The Lemon Fool

Any comment on Tate & Lyle as an inclusion in a HYP portfolio?
Market Cap 3.2B
Yield (2018 > 2014) 4.1%, 4.7%, 4.8%, 3.7%, 5.3%
Divs (2018 > 2014), 27.6p, 28p, 28p, 28p, 28p,
Div cover 2018, 1.77

EssDeeAitch wrote:Any comment on Tate & Lyle as an inclusion in a HYP portfolio?
Market Cap 3.2B
Yield (2018 > 2014) 4.1%, 4.7%, 4.8%, 3.7%, 5.3%
Divs (2018 > 2014), 27.6p, 28p, 28p, 28p, 28p,
Div cover 2018, 1.77

I hold TATE having recently brought them on board as a replacement in the sector for Unilever which I sold. Glad to have them on board, and there they'll stay.

Ian.

I also hold TATE and am happy to do so.

I can only report on my own experience....

I bought in April 2007, and held continuously since then, topping up several times as my HYP grew. The total return measured by XIRR is currently 5.88% which is scarcely above the yield, implying the capital is moving slowly upwards but hopefully not being eaen away. XIRR varies, of course, acccording to several factors and has been up above 8% but down to 3%.

On the income side, increases have been quite unimpressive - I believe it's under 10% increase in five years. Not up with inflation.

Tate is a mediocre performer at best: it would be "dull but worthy" if only the dividends had kept up with RPI. As it is, it only just earns the right to stay in my HYP but on the other hand, it hasn't blown up and failed completely.


Arb.

Arborbridge wrote:


Tate is a mediocre performer at best: it would be "dull but worthy" if only the dividends had kept up with RPI. As it is, it only just earns the right to stay in my HYP but on the other hand, it hasn't blown up and failed completely.


Arb.

I'd rather a dull and boring plodder, that continues paying out, than a potentially more fickle ride myself. But then who can tell the future of any share?

Ian.

idpickering wrote:

Arborbridge wrote:


Tate is a mediocre performer at best: it would be "dull but worthy" if only the dividends had kept up with RPI. As it is, it only just earns the right to stay in my HYP but on the other hand, it hasn't blown up and failed completely.


Arb.

I'd rather a dull and boring plodder, that continues paying out, than a potentially more fickle ride myself. But then who can tell the future of any share?

Ian.

I agree with you - that's my feeling too and why it is still in my HYP.
However, TATE has to be very much on the lower end of HYP successes compare with the likes of LGEN, BATS or - add in your own favourites! If the dividends had kept up with inflation, I would be more generous, but as it is, I can't be.

Arb.

I was going to write something dismissive of Tate - I've held for just over 10 years - along the lines of "I wouldn't even go as far as 'mediocre'". In fact I chose not to top it up the other day in favour of a new share, ITV.

But I realize my view is biased because it was bought as a half-holding and the other one is Greggs, which has had stonking performance.
So then I look at Tate's annualized return, and it's 5.9%. Doesn't sound that great, does it? Especially when compared to Gregg's 15%.

But when I rank my portfolio on the annualized returns, then it ranks with United Utilities, and beats Aviva, SSE, National Grid, Standard Life (aberdeen), and BHP Billiton.
All of which I would happily top-up.

I'll see what happens when my next top-up time comes around in a few months

torata

I've also held Tate since 2007 and have considered it's performance as mediocre.
However looking at the annualised return I see that it's 9.15% using last Friday's closing price, whereas the portfolio as a whole has produced 5.8% over a similar period so it's done better than a lot of the shares I've held.

I hold TATE outside my ISA and within. I've made slightly better performance with those shares inside the ISA and I have held those sheltered for longer. I remember a few years back they stated that the dividend would be held for period and since then they have been excluded from extra money from me. I see they have made a small increase last year but the 5 and 10 year rate of dividend increase is enough to make me look elsewhere for a rising dividend prospect.

kempiejon wrote:I hold TATE outside my ISA and within. I've made slightly better performance with those shares inside the ISA and I have held those sheltered for longer. I remember a few years back they stated that the dividend would be held for period and since then they have been excluded from extra money from me. I see they have made a small increase last year but the 5 and 10 year rate of dividend increase is enough to make me look elsewhere for a rising dividend prospect.

I understand your point, but can you say where you are looking? I don't see anything in the food producers sector that fits with a HYP portfolio and I am keen to get as diverse as possible. Ideally I would like two holdings per sector so I have a choice of either or both.

