Of these seven are probably excluded owing to being near the soft limit of 5% for income provided.
This leaves six shares: TSCO, RDSB, BP, UU, SBRY, PSON
Tsco is rather low on yield - and I notice the recent results have poor cash flow. (Why?)
UU is acceptable but for the cash flow: according to morningstar numbers, the dividend has remained uncovered by cash in each of the past seven years. How long can that last?
RDSB, BP, SBRY are all recent cutters. One might speculate that SBRY might well return to paying soon and cash flow is reasonably good - although we cannot say at what rate dividends will commence
That leaves PSON which has a similar yield to Tesco. If the yield on offer is less than 3.68% i.e. 90% of my average, I would normally veto - that applies to both of these, although Tesco is on the threshold. With such a low yield, one might argue that it's best to sit on the cash or re-deploy to a different portfolio. In my view, topping up my HYP makes sense when the available yield is higher than my IT basket, but less so if the choice is equal or less.
At present I'm not particularly enthusiastic about any of these options, but I have the weekend to think about it - cheap dealing day is Monday. Any input from posters would be taken into consideration.
For further interest, here is my sector breakdown:-
Financial Services | 12.61 %
Pharmaceuticals & Biotechnology | 9.44 %
Life Insurance | 8.53 %
Food Producers | 8.06 %
Gas, Water & Multiutilities | 6.86 %
Household Goods & Home Construction | 5.58 %
Nonlife Insurance | 4.84 %
Tobacco | 4.36 %
Mining | 3.85 %
Oil & Gas Producers | 3.82 %
Media | 3.81 %
Beverages | 3.73 %
Banks | 3.62 %
Equity Investment Instruments | 3.51 %
Multiutilities | 3.38 %
Food & Drug Retailers | 3.19 %
Electricity | 3.17 %
General Industrials | 2.96 %
Mobile Telecommunications | 2.75 %
Retail REITs | 1.95 %
|
Total | 100 %
Arb.