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Tate & Lyle

Practical discussions about equity High-Yield Portfolios (HYP) for income
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Tight HYP discussions only please - OT please discuss in strategies
monabri
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Re: Tate & Lyle

#170907

Postby monabri » October 2nd, 2018, 7:54 pm

Walrus wrote: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.


Ssshhh! - I thought exactly the same thing. The risk-reward ratio just doesn't stack up. Not only does CTY have a slightly higher yield it also has a better 5 year dividend growth rate.

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Re: Tate & Lyle

#170922

Postby kempiejon » October 2nd, 2018, 9:13 pm

I think first picks for the HYP are best from FTSE100, Tate fell out a little while back, it barely yields more than tha index and as has been discussed now with perfect hindsight we can see the growth has been below infaltion. Holders, well me, will probably continue to hang on but there are probably better picks.
CTY referenced OT in a previous post I don'th think beats the FTSE100 index over 5 years and the income is only a few fractions of a percent better.

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Re: Tate & Lyle

#170966

Postby idpickering » October 3rd, 2018, 6:08 am

kempiejon wrote:I think first picks for the HYP are best from FTSE100, Tate fell out a little while back, it barely yields more than tha index and as has been discussed now with perfect hindsight we can see the growth has been below infaltion. Holders, well me, will probably continue to hang on but there are probably better picks.
CTY referenced OT in a previous post I don'th think beats the FTSE100 index over 5 years and the income is only a few fractions of a percent better.


I do tend to agree on your FTSE100 comment tbh. I now have 33 holdings, two of which, TATE and GNK from the 250, and MARS from small cap. I'm in no rush to buy any more minnows.

Ian.

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Re: Tate & Lyle

#170974

Postby Arborbridge » October 3rd, 2018, 7:11 am

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


Congratulations on a clear and sensible post remaining true to the core ideas of HYP. Sometimes on the board, we wandering round in circles as the view becomes clouded with detail, but you've managed to show us how to stay on track.
Arb.

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Re: Tate & Lyle

#170975

Postby Arborbridge » October 3rd, 2018, 7:17 am

Walrus wrote: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.


OT, perhaps, but I think it's a serious point I also bear in mind when looking at my HYP. If I cannot maintain my HYP at well above CTY, why would I bother? When buying a new share or topping up, the yield of CTY is in the back of my mind asking this question - and most usually I will not buy a share unless the yield is greater than 90% of my HYP average.

Arb.

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Re: Tate & Lyle

#170981

Postby EssDeeAitch » October 3rd, 2018, 7:46 am

Walrus wrote: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.


Perhaps some context from me might be helpful. And I appreciate your comment as it has made me reappraise my pick before I press the buy button.

I am trying to construct a HYP portfolio using what seems to me to be the common wisdom of selecting between 20 and 30 companies with a yield above the FTSE 100 yield, stability of dividend payout and growth, adequate dividend cover, sector diversification and of course, anecdotal evidence of company stability and prospects. Please feel free to let me know if I have missed anything here.

So far, I have selected 22 companies in 14 different sectors, with yields of between 4.2% and 8.4%. No sector has more than two companies. Tate were selected as they meet the screening criteria (but dont dazzle, I agree) and are the only company in the Food Producers sector to do so.

As HSBC, BP, Royal Dutch Shell & British American Tobacco are in my HYP portfolio, selecting CTY instead of Tate would just duplicate this as they are all in CTY top 10 holdings. And to what end? The same yield (more or less) as Tate with less diversification and making it a lone IT in a HYP portfolio of stocks?

Perhaps that will help explain better why I have put Tate in and not considered CTY at the same yield but with annual charges.

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Re: Tate & Lyle

#170982

Postby moorfield » October 3rd, 2018, 7:48 am

Arborbridge wrote:
Walrus wrote: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.


OT, perhaps, but I think it's a serious point I also bear in mind when looking at my HYP. If I cannot maintain my HYP at well above CTY, why would I bother? When buying a new share or topping up, the yield of CTY is in the back of my mind asking this question - and most usually I will not buy a share unless the yield is greater than 90% of my HYP average.

Arb.


For me the relevance of CTY here is as a good proxy for the minimum performance I should expect from new HYP shares (and indeed portfolio overall), ie. yield practically the same as FTSE100 and dividends keeping pace with inflation.

To ask Arb's question differently - If you can't beat CTY's yield, currently 4.3%, then why not buy it instead? (that would be OT here!)

Moderator Message:
Indeed it would. OK as a yardstick, though.

TJH

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Re: Tate & Lyle

#170984

Postby EssDeeAitch » October 3rd, 2018, 7:54 am

Arborbridge wrote:
Walrus wrote: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.


OT, perhaps, but I think it's a serious point I also bear in mind when looking at my HYP. If I cannot maintain my HYP at well above CTY, why would I bother? When buying a new share or topping up, the yield of CTY is in the back of my mind asking this question - and most usually I will not buy a share unless the yield is greater than 90% of my HYP average.

Arb.