Me and Mel bought them a few months back. Mainly for the dividend and some diversity. I looked at their KPIs, i.e. their balance sheets and IIRC they looked reasonably healthy. We worried about things like "sugar tax", but noticed that they have diversified into non-sugar sweeteners (Splenda etc.) so we figured they were worth getting. They've risen in share price slightly since.

pendas wrote:I've also held Tate since 2007 and have considered it's performance as mediocre.
However looking at the annualised return I see that it's 9.15% using last Friday's closing price, whereas the portfolio as a whole has produced 5.8% over a similar period so it's done better than a lot of the shares I've held.

What's interesting here is that XIRR's can be notoriously variable depending on buying and topping up points of each investor. You and I bought in the same year, yet my XIRR is 5.88% and your significantly more at 9.15%.
The resulting difference means that my capital has probably lost ground, whereas yours has gained slightly.

So when I see the old adage "it's not timing the market, but time in the market", I remember that like many things it is only partly true at best, and one has to state the conditions by which it is being tested.

Arb.

I bought on 25 Sep, last week, at £6.554. As things stand the SP is £6.86 so a margin of safety is established. Presumably TATE has, as with me, appeared on our collective filters due yield. At 4%+ and being a steady plodder seems sound enough to me. In the FTSE250 one of my LTBHs Inchcape has hit the 4%+ zone which makes it worth a look IMHO.

EssDeeAitch wrote:

kempiejon wrote:I hold TATE outside my ISA and within. I've made slightly better performance with those shares inside the ISA and I have held those sheltered for longer. I remember a few years back they stated that the dividend would be held for period and since then they have been excluded from extra money from me. I see they have made a small increase last year but the 5 and 10 year rate of dividend increase is enough to make me look elsewhere for a rising dividend prospect.

I understand your point, but can you say where you are looking? I don't see anything in the food producers sector that fits with a HYP portfolio and I am keen to get as diverse as possible. Ideally I would like two holdings per sector so I have a choice of either or both.

EssDeeAitch I'm not necessarily looking in the food producers sector as I already have TATE but more importantly I don't have to put more money into that sector as I have a fairly mature HYP. New money just needs to be suitable at a portfolio level.
I am not for selling my TATE shares and each month new savings and any collected dividends go where I think it fits best. High yield, satisfactory personal safety factors and maintaining diversification across the portfolio.

idpickering wrote:

EssDeeAitch wrote:Any comment on Tate & Lyle as an inclusion in a HYP portfolio?
Market Cap 3.2B
Yield (2018 > 2014) 4.1%, 4.7%, 4.8%, 3.7%, 5.3%
Divs (2018 > 2014), 27.6p, 28p, 28p, 28p, 28p,
Div cover 2018, 1.77

I hold TATE having recently brought them on board as a replacement in the sector for Unilever which I sold. Glad to have them on board, and there they'll stay."

Till you sell them, that is. How long did you hold Unilever? I presume you are expecting their s.p. to drop if they go Dutch. However, it is by no means a certainty that they will win the day in that regard though you do have a bit of a record of jumping ship before the rest of us, despite your avowed principles and avoiding our losses. Good luck to you. It will be interesting to see what happens. If I had realised that my vote wouldn't count after all, I might have done the same.

Arborbridge wrote:What's interesting here is that XIRR's can be notoriously variable depending on buying and topping up points of each investor

I also bought in April 2007, but haven't topped up since the original purchase. My XIRR is 5.3%, so you are comfortably ahead of me on that one!

The dividend CAGR is an unimpressive 2.5%, 1.9% and 2.5% over 1, 5 and 10 years, so nothing to feel good about there either.

Tate had a period where they were complaining about the cost of sugar imports (EU rules on sources or something) and eventually sold that part of the business. Their commitment to "Splenda" has, so far, not seen the great take-up they were looking for, but they plod on. I hope that they do get it right and get a full rerating and earnings to match, but I suspect any hint of success will be followed by a low ball takeover bid. a bitter-sweet event rather than just sweet.

Anyhow, such musings on the future are worth less than they cost. I continue to hold, preferring to remain in the pan than jump into the fire...

VRD

EssDeeAitch wrote:I don't see anything in the food producers sector that fits with a HYP portfolio and I am keen to get as diverse as possible. Ideally I would like two holdings per sector so I have a choice of either or both.

An HYP does not require a holding from each and every Business Sector and nor does it require holdings from any particular Business Sector. Business Sectors go in and out of fashion and the selections for an HYP now can vary significantly from one started only a few years ago. For example, not long ago you hardly ever saw an HYP without a Retail – Tescos (TSCO) was a particular favourite and so was Sainsbury’s PLC (SBRY) as well as Marks & Spencer (MKS) – but now ……?

