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BHP completes sale of Onshore US assets

Practical discussions about equity High-Yield Portfolios (HYP) for income
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pyad
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Re: BHP completes sale of Onshore US assets

#187977

Postby pyad » December 19th, 2018, 10:57 am

The US 102¢ special is worth about 80p at the current FX rate making a return at 1,652p of 4.8% and the normal dividend forecast for their year to 30 June 19 is 174¢, worth about 137p at present.

Thus the normal forecast running yield is a high 8.3% for 19. Add in the special and we're looking at a very high total forecast 13.1% yield for 19 of which the special bit is already fixed in USD. FX movements will alter these figures, as will the actual div if it varies from the forecast. But these returns look pretty good as things stand.

Mining divs are probably more risky than some other shares due to being exposed to commodity prices which are generally outside their control but BHP looks attractive from the HYP viewpoint.

What happens after 19? I dunno, SI takes over.

For what it's worth my source is predicting a big div drop to 124¢ for 20. That would still leave BHP on a 5.9% yield at current FX rates but in my view that's too far away, especially in this particular industry, for such forecasts to be reliable at all.

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Re: BHP completes sale of Onshore US assets

#188035

Postby funduffer » December 19th, 2018, 2:55 pm

pyad wrote:The US 102¢ special is worth about 80p at the current FX rate making a return at 1,652p of 4.8% and the normal dividend forecast for their year to 30 June 19 is 174¢, worth about 137p at present.

Thus the normal forecast running yield is a high 8.3% for 19. Add in the special and we're looking at a very high total forecast 13.1% yield for 19 of which the special bit is already fixed in USD. FX movements will alter these figures, as will the actual div if it varies from the forecast. But these returns look pretty good as things stand.

Mining divs are probably more risky than some other shares due to being exposed to commodity prices which are generally outside their control but BHP looks attractive from the HYP viewpoint.

What happens after 19? I dunno, SI takes over.

For what it's worth my source is predicting a big div drop to 124¢ for 20. That would still leave BHP on a 5.9% yield at current FX rates but in my view that's too far away, especially in this particular industry, for such forecasts to be reliable at all.


Yes, BHP has been a roller coaster, with a large dividend cut in 2016, followed by an amazing bounce back culminating in this special in January 2019. Obviously a cyclic sector like this can lead to volatile dividends but I have held throughout and happy to accept dividend volatility in this sector.

If your source is correct then 124c will just take us back to 2015 dividend, before the big 2016 cut.....and we have the benefit of South32 spin-off as well for those of us, like me, that don't tinker about.

FD

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Re: BHP completes sale of Onshore US assets

#188064

Postby pyad » December 19th, 2018, 4:24 pm

funduffer wrote:...and we have the benefit of South32 spin-off as well for those of us, like me, that don't tinker about.

FD


Indeed. S32 with its rising divs so far is a fine example of Market Trading at work in the HYP strategy. Demergers are usually beneficial for HYPers, those who don't tinker as you say.

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Re: BHP completes sale of Onshore US assets

#188077

Postby Arborbridge » December 19th, 2018, 4:37 pm

pyad wrote:
funduffer wrote:...and we have the benefit of South32 spin-off as well for those of us, like me, that don't tinker about.

FD


Indeed. S32 with its rising divs so far is a fine example of Market Trading at work in the HYP strategy. Demergers are usually beneficial for HYPers, those who don't tinker as you say.


Yes, it's been a good example, but from my point of view, I can't be a**** with small holdings and small payouts so I got rid of S32 to tidy up. No regrets for that departure from pure HYP.

Arb.

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Re: BHP completes sale of Onshore US assets

#188080

Postby pyad » December 19th, 2018, 4:47 pm

Arborbridge wrote:
Yes, it's been a good example, but from my point of view, I can't be a**** with small holdings and small payouts so I got rid of S32 to tidy up. No regrets for that departure from pure HYP.

Arb.

I'd agree with you, in that special situation.

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Re: BHP completes sale of Onshore US assets

#188089

Postby tjh290633 » December 19th, 2018, 5:00 pm

Arborbridge wrote:
pyad wrote:
funduffer wrote:...and we have the benefit of South32 spin-off as well for those of us, like me, that don't tinker about.

FD


Indeed. S32 with its rising divs so far is a fine example of Market Trading at work in the HYP strategy. Demergers are usually beneficial for HYPers, those who don't tinker as you say.


