Projected dividends

[Dod101]

To answer Wizard, that is something for well down the line. At the moment those like me who are more or less fully invested can do nothing but sit and watch developments. I was happy with my portfolio prior to the intervention of coronavirus and have to remain that way until the smoke clears and we can make some assessment of the long term damage done to individual companies. That is currently impossible to try to assess. Some will be more affected than others I would imagine but I cannot begin to make any sensible observations on the future until we return to some sort of normality. There is also the unknown long term effect of the Government intervention.

With interest rates where they are, surely the best place to try to achieve income has got to be equities. With China recovering apparently, Baillie Gifford for instance is reporting that their China offices and the Hong Kong office are now open again and getting back to normal, it may be that after the peak of our coming crisis is past, we too may get back to some sort of normality more quickly than seems possible at the moment, but who knows? There is talk of a possible second wave but by that time we may be nearer mass vaccination. That will be the time to try to answer Wizard's questions, not now. That is my view anyway but I wish I were a fount of wisdom which I am not.

Arb has beaten me to it but it seems we are more or less agreeing.

Dod

[MDW1954]

It's going to be an interesting year. After all, those of us in the HYP game since the credit crunch or longer, have been planning for this - we knew a crash would come sooner or later. Now we'll see how robust our systems are, or whether it'll all get washed away with the flood. Exciting times.

Arb.

Fully agree. This is where broadly-based HYPs, focusing on quality companies, come into their own. I haven't counted up my overall number of HYP holdings for many months, but spread across an ISA and a SIPP, it has to be on the order of 50 or so -- FTSE 350, REITs, quasi-REITs (eg BSIF etc) etc.

Elsewhere, ITs and funds may cushion the blow. Interesting times. But for those of us with long memories, not entirely unprecedented -- albeit heading for a more extreme version.

MDW1954

[peterh]

With China recovering apparently, Baillie Gifford for instance is reporting that their China offices and the Hong Kong office are now open again and getting back to normal, it may be that after the peak of our coming crisis is past, we too may get back to some sort of normality more quickly than seems possible at the moment, but who knows? There is talk of a possible second wave but by that time we may be nearer mass vaccination.
Dod

What will be crucial is to see if there is a second wave in China as they relax the isolation - they were able to be more aggressive with it than 'western' countries. Have a look at this take on their approach:
https://twitter.com/MikeIsaac/status/12 ... 0571772928

[Dod101]

This is where broadly-based HYPs, focusing on quality companies, come into their own. I haven't counted up my overall number of HYP holdings for many months, but spread across an ISA and a SIPP, it has to be on the order of 50 or so -- FTSE 350, REITs, quasi-REITs (eg BSIF etc) etc.

I am not at all sure that the typical HYP does focus on quality companies, broadly based ones or otherwise and it has certainly to be proved come the end of this crisis. HYP companies are typically by definition high yielders and would you call Imperial Brands, Centrica, the miners and say some of the utilities, not excluding BT and Vodafone, quality? Not sure I would.

Some are well capitalised such as Shell and HSBC, but Unilever and Diageo are not HYP companies and they are probably amongst the few 'quality' companies on the LSE along with Next.

Whether any of them 'come into their own' it is much too early to say. Certainly it depends on how you judge them, whether they fell less than the rest of the market in the current rout, or maintained their dividends or what.

Dod

[tjh290633]

If you look back at 2008, some companies continued paying dividends, some missed a single dividend, some rebased their dividend and some stopped paying dividends for some time.

The same is likely to be the case now. The trick is to decide which company will do what. So far some have stopped buy backs, a sensible move at any time, since I believe that they are a waste of money. Some have indicated that the next planned dividend will not be paid and one or two have supended dividends already announced. Are these distress moves or prudent harbouring of resources?

Back then I culled a number of companies which stopped more than one dividend. There were two exceptions, Lloyds Banking Group and Taylor Wimpey. I considered that both would recover and events proved that correct, even if a little slow. Later Tesco stopped their dividend and took 3 years to resume payments. Those culled were replaced by companies which seemed more reliable at the time, like Diageo, IMI, Pearson (don't laugh), BHP, BATS, Unilever, GSK, British Land, Aviva and Reckitt Benckiser. Later additions to replace shares taken over included Rio Tinto, Carillion (yes I know) and Legal and General.

The time may be ripe to do some more replacements. Perhaps not immediately, but I could have scope for one new share if I trim back AZN, GSK and Admiral, all well above my weight limit. It will probably do no harm to delay, as we see substantial movements in share prices in both directions.

TJH

[Arborbridge]

I haven't counted up my overall number of HYP holdings for many months, but spread across an ISA and a SIPP, it has to be on the order of 50 or so -- FTSE 350, REITs, quasi-REITs (eg BSIF etc) etc.


MDW1954

Fifty! You kept that quiet

I have to say that 42 was quite enough for me and I was rather glad when it dropped back a bit.

[miner1000]

Sorry to deviate slightly off topic, but as this subject may be discussed for a while yet i feel it worth while to point out the difference between affects and effects.

Dividends can be affected (verb) by the Coronavirus, or companies can feel the effects (noun) on their sales and this might affect (verb) their ability to maintain dividends.

