InterContinental Hotels (now IHG Hotels & Resorts)
Johnson Matthey
Kingfisher
Land Securities+
Legal & General+
Lonmin (taken over, 2019)
Mitchells & Butler
Rexam (taken over 2016)+
Rio Tinto
Smiths
Standard Chartered+

+ Also in 'HYP-othetical' HYP06 notionally launched Jul. 2006

These companies have had vicissitudes, especially banks. But none ended in complete catastrophe-- no Marconis or Carillions-- while several would have supplied as much income as the fifteen chronicled here. Valuemargin's concept of sturdiness itself emerges as pretty robust.

[Breelander]

There was also a Fallible Fifteen of less worthy aspirants. I mislaid records as to which they were.....

Allow me to refresh your memory.

At HYP Barracks the Doughty Dozen (see #16663) march smartly to the rear, clutching their decorations, and the Fallible Fifteen shuffle on to the parade ground. These FTSE 100 shares, all big lads, have frequently been chosen for HYPs since the system was unveiled ten years ago. They are on a charge of not growing their income as strongly or evenly as the twelve heroes. I was mostly right; the Fifteen is a defaulters parade.

https://web.archive.org/web/20161113231 ... 58843.aspx

[Dod101]

There was also a Fallible Fifteen of less worthy aspirants. I mislaid records as to which they were.....

Allow me to refresh your memory.

At HYP Barracks the Doughty Dozen (see #16663) march smartly to the rear, clutching their decorations, and the Fallible Fifteen shuffle on to the parade ground. These FTSE 100 shares, all big lads, have frequently been chosen for HYPs since the system was unveiled ten years ago. They are on a charge of not growing their income as strongly or evenly as the twelve heroes. I was mostly right; the Fifteen is a defaulters parade.

https://web.archive.org/web/20161113231 ... 58843.aspx

Brilliant. This is why I frequent these Boards, never mind the message.

Dod

[Luniversal]

Breelander kindly dug out the Fallible Fifteen, so here is a quick glance at how they managed in 2011-21 compared with the Sturdy Seventeen. Stats are courtesy of dividenddata.co.uk and therefore E&OE; it may obtain growth rates and dates slightly differently, but the S17 figures broadly resemble mine.

The first two figures for each share are compound annual growth rates (CAGRs, %) for dps over five and ten years until the latest payout; the r.h. figure is the number of years since the last time the dps failed to rise, year on year:

FALLIBLE FIFTEEN
AstraZeneca (AZN): 0.5,0.3/1
Aviva (AV.): -0.1, 2.0/1
British Land (BLND): -10.0,-4.2/0
BT (BT.A): -30.7,-11.2/0
HSBC (HSBA): -15.5,-5.3/0
Imperial Brands (IMB, ex IMT): -2.2,3.9/1
J Sainsbury (SBRY): -2.0,-3.6/0
Land Securities (LAND): -2.5,1.4/1
Marks & Spencer (MKS): -100.0,-100.0/0
National Grid (NG.): 2.6,2.8/>22
Next (NXT): -100.0,-100.0/0
Reckitt Benckiser (RB.): 2.7,3.4/0
RSA Insurance (RSA): taken over, Jun. 2021
SABMiller (SABM): taken over, Oct. 2016
United Utilities (UU.): 2.3,3.5/10

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STURDY SEVENTEEN
AstraZeneca (AZN): 0.5,0.3/1
BAe Systems (BA.): 2.8,3.0/17
BHP (BHP, ex BLT): 58.6,13.1
British American Tobacco (BATS): 4.5,4.9/>22
Centrica (CNA): -100.0,-100.0/0
Compass (CPG): -15.1,-3.2/0
Diageo (DGE): 4.2,6.0/>22
Glaxo SmithKline (GSK): 0.0,1.3/0
Imperial Brands (IMB, ex IMT): -2.2,3.9/1
Pearson (PSON): -17.8,-6.7/0
Reckitt Benckiser (RKT, ex RB.): 2.7,3.4/0
Relx (REL): 6.7,8.7/11
Shell (SHEL): -13.8,-6.1/1
SSE (SSE): -1.8,0.7/1
Tesco (TSCO): incomparable,-4.6/0
Unilever (ULVR): 5.9,6.0/>21
Vodafone (VOD): -8.5,-2.2/0


Dividend Data does not cover BHP, which is outside the FTSE 100 index, and it has the habit common to historical databases of scrubbing delisted companies; therefore no results for biddees. I have used my BHP results from the OP. Tesco has no five-year CAGR because it paid nothing in the base year.

