HYP Adjustment

[tjh290633]

Having had my name taken in vain, I thought it might be time to show my portfolio listed by share of dividend income:

Rank   EPIC   % Income
   1   TW.       6.02%
   2   BT.A      4.79%
   3   IMB       4.78%
   4   SSE       4.45%
   5   MARS      4.32%
   6   AV.       4.07%
   7   LGEN      4.00%
   8   RIO       3.94%
   9   RDSB      3.91%
  10   BATS      3.71%
  11   BP.       3.58%
  12   ADM       3.57%
  13   GSK       3.40%
  14   BHP       3.20%
  15   VOD       3.06%
  16   UU.       3.03%
  17   NG.       2.88%
  18   BLND      2.86%
  19   LLOY      2.58%
  20   MKS       2.39%
  21   S32       2.37%
  22   WMH       2.27%
  23   KGF       2.15%
  24   TATE      2.01%
  25   AZN       1.97%
  26   SMDS      1.90%
  27   BA.       1.88%
  28   SGRO      1.84%
  29   ULVR      1.70%
  30   IMI       1.68%
  31   DGE       1.43%
  32   RB.       1.18%
  33   PSON      1.13%
  34   CPG       1.06%
  35   TSCO      0.90%

As you will see, BT.A provides almost 5% of my dividend income, only beaten by TW. which is about 6%. I didn't add to TW. to get it there, it did it all of its own accord.

Until such time as BT.A decides to modify its dividend policy, I see no reason to forego the 8.7% yield.

TJH

[IanTHughes]

Very nice Ian, very organised looking.

Thank you, and for the thanks from others too. it took forever, but practice makes perfect.

So it is true, you can teach an old dog new tricks!

A less than perfect share is BT.A. They’re in line for a top up this month I think, unless anyone can sway me otherwise? I didn’t much like fiddling with my HYP yesterday, but that had to be done. I’d been toying with the idea for a while. Now I just want the portfolio to do its job, with me giving it time to do so, like a good HYPer should.

I am not going to try to sway you either way but just point out that the dividend has been held for three years and the current intention, as reported in the latest Annual Report, is to hold again next year. Still, a hold is not a cut, right?


Ian

[Arborbridge]

I am not going to try to sway you either way but just point out that the dividend has been held for three years and the current intention, as reported in the latest Annual Report, is to hold again next year. Still, a hold is not a cut, right?


Ian

For me, it does rather taint it. It suggests at least some sort of struggle is going on (as we know, of course) but it still doesn't show us whether they might win through with a slight increase in a year or two, or whether it is pointing to a cut.

TJH clearly feels the risk is worth taking to get the yield whilst we can and I believe he had the courage to top up BT recently.

Arb.

[tjh290633]

TJH clearly feels the risk is worth taking to get the yield whilst we can and I believe he had the courage to top up BT recently.

Arb.

I did indeed. In fact I topped up BT.A seven times in the last 3 years, having trimmed it back in November 2015 at 479p.

November 2016 at 361p
April 2017 at 388p
October 2017 at 280p
December 2017 at 257p
May 2018 at 235p
May 2019 at 202p
August 2019 at 174p.

They are now disqualified from any more topping up on account of both share of cost and share of income being close to 5%.

TJH

[Arborbridge]

TJH clearly feels the risk is worth taking to get the yield whilst we can and I believe he had the courage to top up BT recently.

Arb.

I did indeed. In fact I topped up BT.A seven times in the last 3 years, having trimmed it back in November 2015 at 479p.

November 2016 at 361p
April 2017 at 388p
October 2017 at 280p
December 2017 at 257p
May 2018 at 235p
May 2019 at 202p
August 2019 at 174p.

They are now disqualified from any more topping up on account of both share of cost and share of income being close to 5%.

TJH

The thought of topping up is a shade discouraging on this share. I'm going backwards and even with dividends, I'm 30% underwater. Time in the market? It was one of my first HYP shares. Here are by buy points and prices:-



Perhaps I really should just carrying on taking the medicine: i.e. plan another topup at this price. I'm not up to my maximum sunk capital weight yet.

I hadn't intended to highjack your thread Ian, but there's nothing like a bit of mutual pickering, don't y'think?

Arb.

[idpickering]

Thanks for your input guys, and don’t worry about hijacking my thread Arb. Your input is always welcome. Knowing me i’ll Just keep it simple and go through with the BT.A top up. I’m ok with a held dividend, for now at least. I’m not at my max spend on their shares currently too.

Ian.