Yes, it's been a good example, but from my point of view, I can't be a**** with small holdings and small payouts so I got rid of S32 to tidy up. No regrets for that departure from pure HYP.

Arb.

My approach was to add to S32 at 102p to make it a sensible sized holding. Topped it up later at 188p, when it was top of my top-up rankings.

IRR now 41% since May 2015 demerger.

The other example at about the same time was Indivior. Demerged in 2014 at 120p, I added to it 6 months later at 233p. It paid two dividends and then stopped, but carried on rising. After the first setback I sold out at 372p, fortunately, in June. The yield when demerged was about 7.8%, so worth having for that short period when it paid dividends.

My IRR was 21%, but had I just held the original shares and sold out at the same time, it would have been 44%. Now back near the demerger price.

I think that the key to these events is how much the future dividends are likely to be. When Six Continents split into Mitchells and Butlers and Intercontinental Hotels, the yields were similar, but they soon diverged, both paying special dividends and consolidating shares. IHG carried on doing that, while MAB just did it once. Then MAB fell on hard times and IHG continued to prosper, but I sold both because of low yield after share price increases. IRR on both up to the time I sold was about 35%.

TJH

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Re: BHP completes sale of Onshore US assets

#188098

Postby Arborbridge » December 19th, 2018, 5:16 pm

tjh290633 wrote:
Arborbridge wrote:
pyad wrote:
Indeed. S32 with its rising divs so far is a fine example of Market Trading at work in the HYP strategy. Demergers are usually beneficial for HYPers, those who don't tinker as you say.


Yes, it's been a good example, but from my point of view, I can't be a**** with small holdings and small payouts so I got rid of S32 to tidy up. No regrets for that departure from pure HYP.

Arb.

My approach was to add to S32 at 102p to make it a sensible sized holding. Topped it up later at 188p, when it was top of my top-up rankings.

IRR now 41% since May 2015 demerger.


TJH


You did well, but at that time, I didn't particularly want another holding - I was over 40 shares, I believe. And topping up and maintaining a new holding without a history of dividends didn't appeal.

Arb.

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Re: BHP completes sale of Onshore US assets

#192351

Postby monabri » January 10th, 2019, 11:37 am

Just a note/reminder that BHP went XD on a special dividend today of $1.02.

https://www.londonstockexchange.com/exc ... 05227.html

"In addition, the Board of BHP has determined to pay a special dividend (Special Dividend) of US$1.02 per share, which will be paid to all BHP shareholders with an entitled registered holding as of Friday 11 January 2019."


Payment on 30th Jan 2019.

(Dividend impact ~ 4.7% on share price)


I missed the announcement of 17th Dec 2018 ..see link above !

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Re: BHP completes sale of Onshore US assets

#192355

Postby Arborbridge » January 10th, 2019, 11:45 am

monabri wrote:Just a note/reminder that BHP went XD on a special dividend today of $1.02.

https://www.londonstockexchange.com/exc ... 05227.html

"In addition, the Board of BHP has determined to pay a special dividend (Special Dividend) of US$1.02 per share, which will be paid to all BHP shareholders with an entitled registered holding as of Friday 11 January 2019."


Payment on 30th Jan 2019.

(Dividend impact ~ 4.7% on share price)


I missed the announcement of 17th Dec 2018 ..see link above !


Does anyone know a website on which these and other dollar divis are expressed in sterling? The usual ones always quote USD.

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Re: BHP completes sale of Onshore US assets

#192357

Postby lansdown » January 10th, 2019, 11:58 am

I had a note on my spreadsheet that said the £ to $ exchange rate would be determined tomorrow. Cant guarantee that correct as I cant recall where I got that from.
Lansdown

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Re: BHP completes sale of Onshore US assets

#192358

Postby PinkDalek » January 10th, 2019, 11:58 am

Arborbridge wrote:Does anyone know a website on which these and other dollar divis are expressed in sterling?


For BHP, according to monabri earlier in this thread:

Special Dividend record date (including currency conversion and currency election dates for ASX and London Stock Exchange), 11 January 2019
from https://www.londonstockexchange.com/exc ... 05227.html

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Re: BHP completes sale of Onshore US assets

#192363

Postby monabri » January 10th, 2019, 12:03 pm

I don't think you will find such a website as the Sterling amount (currency conversion) will be determined at some point in the (near) future ..date to be announced tomorrow.

from the link, previous.

