State of play - My HYP

[piccadilly]

Good morning, as mentioned elsewhere, here is my HYP as of now;

Stock                           
           
Admiral Group                                                                           
AstraZeneca                                       
BAE Systems                                    
BP.                                          
BT Group                                      
British American Tobacco                       
British Land                                   
Carillion                                       
Centrica                                     
Diageo                                         
GlaxoSmithKline  
Greene King                              
HSBC                                            
Imperial Brands                                
Legal & General                              
National Grid                                
Provident Finance                           
Rio Tinto                                     
Shell (RDSB)                                    
Royal Mail                                     
SSE                                             
Sainsbury  
Standard Life                                                               
Tate & Lyle                                                               
Taylor Wimpey  
United Utilities                                                          
Unilever                                                                 
Vodafone                                 

 Sector                     Weighting                                                                                     
Oil & gas                    9.6%  
Pharmas                      9.3%
Tobacco                      9.0% 
Utilities                    8.6%
Life Insurance               7.9%
Banks                        5.1% 
Food producers               5.1%
Household goods              4.5%
Aero & defence               4.5%  
Non Life insurance           3.8%
General finance              3.1% 
Fixed tels                   3.5%
Mobile tels                  3.4%
Support                      3.2%
Real estate                  3.1% 
Mining                       3.1% 
Food retail                  3.0%
Travel & Leisure             2.7%
Electricity                  2.3% 
Industrial Transport         2.2%
Beverages                    1.8%

Some might notice the two newbies, Standard Life and Greene KIng. Glad to have them on board. Going forward it's unlikely I'll be bringing any more new holdings on board, just topping up for the next five years maybe. We'll see.

Regards,

Ian.

Moderator Message:
Surplus "%" signs removed as requested.
TJH

Ian,

Good morning,

I am just tidying up my HYP portfolio before publishing.

I notice that you don't have M&S shares - presumably you are concerned at the sustainability of the dividend?

Shares are up today - presumably due to the announcement that Archie Norman is to become chairman.

Also do you have concerns about the BP ongoing dividend?

Regards

Piccadilly

[idpickering]

Good morning,

I am just tidying up my HYP portfolio before publishing.

I notice that you don't have M&S shares - presumably you are concerned at the sustainability of the dividend?

Shares are up today - presumably due to the announcement that Archie Norman is to become chairman.

Also do you have concerns about the BP ongoing dividend?

Regards

Piccadilly

Hi Piccadilly, thanks for your message. With regards to MKS, I'm shy of 'niche' type shares having suffered with Dixons (DSGI) in the past, and prefer the more general exposure to retail that supermarkets offer. I see MKS lowered their divi recently, that would be a red flag to me for a potential purchase. OK SBRY lowered theirs recently too, but as they're in my HYP already, I can live with it. With regards BP., I have no concerns regarding their dividend as they seem to be managing things admirably.

Regards,

Ian.

[piccadilly]

Ian

Thank you for your reply! Comforting words on BP.

I understand your logic on Marks & Spencer - I am showing a small loss at the moment and will switch out if the share price next week holds at today's level.

Regards

[ReformedCharacter]

Ian

Thank you for your reply! Comforting words on BP.

I understand your logic on Marks & Spencer - I am showing a small loss at the moment and will switch out if the share price next week holds at today's level.

Regards

I'm not trying to tell you how to run your portfolio but aren't you making the classic buy high and sell low mistake that private investors are known to make? I have a lot of respect for Ian's contributions and I'm not intending to criticise him but there should be quite a difference between his opinion of a particular sector and a decision to sell a shareholding you already own, incurring a loss and frictional charge. Opinions about M&S vary but I think there were quite a few holders on ye olde Motley Fool HYP board and there may be some here too. I remember my aunt and uncle discussing their shareholding nearly 50 years ago. Unless they screw up badly they'll probably be around for a few more years at least, paying out dividends...

RC

[idpickering]

Ian

Thank you for your reply! Comforting words on BP.

