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Looking for HYP Retailers

Practical discussions about equity High-Yield Portfolios (HYP) for income
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Tight HYP discussions only please - OT please discuss in strategies
blobby
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Looking for HYP Retailers

#204303

Postby blobby » February 27th, 2019, 2:48 pm

(I'm Starting a new thread on this rather than responding on M&S)

I would love to find an HYP retailer (especially a supermarket) that I felt I could invest in, but I can’t see anything at the moment. I’ve previously held Sainsburys, Tesco etc with mixed results but there is nothing I can see at the moment. If I could buy HYP shares in Aldi, Lidl or Amazon then I would love that.

For the wider sector are there any possibilities?

Kingfisher (KGF) is close perhaps? (record in the last 20 years is not great)

Halfords (HFD) - (I don’t like the NAV)

I have exposure to shopping centres through intu and British Land so perhaps I should just stick with that?

monabri
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Re: Looking for HYP Retailers

#204313

Postby monabri » February 27th, 2019, 3:05 pm

My only retailer is "CARD". The price is volatile....it's on a bit of an "up" at the moment.

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Re: Looking for HYP Retailers

#204322

Postby kempiejon » February 27th, 2019, 3:31 pm

I looked at and bought Dunelm in 2019 and 2017, yield has fallen now so I wouldn't pick them today at the time they probably met my portfolio average yield of around 4%.

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Re: Looking for HYP Retailers

#204342

Postby Arborbridge » February 27th, 2019, 4:11 pm

blobby wrote:If I could buy HYP shares in Aldi, Lidl or Amazon then I would love that.


:twisted:

If I could, in the cause of enlightened self interest, I would prefer to buy retailer which paid a decent percentage of tax and therefore contributed to the commonwealth of our country. I feel uncomfortable having shares in MRW owing to their dancing with the devil.

Arb.

idpickering
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Re: Looking for HYP Retailers

#204362

Postby idpickering » February 27th, 2019, 4:57 pm

blobby wrote:(I'm Starting a new thread on this rather than responding on M&S)

I would love to find an HYP retailer (especially a supermarket) that I felt I could invest in, but I can’t see anything at the moment. I’ve previously held Sainsburys, Tesco etc with mixed results but there is nothing I can see at the moment. If I could buy HYP shares in Aldi, Lidl or Amazon then I would love that.

For the wider sector are there any possibilities?

Kingfisher (KGF) is close perhaps? (record in the last 20 years is not great)

Halfords (HFD) - (I don’t like the NAV)

I have exposure to shopping centres through intu and British Land so perhaps I should just stick with that?


Without wanting to sound brash, but my first question is "Why?" Over the years I've held Dixons (DSGI), Tesco (TSCO) for a while, but no more, and Sainsbury's (SBRY), which I still hold. Over the time I've held all of the above, it was never an easy ride. You don't have to have a finger in every pie. There are better options out there, but if I was forced, it'd be Sainsbury's.

Ian.

Minesadouble
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Re: Looking for HYP Retailers

#204372

Postby Minesadouble » February 27th, 2019, 5:30 pm

Amazon trade on the NASDAQ. AMZN.
No reason you can’t buy the stock if you wish.

Raptor
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Re: Looking for HYP Retailers

#204375

Postby Raptor » February 27th, 2019, 5:34 pm

Moderator Message:
Remember the boards guidelines. Only UK FTSE shares please. No discussions on purchasing anything else. Thanks in advance. Raptor

Arborbridge
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Re: Looking for HYP Retailers

#204377

Postby Arborbridge » February 27th, 2019, 5:37 pm

Retailers are not a great scene at the moment.

Halfords and the like I would consider too niche - I'd prefer something with a more "essential" sounding remit. Probably this means food retail or Kingfisher. Of the supermarkets, only SBRY is offering a reasonable yield, somewhere near the goldilocks level. But their recent dividend history is not good, and for that yield one could invest elsewhere with a very high chance of regular increases (I'm having OT thoughts here! ;) ) and lower risk.


Arb.

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Re: Looking for HYP Retailers

#204413

Postby moorfield » February 27th, 2019, 7:49 pm

idpickering wrote: You don't have to have a finger in every pie. There are better options out there, but if I was forced, it'd be Sainsbury's.


Yes I would agree agree, blobby don't feel you need to buy every sector for the sake of it (aka, stamp collecting).

HY food & general retailers are thin on the ground in the FTSE350 - if I was forced, Inchcape (car dealership) has the requisite 5 year dividend history.

Wasron
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Re: Looking for HYP Retailers

#204420

Postby Wasron » February 27th, 2019, 8:31 pm

blobby wrote:(I'm Starting a new thread on this rather than responding on M&S)

I would love to find an HYP retailer (especially a supermarket) that I felt I could invest in, but I can’t see anything at the moment. I’ve previously held Sainsburys, Tesco etc with mixed results but there is nothing I can see at the moment. If I could buy HYP shares in Aldi, Lidl or Amazon then I would love that.

For the wider sector are there any possibilities?

Kingfisher (KGF) is close perhaps? (record in the last 20 years is not great)

Halfords (HFD) - (I don’t like the NAV)

I have exposure to shopping centres through intu and British Land so perhaps I should just stick with that?


