IanTHughes HYP – Into Year Eight

[IanTHughes]

My report in May 2018: viewtopic.php?f=15&t=11577&p=137385#p137385
Progress review also in May 2018: viewtopic.php?f=15&t=11787&p=140164#p140164

I have now learned how to properly post tables so hopefully will not need the help that was required last time – once again, thanks to Gengulphus and Itsallaguess for that help.

So, here goes:


Note:
a) Recent purchase - CAGR is volatile

The following review will cover the last twelve months and it is my intention to repeat this at least annually.

TRANSACTIONS


Most transactions have been top-ups of current holdings, funded by a mix of new money and dividends received, but there were six purchases of new holdings. Two, Greene King PLC (GNK) and New River Retail REIT (NRR), arose thanks to the outright sales of Pearson PLC (PSON) and Segro PLC (SGRO) respectively. The four other newbies are: Crest Nicholson Holdings PLC (CRST), Marston’s PLC (MARS), Persimmon PLC (PSN) and British American Tobacco PLC (BATS).

TINKERING RESULTS

Sell Pearson PLC (PSON)
Buy Greene King PLC (GNK)

PSON has increased in value since but not as much as my holding in GNK. Dividends received and current yield is much higher

Sell Segro PLC (SGRO)
Buy New River Retail REIT (NRR)

SGRO has reduced in value since but not as much as my holding in NRR. Dividends received and current yield is much higher

Score: Tinker 1.5 – 0.5 No Action

Seriously, in truth it is too early to tell, especially with the sale of SGRO, we shall see.

PROGRESS TO DATE

First trades:	10 Feb 2012
CAGR:		6.68%
Current Yield:	6.14%

Accumulation Units

Initial Unit Value: £10.0000
Current Unit Value: £17.7770

Annual Growth Rate: 8.46%

Dividend Units

Initial Unit Value: £10.0000
Current Unit Value: £12.6293

Annual Growth Rate: 3.35%

Dividend per Unit

Initial Dividend per Unit: 54.00p
Current Dividend per Unit: 77.60p

Annual Growth Rate: 5.25%

CONCENTRATION LIMITS

I control diversification by placing limits on the maximum percentage of the overall portfolio Value, Income or Cost that is allowed for any one Holding, Sector and Industry. I have occasionally adjusted these limits and they are currently set at:


It should be noted that, unlike some posters on here who I believe actively maintain diversification by adding to under-weight holdings, I only add to any holding if, at the time of purchase, it qualifies as offering the highest available yield that satisfies my Dividend Safety criteria and does not create a break of any of the foregoing Concentration Limits. In other words, I do not “maintain” diversification but rather “forbid” over-concentration.

I use both Value and Cost limits to determine whether or not a particular purchase should be allowed but as yet I do not worry about breaches of the Income limit – there are none at present. I should also add that the breaching of a limit – as is currently the case for the Customer Goods industry as well as the Oil & Gas sector – does not automatically trigger a top-slice. I am adding funds and hopefully new monies directed elsewhere should solve the problem in time. I have not yet decided if that practice will change as and when I start withdrawing an income which will not be for a few more years yet, regrettably

Constructive comments are welcome


Ian

[monabri]

Apologies, Ian
I reformatted it so we could read the table - use the "slider bar" to read the columns that run off the page.

