DGOC - A gas company

[moorfield]

FWIW I've noticed that DGOC is the 10th largest holding of ABERDEEN STANDARD EQUITY INCOME TRUST PLC (ASEI)
https://www.hl.co.uk/shares/shares-search-results/a/aberdeen-standard-equity-inc-trust-ord-25p

Look at the DGOC hedging portfolio and you could see why people may think it is a reasonably secure dividend.

As I understand having skimmed the last report that consists of swaps, collars, basis swaps, stand alone put and call options, and swaptions - I understand how those products work individually (and how they can go badly wrong) but haven't got my head around the strategy yet. That portfolio is a net liability on the last balance sheet, however its cashflow does look like it comfortably covers the dividend.

An interesting prospect, more research needed.

[johnhemming]

however its cashflow does look like it comfortably covers the dividend.

An interesting prospect, more research needed.

The point about the hedging portfolio is that it goes many years into the future. They tend to hedge the payment of finance (not just interest) when they do a transaction.

[PinkDalek]

Depending on who holds your SIPP, the W-8BEN completion is a relatively simple process as described here:

https://www.youinvest.co.uk/faq/do-you- ... -dividends

That wasn’t well written on my part. What I was intending to say is that the W-8BEN completion (for individuals) is relatively simple but, for SIPPS, they shouldn’t be necessary (as explained further in the link).

[moorfield]

Depending on who holds your SIPP, the W-8BEN completion is a relatively simple process as described here:

https://www.youinvest.co.uk/faq/do-you- ... -dividends

That wasn’t well written on my part. What I was intending to say is that the W-8BEN completion (for individuals) is relatively simple but, for SIPPS, they shouldn’t be necessary (as explained further in the link).

Many thanks PD that's perfectly clear now, I use AJ Bell and should have spotted that!

As for that derivatives portfolio, I'm not too put off. Most HYP companies have such listed on their balance sheets, presumably for hedging of income or expenditure to some extent.

At the yield on offer currently, might DGOC be a hidden HYP gem for the future, I wonder?