[idpickering]

I should add by the way, that I did top BT.A up in time to qualify for the finals dividend. I’m keen to get in before the interim ex divi date too, by buying even more of their shares.

Ian.

[Itsallaguess]

Here's the sector spread for my HYP as of now.

I just wanted to mention that kiloran and I did a lot of work on the last major update of the HYPTUSS tool to specifically help with people posting HYP tables to this forum.

We introduced a new 'Overview' sheet that carries out the following functionality -

1. Compiles HYP data for individual holdings, including Sector, Super-Sector, Capital Weighting, Income Weighting, and also Forecast Yield.

2. Compiles a separate Sector or Super-Sector table, showing granular Capital and Income Weightings from those Sectors or Super-Sectors.

3. Enables, at the push of a button, the generation of 'Lemon Fool' table-data, that is copied straight to your clipboard and can then be simple 'pasted' into a Lemon Fool post of your choice.

Some sample outputs -

1. Overview sheet in 'Sector' mode - https://i.imgur.com/oBJfBcm.png

2. Overview sheet in 'Super-Sector' mode - https://i.imgur.com/8my7La7.png

3. Portfolio output automatically generated in 'table' format, and copied to your clipboard for pasting into a Lemon Fool post - https://i.imgur.com/MgMIDGf.png

The HYPTUSS tool containing the above improvements can be downloaded from this page - http://lemonfoolfinancialsoftware.weebly.com/hyp-top-up.html

Cheers,

Itsallaguess

[TUK020]

I should add by the way, that I did top BT.A up in time to qualify for the finals dividend. I’m keen to get in before the interim ex divi date too, by buying even more of their shares.

Ian.

IIAG beat me to it. the HYPTUSS enhancements are rally very good for this sort of thing. Recommend you take them for a test drive.
tuk020

[idpickering]

I should add by the way, that I did top BT.A up in time to qualify for the finals dividend. I’m keen to get in before the interim ex divi date too, by buying even more of their shares.

Ian.

IIAG beat me to it. the HYPTUSS enhancements are rally very good for this sort of thing. Recommend you take them for a test drive.
tuk020

Thank you for that but personally I’d rather He had put his post in a new thread, because the chat that his post will glean will be a divertion from my own OP. With respect to him of course.

Ian.

[Itsallaguess]

The HYPTUSS enhancements are rally very good for this sort of thing. Recommend you take them for a test drive.

Thank you for that but personally I’d rather He had put his post in a new thread, because the chat that his post will glean will be a diversion from my own OP. With respect to him of course.

Apologies Ian - I was only trying to be helpful given your previous issues with posting portfolio tables, and in case anyone else might also find it useful - but I agree that I should have also put a link to the Financial Software Board, and asked for any further discussion on that particular topic to be carried out over there -

https://www.lemonfool.co.uk/viewforum.php?f=27

Cheers,

Itsallaguess

[idpickering]

The HYPTUSS enhancements are rally very good for this sort of thing. Recommend you take them for a test drive.

Thank you for that but personally I’d rather He had put his post in a new thread, because the chat that his post will glean will be a diversion from my own OP. With respect to him of course.

Apologies Ian - I was only trying to be helpful given your previous issues with posting portfolio tables, and in case anyone else might also find it useful - but I agree that I should have also put a link to the Financial Software Board, and asked for any further discussion on that particular topic to be carried out over there -

https://www.lemonfool.co.uk/viewforum.php?f=27

Cheers,

Itsallaguess

Thank you for that. I meant no disrespect and value your efforts big time. Back to my issue though, I’m going to carry on with the BT.A top up I think.

Ian.

[Arborbridge]

Thank you for that but personally I’d rather He had put his post in a new thread, because the chat that his post will glean will be a divertion from my own OP. With respect to him of course.

Ian.

I think that's fair comment (escpecially about the continuing discussion), but on the other hand, I found IAAG's post (though a distraction) a helpful one because I didn't know there was a new HYPTUSS version published.

From such tangential comments, come forth good information on occasion. I suppose that's how we all benefit from "having a conversation".

Arb.

[Gengulphus]

As regards BT, I believe plenty of people would try to sway you otherwise, but as TJH once said, - it's really hard to envisage BT collapsing in a heap, despite its well known pension size. I am probably holding off for a while even though it's No2 in my ranking. I just wonder if the dividend will be cut this year, and there are other fish to fry.

I agree that it's hard to envisage BT collapsing in a heap, but remember that a company's business doesn't actually need to collapse in a heap for shares in the company to become worthless. For example, my HYP owned shares in Bradford & Bingley until the government of the time nationalised it without compensation in 2008 - it's arguable whether it was inevitably destined to collapse in a heap, and the government of the time certainly argued that, but it's also certain that it didn't actually collapse in a heap.