INDUSTRY          | VALUE  | INCOME | SECTOR                              | VALUE  | INCOME | EPIC | COMPANY                 | VALUE | INCOME | YIELD  | CAGR    | NOTE | FIRST     | #
                  |        |        |                                     |        |        |      |                         |       |        |        |         |      |           |  
Basic Materials   | 17.41% | 16.24% | Mining                              |  5.04% |  4.19% | BHP  | BHP                     | 4.51% |  3.83% |  5.22% |  12.44% |      | 10-Apr-15 | 1
                  |        |        |                                     |        |        | S32  | SOUTH32                 | 0.54% |  0.37% |  4.21% |  20.12% |      | 25-May-15 | 0
                  |        |        | Oil & Gas Producers                 | 12.37% | 12.05% | BP   | BP                      | 6.46% |  6.13% |  5.84% |  19.99% |      | 10-May-16 | 4
                  |        |        |                                     |        |        | RDSB | RDSB                    | 5.92% |  5.92% |  6.16% |   8.18% |      | 11-Jun-12 | 9
Consumer Goods    | 22.38% | 22.18% | Beverages                           |  5.81% |  2.86% | BVIC | BRITVIC                 | 5.81% |  2.86% |  3.03% |  22.51% |      | 10-Aug-12 | 1
                  |        |        | Food Producers                      |  3.44% |  2.34% | TATE | TATE                    | 3.44% |  2.34% |  4.20% |   8.61% |      | 12-Oct-15 | 3
                  |        |        | Tobacco                             |  8.92% | 10.07% | BATS | BATS                    | 3.67% |  3.96% |  6.64% | 241.02% | (a)  | 10-Jan-19 | 1
                  |        |        |                                     |        |        | IMB  | IMB                     | 5.24% |  6.10% |  7.16% |   6.62% |      | 10-Apr-14 | 9
                  |        |        | Household Goods & Home Construction |  4.22% |  6.92% | CRST | CREST                   | 1.32% |  1.85% |  8.66% |   4.40% | (a)  | 10-Jul-18 | 2
                  |        |        |                                     |        |        | PSN  | PERSIMMON               | 2.90% |  5.07% | 10.73% |   0.00% | (a)  | 10-Sep-18 | 3
Consumer Services | 11.11% | 10.81% | Food & Drug Retailers               |  1.87% |  1.38% | SBRY | SAINSBURYS              | 1.87% |  1.38% |  4.54% |  -0.23% |      | 10-May-12 | 2
                  |        |        | General Retailers                   |  2.01% |  2.56% | BWNG | BROWN GP                | 2.01% |  2.56% |  7.84% | -25.49% |      | 10-Aug-16 | 4
                  |        |        | Travel & Leisure                    |  7.23% |  6.87% | GNK  | GREENE KING             | 4.20% |  3.54% |  5.18% |  49.27% | (a)  | 10-Apr-18 | 1
                  |        |        |                                     |        |        | MARS | MARSTON'S               | 2.06% |  2.57% |  7.67% |  10.69% | (a)  | 10-Aug-18 | 4
                  |        |        |                                     |        |        | SGC  | STAGECOACH GROUP        | 0.97% |  0.76% |  4.83% |   2.28% |      | 10-Oct-17 | 2
Financials        | 16.89% | 18.47% | Banks                               |  4.84% |  4.92% | HSBA | HSBC                    | 4.84% |  4.92% |  6.25% |   6.57% |      | 11-Jun-12 | 8
                  |        |        | Life Insurance                      |  6.04% |  6.68% | AV   | AVIVA                   | 2.31% |  2.67% |  7.12% |   7.61% |      | 10-Feb-12 | 1
                  |        |        |                                     |        |        | PHNX | PHOENIX GROUP           | 3.73% |  4.01% |  6.61% |   5.43% |      | 10-Mar-17 | 1
                  |        |        | Financial Services                  |  2.14% |  3.08% | SLA  | STANDARD LIFE ABERDEEN  | 2.14% |  3.08% |  8.89% |  -3.39% |      | 12-Jan-16 | 4
                  |        |        | Nonlife Insurance                   |  3.88% |  3.79% | ADM  | ADMIRAL GROUP           | 3.88% |  3.79% |  6.00% |  14.67% |      | 10-Dec-15 | 1
Health Care       |  4.83% |  2.69% | Pharmaceuticals & Biotechnology     |  4.83% |  2.69% | AZN  | ASTRAZENECA             | 4.83% |  2.69% |  3.42% |  16.71% |      | 10-Feb-12 | 2
Industrials       |  4.50% |  4.23% | Aerospace & Defence                 |  3.22% |  2.50% | BA   | BAE SYSTEMS             | 3.22% |  2.50% |  4.78% |  10.92% |      | 10-Feb-12 | 2
                  |        |        | Construction & Materials            |  0.99% |  1.28% | KIE  | KIER GROUP              | 0.99% |  1.28% |  7.91% |  -4.28% |      | 11-Jun-12 | 2
                  |        |        | Industrial Transportation           |  0.29% |  0.45% | RMG  | ROYAL MAIL PLC          | 0.29% |  0.45% |  9.57% |   2.20% |      | 11-Oct-13 | 1
Property          |  4.70% |  7.30% | Real Estate Investment Trusts       |  4.70% |  7.30% | NRR  | NEW RIVER REIT          | 4.70% |  7.30% |  9.55% | -22.39% | (a)  | 08-Jun-18 | 1
Telecom           |  9.82% |  9.61% | Fixed Line Telecom                  |  2.60% |  2.09% | KCOM | KCOM GROUP              | 2.09% |  1.49% |  4.39% |  -8.52% |      | 10-Mar-17 | 4
                  |        |        |                                     |        |        | BT-A | BT GROUP                | 0.51% |  0.60% |  7.22% |  16.01% | (a)  | 11-Jun-18 | 1
                  |        |        | Mobile Telecom                      |  7.22% |  7.51% | TALK | TALKTALK                | 3.19% |  1.30% |  2.50% | -20.76% |      | 10-Mar-17 | 2
                  |        |        |                                     |        |        | VOD  | VODAFONE                | 4.03% |  6.22% |  9.48% |   2.35% |      | 11-Apr-12 | 9
Utilities         |  7.39% |  8.49% | Electricity                         |  4.71% |  6.17% | SSE  | SSE PLC                 | 4.71% |  6.17% |  8.06% |   4.96% |      | 10-Feb-12 | 8
                  |        |        | Multi-Utilities                     |  2.68% |  2.32% | NG   | NATIONAL GRID           | 2.68% |  2.32% |  5.32% |   4.49% |      | 10-Apr-15 | 3

