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Raptor's HYP end of financial Year.

Practical discussions about equity High-Yield Portfolios (HYP) for income
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Raptor
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Raptor's HYP end of financial Year.

#42664

Postby Raptor » March 31st, 2017, 3:49 pm

Last dividend arrived from BP today so thought it would be a good idea to look at the portfolio for this last financial year (ok few more days to go but should not make that much difference).

Last years on TMF



Dividends. Per unit is 0.45, last year was considerably higher but as I have had a lot of movement after integrating an inherited portfolio not surprising (still working on this). More relevant is during same period my IT's have returned 0.44 per unit.
The Yield on the year was 5.61% (last year was 5.78%, not same as declared last year as I noticed an error in my formula's). IT's 5.95%. Looking forward estimated yield 5.63% (this has no meaning as will be "selling off" some shares to pay for building project, which has just got bigger as the "deck" has had to come up to get the dumper and "pneumatic drill" in place as it was unsafe....)

Unit price at beginning was 8.06, now 8.61, long way to go to get back to the 10 it started at but moving in the right direction.

My actual income from dividends has increased 56.5% mainly due to the additional shares brought in by my SIPP and inherited portfolio.

What has happened in the year. Last year I had 4 shares giving over 10% of my income. Now down to 2, TW and CLLN. Portfolio has gone from 26 to 25, have sold Stobart (STOB) and SEGRO (SGRO). Also most of Tesco (TSCO) just keeping my Bonus shares that are with Equinti. ICAP (IAP) has become TP ICAP (TCAP) and Nex Group (NEX), not sure where I will go with these as minnows in the big picture now. Have purchased more, MKS, HSBA, SL and LLOY.

My top-up rules have changed a bit since last year. Still no top-up if over 10% of income. Sector limit still 10%. The Forecast yield of FTSE all shares is now 3.46% (was 3.87% last time), the P/E is now 30.48 (was 25.47). Also have changed "current value" to be 2 times median with a close look at 1.5% (last time was % of total value times 1.5, then 5.77%, which strangely enough would have had the same result). No cuts in last 5 years (but not a hard rule). Ideally would like cover to be above 1.5. Below is what is left:-



Last year bypassed IGG when looking for a top-up candidate as was not sure what the FCA changes would do for them. Not sure why the cover for BP has not gone up, would need to look closer. Still not happy with PSON's "vision".

Next year should be fun. Still drawing down some of the income (trading account) but after "sell-off" will look at the dividend income coming in and possibly "bed & isa" or sell off and buy into ISA. All SIPP dividend income will now go into the IT's.

Will see how things go as we go through the year.

Raptor.

vrdiver
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Re: Raptor's HYP end of financial Year.

#43027

Postby vrdiver » April 2nd, 2017, 10:54 am

Raptor wrote:have sold Stobart (STOB)
Raptor.



Thanks for the review. As I topped up Stobart last year, I'd be interested in your reasons for selling!

My top up rational was that
a) they were underweighted in my portfolio
b) they had just declared doubling of the dividend with the switch from semi-annual to quarterly dividends
c) their yield was good and seemed sustainable
d) the share price had not reacted to the increased dividend, as I think the market has their sector out of favour?

Of course, my views may prove unfounded!

VRD

Raptor
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Re: Raptor's HYP end of financial Year.

#43067

Postby Raptor » April 2nd, 2017, 12:44 pm

vrdiver wrote:
Raptor wrote:have sold Stobart (STOB)
Raptor.



Thanks for the review. As I topped up Stobart last year, I'd be interested in your reasons for selling!

My top up rational was that
a) they were underweighted in my portfolio
b) they had just declared doubling of the dividend with the switch from semi-annual to quarterly dividends
c) their yield was good and seemed sustainable
d) the share price had not reacted to the increased dividend, as I think the market has their sector out of favour?

Of course, my views may prove unfounded!

VRD


Unfortunately I got rid of them before they announced the dividend switch and doubling. They had not changed the divi since I first brought them in 2010 and there were a lot better dividend yields on offer. I know LTBH but at the time I was looking to reduce my holdings and re-balance the portfolio. Seemed like a good idea, at the time.....

Raptor.

monabri
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Re: Raptor's HYP end of financial Year.

#43078

Postby monabri » April 2nd, 2017, 1:14 pm

Sobart - P/E is rather high and the dividend cover is less than 1 (DigitalLook reports div cover of 0.8 reducing to 0.5 and a P/E of 35 and increasing next year).

Surely there are safer places to invest?

vrdiver
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Re: Raptor's HYP end of financial Year.

#43161

Postby vrdiver » April 2nd, 2017, 8:03 pm

monabri wrote:Sobart - P/E is rather high and the dividend cover is less than 1 (DigitalLook reports div cover of 0.8 reducing to 0.5 and a P/E of 35 and increasing next year).

Surely there are safer places to invest?


Very probably, yes. The problem with "safer" places is that they're safe right up until they're not (see Tesco for example). I liked Stobart and bought in February 2011, and then enjoyed 5 years of utter tosh, performance wise, in similar vein to Raptor, nursing a capital loss, but at least the (static) divi kept rolling in. The shares are starting to be re-rated now, as the board's transformation project bears fruit. To be honest, they seem to be pretty fluid about "strategy", but here's a recent commentary: http://www.iii.co.uk/articles/398435/st ... nd-6-yield

Would I buy them at today's price (£2.07)? The yield is still good, but the fundamentals (cover), without the transformation story, would rule them out. It all depends on whether you think they will deliver. Luckily, capital "doesn't matter", so the bumpy ride they've provided so far is irrelevant, but I'd certainly understand HYPers looking for something a little less racy!

VRD


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