The Kraft Heinz Company Statement Regarding Unilever plc

[vrdiver]

It's probably not a candidate right now, but it has been in the past and it's probably in quite a few HYPers' portfolios. (Although maybe less now than last week if anybody redeployed the capital into something else after the bid!)

I don't recall when it has ever been a candidate, or, one that qualified per the HYP metrics. Does anyone, for example when did it last cross the dividend yield% requirement?

I bought ULVR on 09-Feb-2010 at 1,915p. The next four dividends added up to 71.24p (€0.832), giving a starting yield of 3.72%. Once of those "Buy now while stocks last" occasions.

I don't think that I was alone at the time.

TJH

I came to the party a little later, buying on 11-Aug-2010 at £16.93 including costs. The next four dividends totalled £218, so a yield of about 4.45%. I topped up 23-March-2012 with the next 4 dividends now yielding 78.9p per share, or 3.81% on the new purchase price.

Not a spectacular yield, but a quality company that forms part of the core of my HYP (whose overall yield is around 4.5% currently).

VRD

[kempiejon]

As far as I'm concerned there is no dividend yield requirement for individual holdings. As long as the portfolio can be considered High Yield (which I would say is anything over market yield).

StepOne

That's exactly the way that I view it but then I'm not one of these sophisticated (or wealthy) people who have a number of different portfolios and I'm not a HYP purist. I hold some Reckitt Benckiser which definitely isn't HY but since my holding has more than doubled in value in the 6 years I have held them, I'm not about to sell to increase my income. It is my intention to move to ITs when I am too old to manage my portfolio and at that point capital will matter.

RC

Picking a fight then RC and Stepone, if you've 15 high yielding shares, all well above market average, you can buy a non-yielding share as the portfolio average is still above the market average?

RC why are you not just buying ITs now, do you think you're doing better, are you using HYPing as a capital strategy to organise enough cash to fund your IT Income strategy?

btw I bought ULVR on a 3.8% yield in late 2009 and wouldn't think of selling unless something like an international takeover forced my hand.

[JohnnyCyclops]

As I posted last month (here - viewtopic.php?f=15&t=2824&p=27268#p27008), over the last six years the trailing twelve month yield has been above the FTSE All Share average yield around 40% of the time, so in the sense of HY being above market average, that does happen for periods of time.

It will come down to how each HYPster applies their own HYP criteria. For me it's partly down to the highest or higher yielding stock(s) in a sector not already owned.

Looked at in the long-term, and unless this little kerfuffle materially changes the market's view, I'd say above 3.00% TTM is possible fairly often (and just needs a wee bit of patience when it's below that level), above 3.50% is to be cherished and probably snapped up, and above 4.00% is a very rare event indeed, and probably indicates some other broader issues with equity markets generally (e.g. 2008/9).

[Markblox]

I bought in March 2009 at £12.32 a share! I only bought 1/4 of a holding size for me. Wish I'd bought more.

I bought the first of three purchases on the 20th of April 2009 @ £12.91,

[ReformedCharacter]

As far as I'm concerned there is no dividend yield requirement for individual holdings. As long as the portfolio can be considered High Yield (which I would say is anything over market yield).

StepOne

That's exactly the way that I view it but then I'm not one of these sophisticated (or wealthy) people who have a number of different portfolios and I'm not a HYP purist. I hold some Reckitt Benckiser which definitely isn't HY but since my holding has more than doubled in value in the 6 years I have held them, I'm not about to sell to increase my income. It is my intention to move to ITs when I am too old to manage my portfolio and at that point capital will matter.

RC

Picking a fight then RC and Stepone, if you've 15 high yielding shares, all well above market average, you can buy a non-yielding share as the portfolio average is still above the market average?

RC why are you not just buying ITs now, do you think you're doing better, are you using HYPing as a capital strategy to organise enough cash to fund your IT Income strategy?

btw I bought ULVR on a 3.8% yield in late 2009 and wouldn't think of selling unless something like an international takeover forced my hand.

Picking a fight? Last thing on my mind..!

'RC why are you not just buying ITs now, do you think you're doing better?'

I think so and I enjoy the small amount of trading that I do. To make sure I'm being reasonably objective about my performance, I do compare my
portfolio against the FTSE 100 TR, it will take me a few more years to obtain something meaningful but so far I'm happy with that particular comparison. The main reason to move towards ITs is that at some point either I will become incapable of handling my own affairs or will kick the bucket and I'd like to leave my wife with an equity income that she can manage without any difficulties (she's a highly successful and intelligent woman but has insufficient experience and interest to invest in equities directly). I'm happy to buy ITs when I think the market presents an opportunity (and I have the cash!) and I have a couple already but I'm getting off topic for this board.