"Special Dividend record date (including currency conversion and currency election dates for Australian Securities Exchange and London Stock Exchange) 11 January 2019"

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Re: BHP completes sale of Onshore US assets

#192374

Postby monabri » January 10th, 2019, 12:48 pm

lansdown wrote:I had a note on my spreadsheet that said the £ to $ exchange rate would be determined tomorrow. Cant guarantee that correct as I cant recall where I got that from.
Lansdown


I think it is a case of on the 11th Jan they will advise of a date rather than announcing the exchange rate conversion tomorrow (maybe one week before the payment as a guess).

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Re: BHP completes sale of Onshore US assets

#192380

Postby Arborbridge » January 10th, 2019, 1:33 pm

monabri wrote:I don't think you will find such a website as the Sterling amount (currency conversion) will be determined at some point in the (near) future ..date to be announced tomorrow.

from the link, previous.

"Special Dividend record date (including currency conversion and currency election dates for Australian Securities Exchange and London Stock Exchange) 11 January 2019"


I believe we used to have a site that listed dividends in sterling as and when they were known - I think it was dividendinvestor.co.uk, but I don't think it exists now in the "UK" version.

Arb.

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Re: BHP completes sale of Onshore US assets

#192385

Postby PinkDalek » January 10th, 2019, 1:38 pm

monabri wrote:I think it is a case of on the 11th Jan they will advise of a date rather than announcing the exchange rate conversion tomorrow (maybe one week before the payment as a guess).


That's an interesting interpretation which could well be correct.

I (mis?)read it to say that tomorrow the conversion rates will be announced (fixed) but they'll then provide the dates by which one can elect to receive in sterling or whatever other currencies are available. That bearing in mind the exchange rate for the Special Dividend currency conversion into South African Rand was to have been set on 4 January 2019.

I must admit the proceeds this end are on the relatively small side so we haven't bothered to delve into the finer detail, which'll be somewhere or other.

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Re: BHP completes sale of Onshore US assets

#192485

Postby tjh290633 » January 10th, 2019, 4:53 pm

From the notice about the final dividend conversion price:

https://www.investegate.co.uk/bhp-billiton-plc--blt-/rns/notice-of-dividend-currency-exchange-rates/201809101629403232A/

RNS Number : 3232A
BHP Billiton PLC
10 September 2018

Notice of Dividend Currency Exchange Rates - 2018 Final Dividend

On 21 August 2018, the Board of BHP determined to pay a final dividend of 63 US cents per share for the year ended 30 June 2018. As noted in the dividend determination on 21 August 2018, the currency conversion for Australian cents, British pence and New Zealand cents will be based on the foreign currency exchange rates on the Dividend Reinvestment Election date, 10 September 2018, and for South African cents one week before the Record Date on the JSE Limited, which was 31 August 2018.1

The dividend will be paid on 25 September 2018.


That announcement was made about 10 days after the Record Date.

TJH

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Re: BHP completes sale of Onshore US assets

#192488

Postby IanTHughes » January 10th, 2019, 5:04 pm

Is this not it?

https://www.bhp.com/investor-centre/sha ... /dividends

Special Dividend Record Date (including currency conversion and currency election dates for ASX and London Stock Exchange)



Ian

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Re: BHP completes sale of Onshore US assets

#192504

Postby tjh290633 » January 10th, 2019, 5:40 pm

IanTHughes wrote:Is this not it?

https://www.bhp.com/investor-centre/sha ... /dividends

Special Dividend Record Date (including currency conversion and currency election dates for ASX and London Stock Exchange)



Ian

Yes, but not the date on which they announce it.

TJH

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Re: BHP completes sale of Onshore US assets

#192506

Postby PinkDalek » January 10th, 2019, 5:52 pm

IanTHughes wrote:Is this not it?

https://www.bhp.com/investor-centre/sha ... /dividends

Special Dividend Record Date (including currency conversion and currency election dates for ASX and London Stock Exchange)



Ian



That's part of the quote we've seen earlier but also in your link:

The exchange rates applicable to the BHP dividend being paid in other currencies will be based on the foreign currency exchange rates on the Record Date, being 11 January 2019, and will be announced to the market.

Sterling in this case being an other currency.

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Re: BHP completes sale of Onshore US assets

#192808

Postby lansdown » January 11th, 2019, 4:43 pm

https://www.investegate.co.uk/bhp-group ... 38469272M/

Ex rt 1.282550. Actual payment 79.529063p per share


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