CryptoPlankton wrote:You said earlier that your HYP has a dividend growth rate well in excess of 2%, can you give it a figure? Is the underlying dividend growth rate (excluding new money and dividend reinvestment - which will presumably cease when in drawdown) comfortably above inflation? If so, this won't be with any great thanks to several of the large cap "usual suspects" to be found in many HYPS.
Yes, I can give a figure but I cannot strip out the new money or dividend re-investment. Well, I suppose I could but even a spreadsheet geek like me has to have a life
. Also the following are based on the Forecast Income for my portfolio at the time of measurement.
19 Oct 2012 – 53.00p per Dividend Unit
19 Oct 2018 – 77.37p per Dividend Unit
I calculate that to be an annual increase of around 6.50%.
But I do accept that when building an HYP the “new” money always goes into the highest yield at the time of purchase (unless you purchase ULVR
) which will of course push the figure up
CryptoPlankton wrote:All the following companies have 5 year compound annual dividend growth rates failing to keep up with current CPI (2.4% in September): HSBA, BP., RDSB, GSK, AZN, NG., BA., SSE and CNA - and those failing to do so over 10 years include BT., AV., BLND and UU.
If you want to measure historical dividend growth rates over 5 or 10 years then you should use an inflation figure over the same time periods. The current inflation rate is only relevant to any increase over the last 12 months. But sure, over 5 or 10 years there has been no increase from a number of big dividend payers, assuming you strip out the benefits the falling value of GBP. Of course those time periods do include the effects of what was possibly the single biggest financial crisis on record. And yes, I do know that ULVR sailed through with an increasing dividend but then so did some of the higher-yielders in my portfolio. Not all of course, but then that is why I diversify.
CryptoPlankton wrote: I understand you are a strict adherent to HYP "rules" and don't accept that they have any place in a portfolio, even at previously higher yields that others agree were acceptable.
Then you misunderstand me. I have “tinkered” away a couple of low yielders and my HYP includes some shares from the lower echelons of the FT250. But one thing I am adamant about is that every selection MUST
be the highest sustainable yield that I can find at the time of purchase. If that is your definition of a strict adherent to HYP "rules"
, guilty as charged.
Anyway, that is all I have to say on the subject and my apologies for straying from the subject of the thread. In my defence, I was simply responding to comments such as "low yield is acceptable if historical dividend growth is high" which I disagree with and "every HYP should include ULVR" which in my opinion is complete nonsense