On the whole stats validate my preferences of early 2011. The average dividend from the Fallibles shrank at -17.8% pa over five years and -15.9% over a decade, against -4.4% and -4.2% for the sturdies.

More meaningfully, four and eight respectively of the 13 Fallibles-- apart from the two taken over-- scraped dividend growth from these torrid times; whereas nine of 16 (ex Tesco) and eleven of 17 Sturdies managed it. Much of what was good in the F15 emanates from three promoted to the S17 on expansion from the Doughty Dozen, viz. Astra, Imps and Reckitt.

Only two regulated utilities, National Grid and United Utilities, among the Fallibles lived the HYP-ish dream of unruffled rises stretching back ten years or longer. The Sturdies boast five such heroes: BAe, BATS, Diageo, Relx and Unilever. Each contingent had one company whose sound record was marred only by the pandemic: Next and Compass.

SSE joined the S17 rather than NG. or UU. because it appeared to promise bigger income, yielding 5% to the others' 3%. In fact UU. has paid a little more than SSE, NatGrid quite a lot more-- though all contributed more than the average stock in the 15-position portfolio. A slight case of Don't Chase the Yield when the All-Share was paying <=3%.

I feel I was right to mistrust property: despite converting to REITs with the promise of more rents being passed on to holders, British Land and Land Securities have been indifferent income generators. The big composite insurers Aviva and RSA, whose payouts had been altogether too cyclical in the 1990s and 2000s, continued to act unpredictably, with Aviva's CAGRs blah overall. BT is the Fallible Fifteen's Centrica, another saga of post-privatisation ineptitude.

One bank was let in as a second division candidate, HSBC, because it had come through the GFC without bailouts. But it seems unable to stay out of hot water with the authorities. Anyway, it has done poorly. All the banks have had any urge to repair payouts sat on by HMG.

In food retail, there was little to distinguish Tesco from Sainsbury, but the F15's other shopkeepers, Marks & Spencer and Next, finished the first ten years off the lists. For Next this was temporary; like Compass it has recommenced dividends, after a cascade of twelve specials before the virus. M&S is still trying to get back on the ball after more makeovers than Madonna.

I have calculated actual payouts for the three most able performers which did not feature in the Sturdies HYP, on assumptions outlined in the OP.

(1) National Grid: in Years 1-10 would have paid £874, CAGR (ex Year 1) 2.3%, no falls or freezes. Share price change after ten years +57%. Less at the regulator's mercy than some utes, with ESG transition angles, e.g. cash from getting out of gas transmission.

(2) United Utilities: £780, 2.9%, no falls or freezes (smoother progress than in earlier years). SP change +80%. Pedestrian but worthy; no Pennon.

(3) Next: £903, passed divs in 2020-21, but should dispense at least £130 this financial year. SP change +216%, trumped only by Relx. Pedigree management moving deftly to online shopping, attentive to income investors.

[tjh290633]

I have turned your table into something comprehensible, by using a tab between each value and using the table fomatting tool at http://lemonfoolfinancialsoftware.weebl ... ormat.html with the <pre> option and 3 spaces separating the values.