That's a really interesting point on top-ups yield requirement. I have another week I expect before actually buying (waiting on monies) and it is very likely that I will revisit my selection and Tate may be a casualty and I would really welcome any suggestions or comment on my previous reply

EDIT
How far down the FTSE rankings will you go to seek out high yields? What minimum Market Cap do you set?

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Re: Tate & Lyle

#170993

Postby Walrus » October 3rd, 2018, 8:41 am

EssDeeAitch wrote:
Arborbridge wrote:
Walrus wrote: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.


OT, perhaps, but I think it's a serious point I also bear in mind when looking at my HYP. If I cannot maintain my HYP at well above CTY, why would I bother? When buying a new share or topping up, the yield of CTY is in the back of my mind asking this question - and most usually I will not buy a share unless the yield is greater than 90% of my HYP average.

Arb.


That's a really interesting point on top-ups yield requirement. I have another week I expect before actually buying (waiting on monies) and it is very likely that I will revisit my selection and Tate may be a casualty and I would really welcome any suggestions or comment on my previous reply

EDIT
How far down the FTSE rankings will you go to seek out high yields? What minimum Market Cap do you set?


My personal view on your previous post is it is diversification for diversification sake. If your HYP is 20 shares or so you don't need additional shares for further diversification, that actually dilute your overall yield but don't really have any portfolio diversification effect.

Taking it to the extreme you could buy every ftse 100 share and just have the index which is clearly not the aim.

I built my HYP slightly differently than prescribed. I started with city as a benchmark and as opportunities arise I divest out of it into the HYP shares if they fit with my criteria. For me the yield here is too low for HYP.

With regards below ftse 100 personally if I was planning on being a proper Doris I'd stick to ftse 100, helps you to sleep at night.......

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Re: Tate & Lyle

#171002

Postby vrdiver » October 3rd, 2018, 9:37 am

EssDeeAitch wrote:I have another week I expect before actually buying (waiting on monies) and it is very likely that I will revisit my selection and Tate may be a casualty and I would really welcome any suggestions or comment on my previous reply

EDIT
How far down the FTSE rankings will you go to seek out high yields? What minimum Market Cap do you set?

If I read between the lines, you are buying a full HYP portfolio in one go with a lump sum?

If that is the case, it explains why you are looking further down the lists. Your (all our) problem with this approach is that the criteria that you filter with get weaker and weaker as your need to get more candidates in one hit increases. In the original HYP, the 15 shares were considered enough, with several discussions about how adding a 16th share didn't reduce portfolio risk nearly as much as you'd think. Most of us feel more comfortable with a higher number of holdings, but not all bought at once. I'm afraid I don't have the links for these discussions, even if they're still accessible, what with the UK Motley Fool discussion boards having been taken down.

Most of the people on here who talk about larger portfolios will have built up their holdings over time. Hence the inclusion in some of them of TATE (mine included) as at one time it was a reasonable candidate. Over time, with the vagaries of company fortunes swapping different shares in and out of the filter results as we go along, there will be more opportunities for diversification without compromising selection criteria. Note that it's likely to be years or decades using the latter approach; drip-feeding over a few months or a couple of years is unlikely to give you as much choice as you'd want to get to the 20-30 holdings level.

One option (not tested by me) if you have a lump sum and a target of, say, 25 shares, is to filter as normal (maybe discuss the filters over here?) and buy the shares that actually meet your filter criteria, each getting 1/25th of the lump sum. Assuming you don't get 25 suitable candidates, but only, say 10, invest the remaining lump sum into a passive tracker and run your filters every quarter or so to see if a new candidate has surfaced; if so, sell a piece of the tracker to swap into your HYP.

I'm going to claim the above suggestion is not off-topic (for HYP): it's a practical issue for the lump sum HYP investor. Delving into which tracker, ETF etc, might be wandering a bit too far from HYP, so that part of the discussion might be better over on strategies?

For a good discussion of building the portfolio and managing decisions about whether to select a new candidate or to top up an existing one, I recommend reading the GDHYP threads, as per Gengulphus's post to you in the other thread: viewtopic.php?f=15&t=13813&p=167905&hilit=GDHYP#p167905

Anyhow, further discussion on HYP selection is probably best directed back at your other thread (viewtopic.php?f=15&t=13813&hilit=GDHYP ) This post was only because there may be some differences in how TATE is viewed for selection depending on whether you are a lump sum or a drip-feeding portfolio builder.

VRD

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Re: Tate & Lyle

#171022

Postby EssDeeAitch » October 3rd, 2018, 10:29 am

vrdiver wrote:
EssDeeAitch wrote:I have another week I expect before actually buying (waiting on monies) and it is very likely that I will revisit my selection and Tate may be a casualty and I would really welcome any suggestions or comment on my previous reply

EDIT
How far down the FTSE rankings will you go to seek out high yields? What minimum Market Cap do you set?

If I read between the lines, you are buying a full HYP portfolio in one go with a lump sum?


This, along with a reply from Walrus above have been very helpful. I will have a lump sum to invest and was considering buying all at once (considering, not decided however) but I think that I need to think on. Walrus used (or uses) CTY as a holding fund and you suggest a tracker and both are viable options. Perhaps having a tracker/trust and then choosing the most attractive six, eight or ten HYP stocks and going with those would be best.