I understand your logic on Marks & Spencer - I am showing a small loss at the moment and will switch out if the share price next week holds at today's level.

Regards

I'm not trying to tell you how to run your portfolio but aren't you making the classic buy high and sell low mistake that private investors are known to make? I have a lot of respect for Ian's contributions and I'm not intending to criticise him but there should be quite a difference between his opinion of a particular sector and a decision to sell a shareholding you already own, incurring a loss and frictional charge. Opinions about M&S vary but I think there were quite a few holders on ye olde Motley Fool HYP board and there may be some here too. I remember my aunt and uncle discussing their shareholding nearly 50 years ago. Unless they screw up badly they'll probably be around for a few more years at least, paying out dividends...

RC

Thank you for your kind comment RC.

For Piccadilly, I must say I do agree with RC, and the general theme of his post. MKS are riding high currently so if I were in your shoes I'd leave them alone. Because they're riding high and are a recent cutter they're not on my shopping list.

Regards,

Ian.

[kempiejon]

Did I miss something have M&S reduced their dividend again? I had a quick hunt but don't see that, I prefer 5 years without a cut, there were cuts in 2008/2010. Anyone offer me a link to a more recent cut? I see digital look forecast less next year mind.

[tjh290633]

Here are the dividends paid since 2009:

11-Jul-09  9.50            
08-Jan-10  5.50            
06-Jul-10  9.50            
14-Jan-11  6.20            
15-Jul-11 10.80            
13-Jan-12  6.20            
13-Jul-12 10.80            
11-Jan-13  6.20            
12-Jul-13 10.80            
10-Jan-14  6.20            
11-Jul-14 10.80            
09-Jan-15  6.40            
10-Jul-15 11.80            
08-Jan-16  6.80            
15-Jul-16 11.90            
15-Jul-16  4.60 Special Div
13-Jan-17  6.80

They were static for a while, but never reduced.

TJH

[idpickering]

My reference to a MKS dividend cut was as a result of viewing the MKS share summary page from digitallook;

http://www.digitallook.com/equity/Marks_Spencer_Group

It can be seen that year ending 02/04/16 they paid 18.7p per share, then for year ending 31/03/17 they paid 17.8p per share apparently.

Regards,

Ian.

[Itsallaguess]

Historical dividend data from the M&S corporate website here -

https://corporate.marksandspencer.com/i ... 7feab77b2c

There doesn't look to have been a recent cut with regards to full-year dividends.

Cheers,

Itsallaguess

[Gengulphus]

My reference to a MKS dividend cut was as a result of viewing the MKS share summary page from digitallook;

http://www.digitallook.com/equity/Marks_Spencer_Group

It can be seen that year ending 02/04/16 they paid 18.7p per share, then for year ending 31/03/17 they paid 17.8p per share apparently.

No - that page says that for the year ending 02/04/16 they paid 18.7p per share, then for the year ending 31/03/17 (*) they are forecast to pay 17.8p per share. They don't announce their final results for the latter until May 24th, and so only the interim dividend for that year is known so far - it's the last one in TJH's table, the 6.8p paid on January 13th.

That implies that the consensus forecast is for the final to be 11.0p, which would be a 7.6% cut from last year's 11.9p. For what it's worth, I rather doubt that any analyst is forecasting that, because companies very rarely produce a deliberate cut (**) that small. It's more likely IMHO that most analysts are forecasting a held final, a minority are forecasting maybe 25-50% cuts to the final, and DigitalLook's process for producing the consensus forecast is averaging that out as a 7.6% reduction.

(*) I think it is actually the year ending 01/04/17 - Marks & Spencer is one of the companies that has 52-week financial years, with the occasional 53-week financial year slipped in to prevent the year end slowly drifting backwards through the calendar, and so its year end 'wobbles' a bit from year to year. As can be seen from the link, DigitalLook enter the actual year end with the results, but understandably just choose a roughly-right date for the forecasts (March 31st in this case) rather than trying to predict the exact date of the year end.