Profound apologies for this but the misuse really does bother me.

As for my two pennyworth, I think the amount of any dividend cut will be determined by the shape of the economic downturn. If things can be turned around by the summer and people go back to work, there may be an effort, certainly by the larger companies, to maintain the dividend. Some highly affected companies (travel and hospitality) will cut or more likely suspend immediately, but these could also be resumed if things quickly return to normal. Best case scenario obviously, but maybe the new movement measures could help and perhaps that vaccine might appear early next winter. If the downturn is U shaped with a long trough, then dividend cuts by many companies will follow although the timing will be different in almost every case.

[Arborbridge]

Sorry to deviate slightly off topic, but as this subject may be discussed for a while yet i feel it worth while to point out the difference between affects and effects.

Dividends can be affected (verb) by the Coronavirus, or companies can feel the effects (noun) on their sales and this might affect (verb) their ability to maintain dividends.

Profound apologies for this but the misuse really does bother me.

Thanks for that, and I don't care if it's OT since it is important to make to use clear language. It's not too pedantic at all. You won't swing for it.

Arb.

[Golam]

Thanks all for the various opinions. Am now feeling just a little optimistic following: the reading of the said opinions, the UK government's proposed actions and this morning's market movements.
Contemplated actions arising out of the opinions include : Portfolio analysis to assess the likely dividend cutters, to seek and evaluate cutter replacements, to evaluate the duration of the lock down and of the associated slow down of the economy. The speed of correction of current problems is critical. Am 100% certain that virus will be conquered. Therefore business will resume. So am optimistic and am 'hanging in there.' G

'Cut, Cancelled, Suspended Dividends' thread is most useful Thanks again to all.

[Dod101]

Sorry to deviate slightly off topic, but as this subject may be discussed for a while yet i feel it worth while to point out the difference between affects and effects.

Dividends can be affected (verb) by the Coronavirus, or companies can feel the effects (noun) on their sales and this might affect (verb) their ability to maintain dividends.

Profound apologies for this but the misuse really does bother me.

Thanks for that, and I don't care if it's OT since it is important to make to use clear language. It's not too pedantic at all. You won't swing for it.

Arb.

It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod

[Wizard]

Sorry to deviate slightly off topic, but as this subject may be discussed for a while yet i feel it worth while to point out the difference between affects and effects.

Dividends can be affected (verb) by the Coronavirus, or companies can feel the effects (noun) on their sales and this might affect (verb) their ability to maintain dividends.

Profound apologies for this but the misuse really does bother me.

Thanks for that, and I don't care if it's OT since it is important to make to use clear language. It's not too pedantic at all. You won't swing for it.

Arb.

It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod

Did a quick scan, think you are the only one to use "effect" and "affect". I had a "reflect" and "suspect", so a close escape

[Arborbridge]

It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod

I'm not too sure it matters which post prompted his comment because it was a general remark which avoided being personal.

Arb.

[scrumpyjack]

Redrow scrapping a dividend that had already gone xd is quite negative for builders dividends.

It is very very unusual to scrap a dividend where the shares had gone xd

Persimmon have gone xd a 125p div payable 2nd April and promised a 110p on 6th July. I guess the best case scenario is that they pay the first and scrap the second?

Quite possible they scrap both.

[moorfield]

It's not too pedantic at all. You won't swing for it.

Therefore business will resume. So am optimistic and am 'hanging in there.' G

I can see what you've both done there.

[Dod101]

Redrow scrapping a dividend that had already gone xd is quite negative for builders dividends.

It is very very unusual to scrap a dividend where the shares had gone xd

Persimmon have gone xd a 125p div payable 2nd April and promised a 110p on 6th July. I guess the best case scenario is that they pay the first and scrap the second?

Quite possible they scrap both.

That seems almost illegal in that they obviously set up a false market in their shares for those who dealt after they went ex div. Can't quite get my round that one but I wonder if there will be any repercussions?

Dod

[monabri]

Not the first to do this, didn't Provident Financial do the same about 2 years ago?

[scrumpyjack]

I believe it is quite legal for the directors to cancel an interim dividend, but they can't do that with a final dividend as it has been passed by a shareholder's resolution. I understand that it why the Easyjet £174m dividend is not being cancelled.

I agree with the sentiment about a false market but don't think there is any comeback on anyone. The dividend is relatively small beer for Redrow so it is hard to see why they have taken such an extreme step. Hence my thought that it is very negative for other builder's dividends.

[miner1000]

It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod

I did not want to call anyone out, but it was in the 4th post of this thread.

Miner

[Wizard]

It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod

I did not want to call anyone out, but it was in the 4th post of this thread.

Miner

I almost certainly mess up on using these two incorrectly at times. But I know how these things get into your head and then really grate. I often find myself screaming at the TV when somebody uses 'less' when it should be 'fewer'.

[Dod101]

It would have helped if miner had noted which posts he is referring to. I used affect and effect in one of mine, correctly I would argue, as I am well aware of the difference and I too dislike the misuse.

Dod

I did not want to call anyone out, but it was in the 4th post of this thread.

Miner

Happy it wisnae me!

Dod