(p.s. I also edited some of the company names - mainly removing the 'ORD' reference to the share type).

[IanTHughes]

Apologies, Ian
I reformatted it so we could read the table) - use the slider bar to read the columns that run off the page.

No problem but I am perplexed. I can read both tables in full and there is no slider.

Ian

[Raptor]

Apologies, Ian
I reformatted it so we could read the table) - use the slider bar to read the columns that run off the page.

No problem but I am perplexed. I can read both tables in full and there is no slider.

Ian

Ian

It is to do with full width feature we added recently, so that different screens show the maximum they are allowed. I think that is the reason anyway. We are also looking at another way to increase the usable space. We have been working behind the scenes to make it more portable from device to device.

As they say, "Watch this space".

Raptor.

[tjh290633]

I had to reduce the font size to almost unreadable to get all the second table on screen.

TJH

[monabri]

(It's probably something daft like screen resolution - no matter. For me, all the data other than Ian's first table was perfectly legible).

I wonder if you mean XIRR rather than CAGR (I suspect so based on the recent acquisition of BATS in Jan 2019 and a report CAGR of 241 %)?

For me as a HYP builder I'm interested in the way the dividends have been building over the years - "dividends per unit".

[IanTHughes]

I had to reduce the font size to almost unreadable to get all the second table on screen.

Here is the second table using tab "PRE"

Does that help?

Date      | EPIC | Name                                 | B/S  | Concentration | Reason          
06-Apr-18 | PSON | PEARSON ORD GBP0.25                  | Sell |        -2.44% | Tinker - Buy GNK
10-Apr-18 | IMB  | IMPERIAL BRANDS GBP0.10              | Buy  |         1.58% | Top Up          
10-Apr-18 | GNK  | GREENE KING PLC ORD 12.5P            | Buy  |         3.62% | New Holding     
10-May-18 | BWNG | BROWN (N) GROUP PLC ORD 11 1/19P     | Buy  |         0.35% | Top Up          
10-May-18 | SSE  | SSE PLC ORD GBP0.50                  | Buy  |         0.94% | Top Up          
08-Jun-18 | SGRO | SEGRO PLC ORD GBP0.10                | Sell |        -5.69% | Tinker - Buy NRR
08-Jun-18 | NRR  | NEW RIVER REIT PLC ORD 1P            | Buy  |         6.26% | New Holding     
11-Jun-18 | BT-A | BT GROUP ORD GBP0.05                 | Buy  |         0.59% | Top Up          
10-Jul-18 | CRST | CREST NICHOLSON HOLDINGS PLC ORD 5P  | Buy  |         0.88% | New Holding     
10-Aug-18 | CRST | CREST NICHOLSON HOLDINGS PLC ORD 5P  | Buy  |         0.82% | Top Up          
10-Aug-18 | MARS | MARSTON'S ORD GBP0.07375             | Buy  |         1.03% | New Holding     
10-Sep-18 | PSN  | PERSIMMON PLC ORD 10P                | Buy  |         1.83% | New Holding     
10-Oct-18 | MARS | MARSTON'S ORD GBP0.07375             | Buy  |         0.34% | Top Up          
10-Oct-18 | PSN  | PERSIMMON PLC ORD 10P                | Buy  |         3.12% | Top Up          
12-Nov-18 | PSN  | PERSIMMON PLC ORD 10P                | Buy  |         1.83% | Top Up          
10-Jan-19 | MARS | MARSTON'S ORD GBP0.07375             | Buy  |         0.47% | Top Up          
10-Jan-19 | BATS | BRIT AMER TOBACCO ORD GBP0.25        | Buy  |         4.44% | New Holding     
11-Feb-19 | MARS | MARSTON'S ORD GBP0.07375             | Buy  |         0.44% | Top Up          
11-Feb-19 | VOD  | VODAFONE GROUP ORD USD0.11428571     | Buy  |         1.25% | Top Up          
11-Mar-19 | VOD  | VODAFONE GROUP ORD USD0.11428571     | Buy  |         0.90% | Top Up