(**) Just to clarify, since "deliberate" isn't quite the right word but I can't offhand think of a better one, I mean that "deliberate cuts" do not include dividend reductions produced by adjustments for share splits, rights issues or significantly long/short financial years, exchange rate movements for dividends declared in a foreign currency, the operation of a formulaic or semi-formulaic dividend policy (such as Sainsbury choosing their dividend making their dividend cover be roughly 2), or similar effects - ones where external events or existing conventions imply a particular size of reduction that the directors would have to deliberately alter.

Gengulphus

[idpickering]

My reference to a MKS dividend cut was as a result of viewing the MKS share summary page from digitallook;

http://www.digitallook.com/equity/Marks_Spencer_Group

It can be seen that year ending 02/04/16 they paid 18.7p per share, then for year ending 31/03/17 they paid 17.8p per share apparently.

No - that page says that for the year ending 02/04/16 they paid 18.7p per share, then for the year ending 31/03/17 (*) they are forecast to pay 17.8p per share. They don't announce their final results for the latter until May 24th, and so only the interim dividend for that year is known so far - it's the last one in TJH's table, the 6.8p paid on January 13th.

That implies that the consensus forecast is for the final to be 11.0p, which would be a 7.6% cut from last year's 11.9p. For what it's worth, I rather doubt that any analyst is forecasting that, because companies very rarely produce a deliberate cut (**) that small. It's more likely IMHO that most analysts are forecasting a held final, a minority are forecasting maybe 25-50% cuts to the final, and DigitalLook's process for producing the consensus forecast is averaging that out as a 7.6% reduction.

(*) I think it is actually the year ending 01/04/17 - Marks & Spencer is one of the companies that has 52-week financial years, with the occasional 53-week financial year slipped in to prevent the year end slowly drifting backwards through the calendar, and so its year end 'wobbles' a bit from year to year. As can be seen from the link, DigitalLook enter the actual year end with the results, but understandably just choose a roughly-right date for the forecasts (March 31st in this case) rather than trying to predict the exact date of the year end.

(**) Just to clarify, since "deliberate" isn't quite the right word but I can't offhand think of a better one, I mean that "deliberate cuts" do not include dividend reductions produced by adjustments for share splits, rights issues or significantly long/short financial years, exchange rate movements for dividends declared in a foreign currency, the operation of a formulaic or semi-formulaic dividend policy (such as Sainsbury choosing their dividend making their dividend cover be roughly 2), or similar effects - ones where external events or existing conventions imply a particular size of reduction that the directors would have to deliberately alter.

Gengulphus

Thanks for your ever welcome input Gengulphus, and your analysis.

Regards,

Ian.

[kempiejon]

Ah, I can see where the confusion arose with Digital Look's probably spurious forecast, my recollections and actual dividends records. Cheers for those that confirmed my thoughts.
I first bought in 2008, then there was trouble, I held on as the company reduced and held the dividend but the 2015/16 increase restored a positive history of 5 years, I added at the end of last year and again last month, the 5% yield being above my portfolio average.

[Hypster]

Hello Ian, I've been pondering about your three recent choices for top-up as mentioned over on the Greene King Trading Update topic. I may be biased given that I recently topped up Greene King but I think it might be a sound choice for your HYP. Assuming the sector weights you posted back in April are still current, then the leisure sector is the most underweight of the three. The yield is good and is covered by earnings. For my mind, the yield of Galiford Try is in the "too good to be true" range. While I've nothing against British Land (except for the thin cover perhaps) I think a top up of Greene King might benefit the portfolio better.



Whatever you decide, I'd be interested to see your State of Play table updated, when you have the time.

[monabri]

Hi Hypster, im sure I'll be corrected if wrong but low div cover is mandatory on BLND as it is a REIT.