With BT being a formerly-nationalised company (though one does have to go back 35 years for it to have been fully nationalised, and 26 years for it to have been even partly nationalised), having distinctly utility-like characteristics and being big enough that regular stories about it making a mess of something are almost inevitable, it is politically an easy target for a potential future government with a policy of nationalisation. And its pension deficit helps such a government by making it a less costly target (*), by supporting arguments for no/low compensation...

In short, I think there is quite significant political risk associated with BT, with its pension deficit being a significant factor in that risk. I'm not so worried about that that I'm selling, but I'm not at all unhappy that the size of my holding is about 75% of the average for my HYP. That low capital value and its high yield place it top of my top-up rankings, but for the moment it's on my "no top-ups" list because of that risk.

(*) In the short term - but the real interest (rather than the expressed interest) of any government in the long term seems highly doubtful to me...

Gengulphus

[Arborbridge]

In short, I think there is quite significant political risk associated with BT, with its pension deficit being a significant factor in that risk. I'm not so worried about that that I'm selling, but I'm not at all unhappy that the size of my holding is about 75% of the average for my HYP. That low capital value and its high yield place it top of my top-up rankings, but for the moment it's on my "no top-ups" list because of that risk.


Gengulphus

Well, that's an interesting comment. It seems you and I are in a similar position with BT jumping up and down and waving its hands for a topup, but with us reluctant to do so. I hadn't thought of the pension representing a political risk as well as a financial one, but I can see the argument.

Arb.

[jackdaww]

Arb.

Ian.

As regards BT, I believe plenty of people would try to sway you otherwise, but as TJH once said, - it's really hard to envisage BT collapsing in a heap, despite its well known pension size. I am probably holding off for a while even though it's No2 in my ranking. I just wonder if the dividend will be cut this year, and there are other fish to fry.

Arb.

========

BT may not collapse , its much more likely the dividend will be chopped and/or the SP falling.

[daveh]

BT is sitting at number 5 in my top up list from HYPTUSS, and I'd probably top it up if it made it to number 1 (and hadn't changed in outlook from today). I've held since 04, and its showing a 72% gain including dividends. Share price has gone almost nowhere so almost all the gains are from the dividends it has thrown off. It makes up 2.3% of my HYPish portfolio by capital and 3.7% by yield so not disallowed on either of those criteria. The actual cash income has been growing since 2009 after a big cut (>50% in cash term between 08 and 09).


Political risk wise of the shares I hold, I think BT is a lower worry than the water utilities (PNN and UU.) and energy companies (SSE) for nationalising if we get a Corbyn government

[Dod101]

Ignoring any political risk, BT has such a poor record of 'a sustainable and rising dividend' that I do not hold it and it seems unlikely that I ever will. I have held it in the past but it has such a poor record that I sold out some years back.

A company as has been said does not have to collapse in a heap to be pretty hopeless. Just look at Centrica.

Dod

[Arborbridge]

Ignoring any political risk, BT has such a poor record of 'a sustainable and rising dividend' that I do not hold it and it seems unlikely that I ever will. I have held it in the past but it has such a poor record that I sold out some years back.

A company as has been said does not have to collapse in a heap to be pretty hopeless. Just look at Centrica.

Dod

I'm not disagreeing that the record is poor, but whether it is "such a poor record" readers can judge from the following:-
Dividend compound growth rates: 5yrs 7.16%, 10yrs 9.01%, 15yrs 4.04%
https://www.dividenddata.co.uk/dividend ... ?epic=BT.A

That hides several sins - two cuts - but there was a nine year period of growing the dividend which was a purple patch.

The real question (for me) is whether to be satisfied with this sub-par record or whether it is so poor that I should invest elsewhere and just move on.

I'm a slow tinkerer, and I've already made two unforced sales this year (Morrison and Centrica): I don't feel inclined to make any further major alterations to my HYP at present, so I will probably leave things as they are. Each day, I can think of several shares I might want to sell out, depending on mood, but at that point a nice cuppa is called for.

Arb.

[idpickering]

Each day, I can think of several shares I might want to sell out, depending on mood, but at that point a nice cuppa is called for.

Arb.

I was thinking the same earlier on today, and was going to put that up on the board but was busy elsewhere. I’m not sure any of my shares are perfect HYP shares, but together they form a well diversified portfolio, which allows me not to fret about any supposed weaklings in my HYP. My top up of BT.A this month might not happen. I’ve got until 27 Oct to mull it over.

Ian.