RC

[77ss]

It's probably not a candidate right now, but it has been in the past and it's probably in quite a few HYPers' portfolios. (Although maybe less now than last week if anybody redeployed the capital into something else after the bid!)

I don't recall when it has ever been a candidate, or, one that qualified per the HYP metrics. Does anyone, for example when did it last cross the dividend yield% requirement?

I bought ULVR on 09-Feb-2010 at 1,915p. The next four dividends added up to 71.24p (€0.832), giving a starting yield of 3.72%. Once of those "Buy now while stocks last" occasions.

I don't think that I was alone at the time.

TJH

I bought in January 2011 at a very similar price (1913p after costs). Historic yield of 3.67%. Never been tempted to sell (other than to top-slice).

As a matter of interest, the current yield (3.06% at 3548p) is above that of the FT250 (2.59%) - and even slightly above that of an equal weighted FT100 (2.87%). 'High yield' depends on what marker you choose.

I suspect that anyone who has held ULVR for some time will be well satisfied to hold it. My current XIRR is now 14.93%. Jet-propelled piglets ?

[Deev8]

I bought ULVR on 09-Feb-2010 at 1,915p. The next four dividends added up to 71.24p (€0.832), giving a starting yield of 3.72%. Once of those "Buy now while stocks last" occasions.

I don't think that I was alone at the time.

TJH

I bought at a different time, but with similar results. Buying at 1,799p in March 2011 - the next four dividends gave me a starting yield of 4.3%, and I was very happy with that. I topped-up in October 2013 at 2,345p. The next four dividends gave me a starting yield of 3.8% on that purchase - not quite as good, but still a yield that I was happy with.

Dave

[Arborbridge]

I don't recall when it has ever been a candidate, or, one that qualified per the HYP metrics. Does anyone, for example when did it last cross the dividend yield% requirement?

DE, I'm not sure what the "metric" was in November 2009, but that's when I first bought ULVR. The forward yield was 3.9% which was clearly what I thought at that time was a satisfactory yield for me (historic 3.3%). I next bought at an historic yield of 4.27% in September 2010.

It was ULVR with its fair to middling yield which caused me to start looking at it in terms of "as good as it gets" yield for a desirable company. It the case of ULVR you could have caught it at over 4.5% in March 2009, but I missed the spike!

So, yes, I'm pretty sure for a limited window, it would have qualified as HYP share whichever way you looked at it.

Arb.

[JMN2]

A sign of a "true HYPster", I don't know where I bought at. I transferred the shares from ST to HL ISA and the cost basis was not carried over and I did not record it. Capital does not matter, why would I need to know the capital return...

[Arborbridge]

I see the knives are out for ULVR.
It seems that ULVR's complex capital structure and dual ownership (with the greater protections under Dutch law also having to be satisfied) may have rung too many warning bells in the case of a hostile bid. Whether this is entirely true, it certainly wouldn't have helped.
The self-serving jackals want ULVR to make its capital structure "more transparent". This is code for "easier for us to take over and make a killing". I hope the ULVR board do not throw away our defence mechanisms.

On another tack, I see the board is being urged by some to "leverage up" and return cash to shareholders. This is the absurd situation capitalism can get into. Borrow more money to make shareholders feel happy with the dosh thrown off, and at the same time make it a less easy take-over target for predators. Next, they'll be advocating running a deliberately high pension deficite for the same reason.

Crazy economics in a crazy world which mitigates against those running a sensible balance sheet with a long term horizon.

Arb.

[Dod1010]

I do not know how to cross post (if it can done), but we now have two threads running. I have just posted much the same as Arb on the other thread.
An old fashioned strong Balance Sheet is what has allowed Unilever (and for that matter Shell) to survive and prosper for as long as it has. As I said forward 20 years. Which do you think will be the survivor, Unilever or Kraft? Either of course could have been taken over!

Dod

[melonfool]

I can't see a different Unilever thread - is it on another board?

One of the mod can move one or merge them if you report it.

Mel

[Dod1010]

Mel

I see where the other thread is. I use the Quick links button. It is on the Share Ideas Board and was overtaken by the non offer by Kraft Heinz.

The Quick links button is useful to pick up active topics across the Boards, although it tempts me to comment on stuff I may not know much about! Still I occasionally learn something.

Dod

[StepOne]

Picking a fight? Last thing on my mind..!

Hi RC,

I initially read kempiejohn's post the same way as you... but when I re-read it I think he meant HE was the one picking the fight. I think he was using the phrase in the same way you might use 'Playing devil's advocate...'