[idpickering]

Hello Ian, I've been pondering about your three recent choices for top-up as mentioned over on the Greene King Trading Update topic. I may be biased given that I recently topped up Greene King but I think it might be a sound choice for your HYP. Assuming the sector weights you posted back in April are still current, then the leisure sector is the most underweight of the three. The yield is good and is covered by earnings. For my mind, the yield of Galiford Try is in the "too good to be true" range. While I've nothing against British Land (except for the thin cover perhaps) I think a top up of Greene King might benefit the portfolio better.



Whatever you decide, I'd be interested to see your State of Play table updated, when you have the time.

Hello Hypster, thanks for your post. I do get where you're coming from regarding Greene KIng, It's likely they'll be dumped tomorrow. I get that I'm taking a hit, but I'd rather use that money by buying more reliable HYP picks. I shall certainly put up a new 'state of play', maybe tomorrow, depending how our house viewing goes. We have a lady looking at our bungalow. Hopefully she'll buy it, and then that's less to fret about. Back to Greene KIng though, I bought it originally to sit alongside my Diageo holdings as part of my 'doubling up in sectors' tactic. I get that they're different beasts though of course. I think I made a mistake in picking them, (GNK), up in the first place. A lesson learnt. I agree regarding Galliford. It's hard being only human ain't it?

Ian.

[monabri]

You worry me Ian when you dump shares! The last times you did this was for Carillion and then Provident just before the wheels fell off ! I'm worried about your" spidey sense"!

[Wizard]

Hello Hypster, thanks for your post. I do get where you're coming from regarding Greene KIng, It's likely they'll be dumped tomorrow. I get that I'm taking a hit, but I'd rather use that money by buying more reliable HYP picks. I shall certainly put up a new 'state of play', maybe tomorrow, depending how our house viewing goes. We have a lady looking at our bungalow. Hopefully she'll buy it, and then that's less to fret about. Back to Greene KIng though, I bought it originally to sit alongside my Diageo holdings as part of my 'doubling up in sectors' tactic. I get that they're different beasts though of course. I think I made a mistake in picking them, (GNK), up in the first place. A lesson learnt.

I appreciate that as Monabri says you have form on exiting shares, as I hold I do hope you are wrong this time. You say you want a more reliable HYP share, I presume this is a prediction of trouble at GNK and therefore a future cut as I can't see any issue with the dividend so far. I would be very interested to hear more detail on your thinking.

Terry.

[idpickering]

You worry me Ian when you dump shares! The last times you did this was for Carillion and then Provident just before the wheels fell off ! I'm worried about your" spidey sense"!

Hi chaps, no spidey sense with me I'm afraid. I've just come to the realisation that some shares just aren't worth the risk. I get that HYPing is a buy and hold strategy, and once my HYP is settled, that'll be it. If I do dump Greene King that'll leave me with 27 different holdings covering 18 sectors. I just want a HYP I feel happy to ignore and let it do it's thing. I'm not bothered about any new holdings currently.

Regards,

Ian

[moorfield]

I get that HYPing is a buy and hold strategy, and once my HYP is settled, that'll be it. If I do dump Greene King that'll leave me with 27 different holdings covering 18 sectors. I just want a HYP I feel happy to ignore and let it do it's thing.

Maybe HYPing isn't for you Ian? ( A heretical suggestion I know...)

FWIW I noticed today that GNK doesn't pass my "Sunday Times Top 200" test - although it's market cap according to other sources should put it in that list. Anyway - that's borderline enough for me to discount it.

[idpickering]

I get that HYPing is a buy and hold strategy, and once my HYP is settled, that'll be it. If I do dump Greene King that'll leave me with 27 different holdings covering 18 sectors. I just want a HYP I feel happy to ignore and let it do it's thing.

Maybe HYPing isn't for you Ian? ( A heretical suggestion I know...)

FWIW I noticed today that GNK doesn't pass my "Sunday Times Top 200" test - although it's market cap according to other sources should put it in that list. Anyway - that's borderline enough for me to discount it.

Hi moorfield, thanks for your post. HYPing is most certainly for me. Even more so now that I've stopped working and the income will come in handy.

Ian.