When starting out, my advice is to find the Highest Yield that you consider sustainable and matches any other criteria you may have for Market Capitalisation etc and there is your first selection. Subsequent selections should be the next highest sustainable yield you can find, but now also restricted to a different Business Sector from those already selected.

Once an HYP is sufficiently diversified, new purchases, whether topping-up current holdings or new selections, should once again be of the highest sustainable yield. But now it may be necessary to pass on a number of holdings or sectors where further purchases would create an overly large exposure to one holding or Business Sector


With regard to Tate & Lyle (TATE) I obtained a holding almost exactly 3 years ago since when it has performed "alright", producing a rising income stream, albeit only rising slowly and not every year, which of course is the main aim of an HYP. The capital value has been on a walkabout and is now 15.00% ahead but this is HYP where income is the primary aim.

TATE looks solid enough to me and, assuming it continues on its merry income-increasing way, I doubt I will ever sell my holding. Right now however, I would not add to that holding as there are higher yields available that are in my opinion perfectly acceptable.

So, your HYP might not get TATE but so what? As long as you end up with a diversified portfolio with a growing income, will you miss it?



Ian

Bouleversee wrote:

idpickering wrote:

EssDeeAitch wrote:Any comment on Tate & Lyle as an inclusion in a HYP portfolio?
Market Cap 3.2B
Yield (2018 > 2014) 4.1%, 4.7%, 4.8%, 3.7%, 5.3%
Divs (2018 > 2014), 27.6p, 28p, 28p, 28p, 28p,
Div cover 2018, 1.77

I hold TATE having recently brought them on board as a replacement in the sector for Unilever which I sold. Glad to have them on board, and there they'll stay."

Till you sell them, that is. How long did you hold Unilever? I presume you are expecting their s.p. to drop if they go Dutch. However, it is by no means a certainty that they will win the day in that regard though you do have a bit of a record of jumping ship before the rest of us, despite your avowed principles and avoiding our losses. Good luck to you. It will be interesting to see what happens. If I had realised that my vote wouldn't count after all, I might have done the same.

Hi Bouleversee, I held Unilever since early 2013. Yes I do think the sp will drop, and don't think the story is finished. As for jumping ship, it's not something I do lightly, and as a supposed HYPer, I find any meddling with my HYP uncomfortable. I've got it right sometimes, but not always . The certain winner IMHO is the broker. We're only human, and carry out whatever action seems right at the time. I shall be watching how the Unilever tale unfolds.

Ian.

IanTHughes wrote:

EssDeeAitch wrote:I don't see anything in the food producers sector that fits with a HYP portfolio and I am keen to get as diverse as possible. Ideally I would like two holdings per sector so I have a choice of either or both.

An HYP does not require a holding from each and every Business Sector and nor does it require holdings from any particular Business Sector. Business Sectors go in and out of fashion and the selections for an HYP now can vary significantly from one started only a few years ago. For example, not long ago you hardly ever saw an HYP without a Retail – Tescos (TSCO) was a particular favourite and so was Sainsbury’s PLC (SBRY) as well as Marks & Spencer (MKS) – but now ……?

When starting out, my advice is to find the Highest Yield that you consider sustainable and matches any other criteria you may have for Market Capitalisation etc and there is your first selection. Subsequent selections should be the next highest sustainable yield you can find, but now also restricted to a different Business Sector from those already selected.

Once an HYP is sufficiently diversified, new purchases, whether topping-up current holdings or new selections, should once again be of the highest sustainable yield. But now it may be necessary to pass on a number of holdings or sectors where further purchases would create an overly large exposure to one holding or Business Sector


With regard to Tate & Lyle (TATE) I obtained a holding almost exactly 3 years ago since when it has performed "alright", producing a rising income stream, albeit only rising slowly and not every year, which of course is the main aim of an HYP. The capital value has been on a walkabout and is now 15.00% ahead but this is HYP where income is the primary aim.

TATE looks solid enough to me and, assuming it continues on its merry income-increasing way, I doubt I will ever sell my holding. Right now however, I would not add to that holding as there are higher yields available that are in my opinion perfectly acceptable.

So, your HYP might not get TATE but so what? As long as you end up with a diversified portfolio with a growing income, will you miss it?
Ian

Thanks Ian, I understand what you are saying and it makes sense to me. I have selected 21 stocks within 14 unique sectors and am happy with the yield on each of them (the "sort by yield" is a fundamental aspect of this exercise I think) and then of course looked at other aspects consistent with HYP portfolio's.

It has been very helpful to get the feedback that I have.

I'm not sure why you'd want this at 4 percent. It's got a better future than Royal Mail, Centrica etc but Is be seriously tempted to just buy City of London than fishing here. If it was trading at 5.5 percent which Id assess more like fair value I'd be interested.