[IanTHughes]

I wonder if you mean XIRR rather than CAGR (I suspect so based on the recent acquisition of BATS in Jan 2019 and a report CAGR of 241 %)?

For me as a HYP builder I'm interested in the way the dividends have been building over the years - "dividends per unit".

Yes, I do mean XIRR

For me too, it is the progress of the Dividend per Unit which is most interesting


Ian

[Arborbridge]

Apologies, Ian
I reformatted it so we could read the table) - use the slider bar to read the columns that run off the page.

No problem but I am perplexed. I can read both tables in full and there is no slider.

Ian

I wasn't sure the re-format was better than the original either. Maybe it depends on screen and resolution, but I don;t care much for having to slide back and forth on the second way of doing it.

Arb.

[Arborbridge]

Ian,

I notice you have a chart of forecast dividend per unit - do you not keep a plot of actual values?
I was going to suggest it might be fun to plot yours and mine on the same chart - and anyone else who wants to join in.

Arb.

[IanTHughes]

Ian,

I notice you have a chart of forecast dividend per unit - do you not keep a plot of actual values?
I was going to suggest it might be fun to plot yours and mine on the same chart - and anyone else who wants to join in.

Ah, I really must change that as it is in fact based on Historical Dividends, only adjusted where future dividends have been announced but not officially declared - British American Tobacco (BATS) for example. Also shares like BP PLC (BP) where an increase in quarter one was "assumed" for all 4 quarters.

I do not know how to record "Actual Dividend per Unit" when I am adding money and "buying" additional units every month.


Ian

[Arborbridge]

I do not know how to record "Actual Dividend per Unit" when I am adding money and "buying" additional units every month.


Ian

There are various ways. I know the problem: you add a load of units which are not producing income for several months.
I used to work out the income per unit at the end of a quarter with that quarter's total income but use the number of units from three months ago. This seemed a good compromise to allow for the "lag" .

About three years back someone explained it was better to work out the income on a daily basis in one column, and accumulate the income in the next column. So the income would be that day's income and the applicable number of units would be whatever the total units in circulation was after the most recent purchase. It sounds laborious, but actually once the columns are set up, it's a doddle. I found that it gave very similar results to my old system (I ran a trial for a year) and I do it that way all the time now.

Having now got a running total column throughout the year, I can pick out any period I like to build a chart. Mostly usually, I plot the sum of the past four quarter - or in other words each quarter plotted represents a rolling one year of dividends.

I'm intending to publish an up to date figure at the end of March.

Off to hear the news now.... (so not proof read the above!!)

[tjh290633]

I had to reduce the font size to almost unreadable to get all the second table on screen.

Here is the second table using tab "PRE"

Does that help?

Sorry, Ian, I meant the table using <pre> in viewtopic.php?p=207038#p207038 produced by monabri of your first table.

Your second table always was fully visible, it was the squeezing up of your first table which caused trouble.

TJH

[monabri]

Ian,

Any thoughts on a new addition of WPP?

Monabri

[moorfield]

Constructive comments are welcome

Ian, my previous post has been airbrushed so I'll attempt to be more analytical with this one, and to be clear I am contributing this in context of this board guidance:

The construction, management and performance of HYPs is acceptable.

9% of your capital is tied up in two low yielding shares - BVIC and TALK. The latter has slashed its dividend by >70% over the last two years (ouch), I don't envisage you will be buying more of that, so it looks destined to become an inefficient low yield rump holding. Nor do I sense you are a dogmatic buyer and holder, as your tinkers of PSON and SGRO suggest.

So why not trade these for a higher yield share to ratchet up your income? That suggestion should be alien to no-one here - TJH does this regularly, albeit covered in medianic wrapping paper.