StepOne

[Mapfumo]

A sign of a "true HYPster", I don't know where I bought at. I transferred the shares from ST to HL ISA and the cost basis was not carried over and I did not record it. Capital does not matter, why would I need to know the capital return...

Doesn't apply in your case (shares held in an ISA), but I bought Unilever in the mid-90s and have a paper certificate. Would have been a bit painful to have had a forced sell due to a takeover, as I would probably need to work out the cost from historical share price records, to do the CGT calculation. I vaguely recall there was some kind of complex share consolidation to align things better between Unilever plc and Unilever NV at some point, which might need a bit of work too.

[kempiejon]

Hi RC,

I initially read kempiejohn's post the same way as you... but when I re-read it I think he meant HE was the one picking the fight. I think he was using the phrase in the same way you might use 'Playing devil's advocate...'

StepOne

Sorry to confuse, yes that's exactly what I meant. I read the bit below and understood that the pair of you, StepOne and RC, could be happy to have a non yielding share in their HYP provided the rest of the shares had an above average yield, the non yielder would pull the average down but the portfolio would still yield above say the FTSE100. That's not the way I do it, I would be reluctant to add any share to my HYP unless it was above the say FTSE average, I do have a minimum yield threshold.

As far as I'm concerned there is no dividend yield requirement for individual holdings. As long as the portfolio can be considered High Yield (which I would say is anything over market yield).

StepOne

That's exactly the way that I view it but then I'm not one of these sophisticated (or wealthy) people who have a number of different portfolios and I'm not a HYP purist. I hold some Reckitt Benckiser which definitely isn't HY but since my holding has more than doubled in value in the 6 years I have held them, I'm not about to sell to increase my income. It is my intention to move to ITs when I am too old to manage my portfolio and at that point capital will matter.

RC

To come the 2nd point I can see why reformedcharacter would pref a HYP now, it's engaging and I understand that moving into an IT has merit for the later or even postmortem investing stage. I can't completely agree with it, as I see that as treating the HYP as a capital with income strategy and moving into and IT Income strategy later and I think that confuses the HYP purpose. Perhaps my views will alter if I look at the HYP as an inheritance or I think I might become incapable.

[Dod1010]

Doesn't apply in your case (shares held in an ISA), but I bought Unilever in the mid-90s and have a paper certificate. Would have been a bit painful to have had a forced sell due to a takeover, as I would probably need to work out the cost from historical share price records, to do the CGT calculation. I vaguely recall there was some kind of complex share consolidation to align things better between Unilever plc and Unilever NV at some point, which might need a bit of work too.

I too have a paper certificate which is from 12 January 2000, the day my first wife died. I had it transferred to me in specie. If of interest, the share consolidation took place on 22 May 2006 on the basis of 9 new shares for every 20 old shares and restating my holding at 12 January 2000, the price per share on that date was I think £10.70. That looks like an XIRR of around 7.2% for the capital only. Clearly dividends will boost that. They seem to have increased by about four times in sterling terms on that period. I have better shares, but I have also held a lot worse.

Dod

[Raptor]

Originally the 2 topics were on slightly different tracks but now are following the same. Will lock the one on shares and direct to here.

Raptor.

[Mapfumo]

I too have a paper certificate which is from 12 January 2000, the day my first wife died. I had it transferred to me in specie. If of interest, the share consolidation took place on 22 May 2006 on the basis of 9 new shares for every 20 old shares and restating my holding at 12 January 2000, the price per share on that date was I think £10.70. That looks like an XIRR of around 7.2% for the capital only. Clearly dividends will boost that. They seem to have increased by about four times in sterling terms on that period. I have better shares, but I have also held a lot worse.

Dod

There is a nice feature here, which gives the daily share price back to 1988.

https://www.unilever.com/investor-relat ... are-price/

The price in 2000 is lower than it was when I bought years earlier; presumably the hot money was still in dotcoms at that point. I'd guess total annual returns of about 9-10% (including dividends) for me, would be very happy to get that for the next 20 years, unless inflation arrives again.

[Dod1010]

The price in 2000 is lower than it was when I bought years earlier; presumably the hot money was still in dotcoms at that point. I'd guess total annual returns of about 9-10% (including dividends) for me, would be very happy to get that for the next 20 years, unless inflation arrives again.

Thanks for that. My records are pretty well correct then. I do not know when we would have first bought Unilever but probably about the beginning of the 1990s. I no longer have the record since if I sell the base cost is the price at the date I fell heir to it.

In 2000, Cable & Wireless was around £30 and Marconi was just about its peak so I expect you are correct that Unilever would have looked old hat and boring, and price accordingly. A lot to be said for that in investing though.

Dod