What about Tritax Big Box REIT (BBOX)?

They own the enormous distribution centres used by the likes of Amazon and Tesco, have a £2bn market cap and a yield of 4.75%

Wasron

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Re: Looking for HYP Retailers

#204432

Postby monabri » February 27th, 2019, 9:33 pm

On the assumption that "retail" is a dodgy area to invest in, why do it for something with a yield of 4 or 5%? The risk-reward is not favourable.

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Re: Looking for HYP Retailers

#204443

Postby AndyPandy » February 27th, 2019, 10:48 pm

Pets at Home (PETS).

Mkt Cap 740M
Yield 5%

Whilst you can buy most of its product online with other retailers, my OH (who is an avid Amazon shopper) buys our dog's stuff from there. You can pick it up, feel it, sniff it etc. so some immunity to the online march (and it obviously sells online anyway). Products for pampered pets seem to be relatively immune to downturns. Certainly in the Pandy Household :roll:

It has been rolling out Vets' Practices in the store which provides an income as well as driving footfall to the shop itself. Not without teething troubles, but they do seem to be managing this rollout.

Downsides?
Retail is tough as others have commented.
Divi has been held for 2 years (last 3 payments the same).
Lots of intangibles on b/s if that worries you.


I bought into it last autumn and am comfortably in profit, along with a banked divi.

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Re: Looking for HYP Retailers

#204445

Postby moorfield » February 27th, 2019, 10:57 pm

Another thought - in the same industry (Consumer Services) you could also consider TUI - a retailer of holidays, if you like.

It's sp has been somewhat beaten down following a profit warning, but IMO presents an attractive entry point for the long term, particularly as it's dividend suffers the drag of a tax (discussed elsewhere here). Net of that tax I make its yield 5.8% tonight and am planning to add as a new holding into my portfolio next month.

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Re: Looking for HYP Retailers

#204447

Postby kempiejon » February 27th, 2019, 11:21 pm

Re TUI, they only pay one dividend a year and xD was a few weeks back so it'll be 12 months before the first payout for new buyers. That's probably the worst dividend drag in the market today, no, Eazyjet pay once a year too xD tomorrow so too late for them too.

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Re: Looking for HYP Retailers

#204460

Postby Arborbridge » February 28th, 2019, 6:26 am

monabri wrote:On the assumption that "retail" is a dodgy area to invest in, why do it for something with a yield of 4 or 5%? The risk-reward is not favourable.


If the yield were higher, then we would probably say that that indicates the companies were too risky. Turning the argument on its head, the modest yield suggests the risk is lower than we think!

I'm not getting at you Monabri, but I've often noticed that we admire particular companies but regret the yield is too low - yet as soon as it's high enough, ironically, we worry about the implied risk.

As it happens, I do agree with what you wrote in the sense that for a yield of 4%-5% one could probably buy lower risk.

Arb.

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Re: Looking for HYP Retailers

#204485

Postby kempiejon » February 28th, 2019, 8:35 am

And when I was looking at risky Duneml they had a yield over 5% and a cracking history of annualised double digit dividend growth, now though they yield a measly 3.3% and for the past couple of years have just scraped div increases ahead of inflation.
Still that one example is just a lucky find.

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Re: Looking for HYP Retailers

#204510

Postby Alaric » February 28th, 2019, 10:15 am

kempiejon wrote:And when I was looking at risky Duneml they had a yield over 5% and a cracking history of annualised double digit dividend growth, now though they yield a measly 3.3% and for the past couple of years have just scraped div increases ahead of inflation.


Dunelm appears to be a Company that drifted into high yield territory because they maintained or increased their dividend even in the face of share price falls. Over the last couple of months, the share price has recovered a bit, thus reducing the dividend yield.

blobby
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Re: Looking for HYP Retailers

#204518

Postby blobby » February 28th, 2019, 10:35 am

Many thanks everyone for all the responses on this topic it has been an interesting read. Plenty of ideas for more research :)

88V8
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Re: Looking for HYP Retailers

#204533

Postby 88V8 » February 28th, 2019, 11:26 am

Ahh, retail.
Halfords were a cutter, sold them.
Held Tesco, then not.
Have Morrisons, they were a Luni pick back in the day, that was then.
Used to have MKS, sold when the yield fell. As sectors go, I do still like a sector of their rich fruit cake.

The rot set in with Woolworths, yes I had them too.

The way ahead for retail is not clear. The politicos cling to taxing bricks & mortar, they tax high-street parking then wonder why no one shops, they dither over taxing the onliners.

I'd give it a miss for a year or three. Not all sectors are fruity.

V8

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Re: Looking for HYP Retailers

#204547

Postby brightncheerful » February 28th, 2019, 12:32 pm

Unless divi has to come direct from a retailer, how about indirectly? in which case HMSO (Hammerson, which is purely retail) currently yields 6.94%.

Otherwise I wouldn't touch retailers including supermarkets with a bargepole. They're all heavily into keeping up appearances by reducing costs and the reducing divi is another way to maintain survival. With M&S slashing the divi by 40% just to fund investing in the development of its business, it won't be long before other quoted retailers looking to reduce money going out see that as a useful precedent.


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