My suggestion would be ULVR, which may seem unpalatable but deliberately chosen, of course, to illustrate a Practical (rather than Dogmatic) caveat I have argued here before - in this example at least you and the mods cannot disagree that would ratchet up your overall portfolio income and yield, and ULVR's dividend record may help you sleep a little easier.

If not ULVR, then there are higher yielders on offer, of course, from FTSE100 that you don't own currently:
CNA, WPP, LGEN, TUI, RIO, GSK, UU.

Moderator Message:
As pointnted put on many occasions to this poster. ULVR currently does not meet the criteria for a "new" share purchase, there are many others that do. Raptor.

[Alaric]

9% of your capital is tied up in two low yielding shares - BVIC and TALK.

If Britvic is a low yielding share, that's because its price performance has outpaced its dividend growth.

https://www.britvic.com/investors/share ... /dividends

The share price was 290 back in 2012, it's now around 930-940.

Dividend per share in 2012 was 17.7 and 28.2 now.

[IanTHughes]

9% of your capital is tied up in two low yielding shares - BVIC and TALK. The latter has slashed its dividend by >70% over the last two years (ouch), I don't envisage you will be buying more of that, so it looks destined to become an inefficient low yield rump holding. Nor do I sense you are a dogmatic buyer and holder, as your tinkers of PSON and SGRO suggest.

So why not trade these for a higher yield share to ratchet up your income? That suggestion should be alien to no-one here - TJH does this regularly, albeit covered in medianic wrapping paper.

My suggestion would be ULVR, which may seem unpalatable but deliberately chosen, of course, to illustrate a Practical (rather than Dogmatic) caveat I have argued here before - in this example at least you and the mods cannot disagree that would ratchet up your overall portfolio income and yield, and ULVR's dividend record may help you sleep a little easier.

If not ULVR, then there are higher yielders on offer, of course, from FTSE100 that you don't own currently:
CNA, WPP, LGEN, TUI, RIO, GSK, UU.

My goodness, are you Unilever PLC (ULVR) aficionados paid a commission?

I know that my two previous tinkers show a certain openness with regard to whole subject but I am very definitely not totally convinced that such trading will inevitably create improvement.

Britvic PLC (BVIC)
BVIC Yield: 3.03%
ULVR Yield: 3.24%

The BVIC dividend has increased at an average annual rate of 8.91%, over the last 5 years, and 8.39% over the last 10 years. The comparative figures for ULVR are 7.93% and 8.18%, although I do appreciate that the increases in the ULVR dividend have picked up recently.

Why would I pay the commission and Stamp Duty to gain what is only a slightly higher yield with a worse record of dividend increases?

TalkTalk Telecom (TALK)
TALK Yield: 2.50%
ULVR Yield: 3.24%

The problem with swapping TALK for ULVR is that I would be further over limit within the Consumer Goods Industry grouping. I will not do that.

With regards to another replacement, the yield on TALK is not so low as to make it obvious, to me at least, that such a swap would measurably improve things for sure. Who is to say that TALK will not be the dividend maestro, now the cut is out of the way?


Ian

[IanTHughes]

9% of your capital is tied up in two low yielding shares - BVIC and TALK.

If Britvic is a low yielding share, that's because its price performance has outpaced its dividend growth.

https://www.britvic.com/investors/share ... /dividends

The share price was 290 back in 2012, it's now around 930-940.

Dividend per share in 2012 was 17.7 and 28.2 now.

Yes, I purchased in August 2012 at a price of 320.245. What a star it has been


Ian

[moorfield]

With regards to another replacement, the yield on TALK is not so low as to make it obvious, to me at least, that such a swap would measurably improve things for sure. Who is to say that TALK will not be the dividend maestro, now the cut is out of the way?

Out of interest, do you see anything in TALK that you don't in the much higher yield shares I've listed there which is persuading you to hold on? The irony here being you couldn't buy more if you did, nor could I, because them's the rules.

[IanTHughes]

With regards to another replacement, the yield on TALK is not so low as to make it obvious, to me at least, that such a swap would measurably improve things for sure. Who is to say that TALK will not be the dividend maestro, now the cut is out of the way?

Out of interest, do you see anything in TALK that you don't in the much higher yield shares I've listed there which is persuading you to hold on? The irony here being you couldn't buy more if you did, nor could I, because them's the rules.

No, unlike others, maybe including you, I do not claim to be able to see into the future.

Ian