I have plenty of work to do, but that's fine. Again, many thanks

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Re: Tate & Lyle

#171027

Postby Arborbridge » October 3rd, 2018, 10:55 am

EssDeeAitch wrote:
vrdiver wrote:
EssDeeAitch wrote:I have another week I expect before actually buying (waiting on monies) and it is very likely that I will revisit my selection and Tate may be a casualty and I would really welcome any suggestions or comment on my previous reply

EDIT
How far down the FTSE rankings will you go to seek out high yields? What minimum Market Cap do you set?

If I read between the lines, you are buying a full HYP portfolio in one go with a lump sum?


This, along with a reply from Walrus above have been very helpful. I will have a lump sum to invest and was considering buying all at once (considering, not decided however) but I think that I need to think on. Walrus used (or uses) CTY as a holding fund and you suggest a tracker and both are viable options. Perhaps having a tracker/trust and then choosing the most attractive six, eight or ten HYP stocks and going with those would be best.

I have plenty of work to do, but that's fine. Again, many thanks


When I started, I chose to drip feed over quite a long period. This was partly because I felt the market still had further to fall (2006-7) but also as I was "finding my feet" using the HYP concept. There's something to be said for taking it slowly because one develops ideas in the process of doing so.

Arb.

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Re: Tate & Lyle

#171030

Postby miner1000 » October 3rd, 2018, 11:13 am

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.


Question. Is CTY a fund? and if so, is there a cost to holding it?

Moderator Message:
It's an investment trust, ticker CTY. And off-topic here, except as a comparator. -- MDW1954

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Re: Tate & Lyle

#171035

Postby kempiejon » October 3rd, 2018, 11:35 am

I don't think I would be able to find 20 shares for a one hit HYP and as has been mentioned you could only do this by relaxing some criteria, safety, size or yield. I think picking a dozen should be straight forward so perhaps that would be a good start and I like vrdiver's suggestion of parking some cash to add new picks periodically. I'd prefer a FTSE tracker to the oft cited CTY.
City's 4.5% yield from dividenddata currently just beats the FTSE100 at 4.1% and on a TR basis the index has beaten it over 3 years though CTY pulls ahead after 5 https://www.theaic.co.uk/companydata/335/performance and I added iShares 100 UK Equity Index (UK) A Acc for comparison

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Re: Tate & Lyle

#171060

Postby kempiejon » October 3rd, 2018, 12:29 pm

Hmm, I misquoted yield data there. Dividend data has CTY at 4.25% and FTSE100 at 4.11%.

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Re: Tate & Lyle

#171116

Postby Arborbridge » October 3rd, 2018, 3:14 pm

kempiejon wrote:Hmm, I misquoted yield data there. Dividend data has CTY at 4.25% and FTSE100 at 4.11%.


Depends how it's calculated. Some sites say 4.19% (I think) based on the past year's dividends but if you include the one just declared there's a different answer.

However, in practice there's a high probability of receiving at least 4.55px4 in dividends for the next year, giving 18.2p. That's a yield of 4.28% at today's price, and that does not include any possible increase in dividend for next year.

It'll be a while before my Tesco shares reach such heights :(
Arb.

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Re: Tate & Lyle

#171275

Postby Wizard » October 4th, 2018, 12:20 am

idpickering wrote: to agree on your FTSE100 comment tbh. I now have 33 holdings, two of which, TATE and GNK from the 250, and MARS from small cap. I'm in no rush to buy any more minnows.

Ian.

Interested in what it is about those three that mean you are willing to buy them at lower market caps Ian. Particularly TATE and GNK, both of which I tnink you have bought / added to in the last week IIRC. Your thoughts would be much appreciated.

Terry.

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Re: Tate & Lyle

#171287

Postby idpickering » October 4th, 2018, 6:09 am

Wizard wrote:
idpickering wrote: to agree on your FTSE100 comment tbh. I now have 33 holdings, two of which, TATE and GNK from the 250, and MARS from small cap. I'm in no rush to buy any more minnows.

Ian.

Interested in what it is about those three that mean you are willing to buy them at lower market caps Ian. Particularly TATE and GNK, both of which I tnink you have bought / added to in the last week IIRC. Your thoughts would be much appreciated.

Terry.


Hi Terry, regarding TATE, I wanted a replacement for Unilever and Tate & Lyle fitted the bill nicely. As for Greene King, I was impressed by the chat here in the recent thread on them, and a comment from Raptor particularly struck home, in that he said he held them alongside Marsden's. I like to hold two in a sector if possible, so decided to double up there too. As for Marsden's, I like their story, and they offer a great yield. I should add that I've done enough meddling with my HYP for now, and will strive to be more hands-off going forward.

Ian.

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Re: Tate & Lyle

#171309

Postby tjh290633 » October 4th, 2018, 8:23 am

Ian, MARS is Marston's

TJH

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Re: Tate & Lyle

#171312

Postby idpickering » October 4th, 2018, 8:34 am

tjh290633 wrote:Ian, MARS is Marston's

TJH


Sorry Terry, and the gang. I really should turn the light on when I type. And the one in my head too!

Ian.


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