BAE systems (BA.)

[BristolDave]

For those looking for some extra diversity in their portfolios I notice that the yield for BA. has today hit 4.6%.

I originally purchased them in 2011 for about 300 ish and they have offered a steadily rising dividend since then and performed incredibly well. This is the first time in ages that the yield has made them a potential HYP share, I have taken the opportunity to make my first top up on these for 7 years.

Just thought I would mention this as they could also be viewed at this level as a potential recovery share

[TUK020]

I top sliced them at 650, getting slightly nervous at that level about pension deficit etc versus growth level and yield.

Now toying with the idea of getting back in a bit. Think the bad news about Saudi has been overdone - looks like MBS will get away with his bad behaviour with sanction.

Still, they are probably behind a couple of other top up candidates at the moment - WPP, and a couple of I.T.s
Already very heavy in VOD, BATS, IMB so not looking to push further on these.
AV. , MGAM also on the radar

[Wizard]

Not exactly high yield when the FTSE100 is offering 4.5%.

Terry.

[kempiejon]

Not exactly high yield when the FTSE100 is offering 4.5%.
Terry.

I've held BAe for 9 and a bit years and they do come into range every now and again, although this looks like the best of the past couple of years though as you note Terry still average yielding compared the FTSE100.

[Wizard]

Not exactly high yield when the FTSE100 is offering 4.5%.
Terry.

I've held BAe for 9 and a bit years and they do come into range every now and again, although this looks like the best of the past couple of years though as you note Terry still average yielding compared the FTSE100.

And the rate of increase over the last five years at 2.2% is not exactly spectacular.

Terry.

[idpickering]

Irrespective of yesterday's drop in sp, and the current yield on offer from BAE Systems, they remain a 'hold' for me. There are higher yields elsewhere.

Ian.

[BristolDave]

My original comment was more to do with portfolio diversification as sector wise they are not in one of the usual suspects.

[IanTHughes]

Not exactly high yield when the FTSE100 is offering 4.5%

I've held BAe for 9 and a bit years and they do come into range every now and again, although this looks like the best of the past couple of years though as you note Terry still average yielding compared the FTSE100.

And the rate of increase over the last five years at 2.2% is not exactly spectacular.

Is that not ahead of inflation over the period? What more should an HYP achieve in your opinion?


Ian

[kempiejon]

My original comment was more to do with portfolio diversification as sector wise they are not in one of the usual suspects.

BristolDave,
As I said a few posts back they're in my HYP. I remember back on the other site saying that human nature would probably make baccy, beer and bombs, long term industries and Imperial, Scottish and Newcastle and BAe covered those sectors for my HYP.

[Breelander]

...I remember back on the other site saying that human nature would probably make baccy, beer and bombs, long term industries and Imperial, Scottish and Newcastle and BAe covered those sectors for my HYP.

So what's you tipple now? My HYP was 'dry' for many years after Carlsburg/Heineken took my S&N away from me. Eventually got Diageo to take their place.

Bree (holds BA. but no baccy)

[kempiejon]

Bree, I too was a long time without off the booze when Carlsburg/Heineken nicked my SCTN, that was one of my early takeovers and I was quite miffed at losing a perfectly good income share. I can't remember and it'd take me a bit of work to see where the money went but it wasn't another brewer. I eventually bought Diageo in the booze sector but I think that was some years later. I have bought some Greene King in the past couple of years but they're not so much a booze company as a leisure plc with their pubs, restaurants, hotels, though they do sell plenty of the wet stuff.

[Wizard]

I've held BAe for 9 and a bit years and they do come into range every now and again, although this looks like the best of the past couple of years though as you note Terry still average yielding compared the FTSE100.

And the rate of increase over the last five years at 2.2% is not exactly spectacular.

Is that not ahead of inflation over the period? What more should an HYP achieve in your opinion?


Ian

My bold.

No, not according to the Hargreaves Lansdown RPI calculator which is based off ONS data. That suggests a return of 2.5% per annum is required between November 2013 and October 2018 to keep pace with inflation.

On that basis I am not sure your second question stands, but if it does then I expect it to at least match inflation and ideally do a little better. Lots of debate here about a high starting yield and a slower growth rate versus a more moderate start point and faster growth, but a marginal start rate with a track record of marginally below inflation growth, no thanks.

Terry.

[monabri]

The CAGR in dividends for BA. tells a story.

Year End Interim Final Special Total Growth
12/2018 9.00p tbc
12/2017 8.80p 13.00p - 21.80p 2.35%
12/2016 8.60p 12.70p - 21.30p 1.91%
12/2015 8.40p 12.50p - 20.90p 1.95%
12/2014 8.20p 12.30p - 20.50p 1.99%
12/2013 8.00p 12.10p - 20.10p 3.08%
12/2012 7.80p 11.70p - 19.50p 3.72%
12/2011 7.50p 11.30p - 18.80p 7.43%
12/2010 7.00p 10.50p - 17.50p 9.38%
12/2009 6.40p 9.60p - 16.00p 10.34%
12/2008 5.80p 8.70p - 14.50p 13.28%
12/2007 5.00p 7.80p - 12.80p 13.27%

[IanTHughes]

And the rate of increase over the last five years at 2.2% is not exactly spectacular.

Is that not ahead of inflation over the period? What more should an HYP achieve in your opinion?

No, not according to the Hargreaves Lansdown RPI calculator which is based off ONS data. That suggests a return of 2.5% per annum is required between November 2013 and October 2018 to keep pace with inflation.

On that basis I am not sure your second question stands, but if it does then I expect it to at least match inflation and ideally do a little better. Lots of debate here about a high starting yield and a slower growth rate versus a more moderate start point and faster growth, but a marginal start rate with a track record of marginally below inflation growth, no thanks.

My question was what should HYP - the portfolio - achieve, not one individual holding. My HYP, which includes British Aerospace Systems (BA), has so far achieved that. Yes, some of the individual holdings have not lived up to expectations, but in a portfolio of shares that is surely not unusual. Or do you expect every holding to outshine?

BA has been a solid dividend payer, increasing every year albeit slowly, luvverly jubbly


Ian

[Wizard]

Is that not ahead of inflation over the period? What more should an HYP achieve in your opinion?

No, not according to the Hargreaves Lansdown RPI calculator which is based off ONS data. That suggests a return of 2.5% per annum is required between November 2013 and October 2018 to keep pace with inflation.

On that basis I am not sure your second question stands, but if it does then I expect it to at least match inflation and ideally do a little better. Lots of debate here about a high starting yield and a slower growth rate versus a more moderate start point and faster growth, but a marginal start rate with a track record of marginally below inflation growth, no thanks.

My question was what should HYP - the portfolio - achieve, not one individual holding. My HYP, which includes British Aerospace Systems (BA), has so far achieved that. Yes, some of the individual holdings have not lived up to expectations, but in a portfolio of shares that is surely not unusual. Or do you expect every holding to outshine?

BA has been a solid dividend payer, increasing every year albeit slowly, luvverly jubbly

Ian

Your question was not well phrased then, but there is no point getting into the debate over average portfolio yield, that has been done before (usually relating to Unilever) and the mods have made it clear that such discussion is off topic for this board.

Terry.