FALLIBLE FIFTEEN
Share                                        CAGR5   CAGR10    Yrs since no rise

AstraZeneca (AZN):                              0.5,   0.3/        1
Aviva (AV.):                                  -0.1,    2.0/        1
British Land (BLND):                          -10.0,   -4.2/       0
BT (BT.A):                                    -30.7,   -11.2/      0
HSBC (HSBA):                                  -15.5,  -5.3         0
Imperial Brands (IMB, ex IMT):                 -2.2,   3.9/        1
J Sainsbury (SBRY):                            -2.0,   -3.6/       0
Land Securities (LAND): -2.5,1.4/1        
Marks & Spencer (MKS):                       -100.0,   -100.0/     0
National Grid (NG.):                            2.6,   2.8/      >22
Next (NXT):                                  -100.0,   -100.0/     0
Reckitt Benckiser (RB.):                        2.7,   3.4/        0
RSA Insurance (RSA): taken over, Jun. 2021
SABMiller (SABM): taken over, Oct. 2016   
United Utilities (UU.):                         2.3,   3.5/       10
                                          
                                          
STURDY SEVENTEEN                          
Share                                        CAGR5   CAGR10    Yrs since no rise

AstraZeneca (AZN):                              0.5,   0.3/        1
BAe Systems (BA.):                              2.8,   3.0/       17
BHP (BHP, ex BLT):                             58.6,  13.1
British American Tobacco (BATS):                4.5,   4.9/      >22
Centrica (CNA):                              -100.0,   -100.0/     0
Compass (CPG):                                -15.1,   -3.2/       0
Diageo (DGE):                                   4.2,   6.0/      >22
Glaxo SmithKline (GSK):                         0.0,   1.3/        0
Imperial Brands (IMB, ex IMT):                 -2.2,   3.9/        1
Pearson (PSON):                               -17.8,   -6.7/       0
Reckitt Benckiser (RKT, ex RB.):                2.7,   3.4/        0
Relx (REL):                                     6.7,   8.7/       11
Shell (SHEL):                                 -13.8,   -6.1/       1
SSE (SSE):                                     -1.8,   0.7/        1
Tesco (TSCO): incomparable,                            -4.6/       0
Unilever (ULVR):                                5.9,   6.0/      >21
Vodafone (VOD):                                -8.5,   -2.2/       0

I also deleted the long line of dashes.

May I suggest that you might usefully try out the table formatting tool, which is simple to use if you are using a spreadsheet or, if you have text values, placing a TAB before each desired column in Notepad.

TJH

[Luniversal]

"Centrica is the true duffer, going awry well before WuFlu was heard of; prospects for payouts are dubious." (ibid.)

Never say die, the corpse is twitching.

Today's prelims from CNA include promise of 'a clear path to restarting the dividend.' When? 'Soon', i.e. presumably a final for FY2022. It will not amount to much, and may never do, but it should make up a wee bit for threatened shortfalls in payouts from Glaxo+Haleon and SSE.

The gasman's repentance means every Sturdy Seventeener will be paying again, but which will do a Rio Tinto to counteract creeping decline?

[OhNoNotimAgain]

God what a complicated faff when there are much simpler alternatives.

[moorfield]

God what a complicated faff when there are much simpler alternatives.

Ha ha I hear you. It strkes me there are a lot of solutions here on LF in need of problems...

[88V8]

God what a complicated faff when there are much simpler alternatives.

Ha ha I hear you. It strikes me there are a lot of solutions here on LF in need of problems...

It's a hobby.
An intellectual hobby, with overtones of hunter/gatherer.
We all need hobbies.

An ex-banker near me has bought an expensive brand-new coffee van, and spends a good part of each week selling beverages to dog owners at a nearby beauty spot.
We all need hobbies.

V8

[moorfield]

God what a complicated faff when there are much simpler alternatives.

Ha ha I hear you. It strikes me there are a lot of solutions here on LF in need of problems...

It's a hobby.
An intellectual hobby, with overtones of hunter/gatherer.
We all need hobbies.

And there we have it. The raison d'etre for many HYSS/HYPP contributors here perhaps?

[88V8]

We all need hobbies.

And there we have it. The raison d'etre for many HYSS/HYPP contributors here perhaps?

Yes indeedy.
And what's yours?

V8