TMF item regarding two HYP faves

[idpickering]

This item from TMF discusses Lloyds and British American Tobacco, both of which I hold in my HYP. Despite the authors write-up, I've no intenteion of selling my holdings in these pair;

Lloyds Banking Group plc isn’t the only FTSE 100 stock I’d sell today

While Lloyds Banking Group’s (LSE: LLOY) latest trading statement may have surpassed all broker expectations, the worrying state of the British economy would still encourage me to sell out of the bank straight away.

In a bright third-quarter update in late October, it declared that pre-tax profit surged 141% between July and September, to £1.95bn. This was thanks in no small part to the Black Horse bank avoiding additional provisions related to the PPI mis-selling scandal.

Too much risk

While impressive at face value, these brilliant numbers do not disguise the reality that Lloyds faces immense obstacles to keep profits growing.

http://www.fool.co.uk/investing/2017/11 ... ell-today/

What are other holders thoughts on this item, and their intentions regarding these two shares? As HYPers I get that we're unlikely to be selling out, but your thoughts would be of interest nonetheless.

Ian.

[monabri]

From the analysis on Simply Wall St, Lloyd's is in good shape ("excellent balance sheet") with an increasing Divi next year.

Soon, (2019) we will say goodbye to PPI payments....(about time too!)

Digital Look indicates an increasing cover and yield and a beta of 0.63

No visible shorting.

(Don't know if Noel Edmunds will be successful sueing them but that will be noise. )


I hold Lloyds and a small % in BATS ( bought a few months ago after the fall when nicotine reduction plans were announced in the US...one day after they completed on Reynold at the end of July).

[moorfield]

Lloyds junked it's dividend for 6 of the last 10 years, and along with BATs is a low-yielder below the FTSE 100. Why would a newbie HYPster want to pick either of these currently?

[CryptoPlankton]

Lloyds junked it's dividend for 6 of the last 10 years, and along with BATs is a low-yielder below the FTSE 100. Why would a newbie HYPster want to pick either of these currently?

Presumably a rhetorical question, but how does it relate to the OP?

[moorfield]

Presumably a rhetorical question, but how does it relate to the OP?

As HYPers I get that we're unlikely to be selling out, but your thoughts would be of interest nonetheless.

In reply to Ian's description as "HYP faves", I am pointing out one is a divi cutter, which arguably holders should have sold in 2009, and both are now low yielders, which presumably are of no interest to new starters today.

[DiamondEcho]

What are other holders thoughts on this item

I don't read any articles from TMF staff writers, it's just not worth the time. Most such articles are simply advertorials that lead in towards subscription services. Note how that article ends:

'But I believe there are much stronger income picks out there, starting with the shares revealed in The Motley Fool's free and exclusive 5 Dividend Winners To Retire On wealth report.... Click here to download the report. It's 100% free and comes with no further obligation, so why not check it out today?'

So you might imagine that the negative views given are simply a lead-on. And why would a 'free' lead-on need to be 'no obligation'? More to the point what qualifies the writer to write about his subject - he doesn't say? There is plenty of quality analysis out there, from people qualified to write it, so why bother with the chaff?

[idpickering]

Thanks for the replies guys. I do get that newbie HYPers may not pick either of these two, but those of us that have been around here (and the other place) are well versed in the stock's history. Lloyds have been fickle on the dividend front this is true. British American Tobacco are not that high yielding, but a forward yield of 4.1% as defined by digitallook ain't all that bad. They're well off their 52 week high currently, at 4983p, with the high being 5643p, so now may be a good time to buy. I am a holder myself for those that don't know. I hold Lloyd alongside HSBC, and BATS alongside Imperial Brands, in order to diversify between them in their respective sectors.

Ian.

[tjh290633]

Lloyds junked it's dividend for 6 of the last 10 years, and along with BATs is a low-yielder below the FTSE 100. Why would a newbie HYPster want to pick either of these currently?

LLOY has been back in the dividend lists since May 2015, with its 2014 final. Previously it paid a scrip dividend in May 2009, which was only 8 years ago, so 6 of the last 8 years were when it failed to pay a dividend. Having redeemed itself the yield is now 4.85%. No longer a low-yield share.

BATS at 3.5% is a little below the market average, but market gyrations could bring it back in range.

TJH

[idpickering]

What are other holders thoughts on this item

I don't read any articles from TMF staff writers, it's just not worth the time. Most such articles are simply advertorials that lead in towards subscription services. Note how that article ends:

'But I believe there are much stronger income picks out there, starting with the shares revealed in The Motley Fool's free and exclusive 5 Dividend Winners To Retire On wealth report.... Click here to download the report. It's 100% free and comes with no further obligation, so why not check it out today?'

So you might imagine that the negative views given are simply a lead-on. And why would a 'free' lead-on need to be 'no obligation'? More to the point what qualifies the writer to write about his subject - he doesn't say? There is plenty of quality analysis out there, from people qualified to write it, so why bother with the chaff?

Fair point DiamondEcho, and I respect your putting it up. For me, TMF have taught me loads over the years, and for that I respect the writers' opinion, even if I may not agree with some of them. But this thread is not about that subject, so let's leave it there.

Ian.

[monabri]

The "5 shares to retire on" were (when I downloaded it in May 17) Unilever,NG,GSK,RB and DGE.

ULVR,RB and DGE wouldn't be top picks for a newbie HYPer as their yields are well below even the FTSE100 average (RB is really off the boil at the moment).

This leaves NG and GSK.

There's been concern over GSK recently in terms of it's dividend security never mind increases in dividend going forward and, of course, National Grid is soon to be "Renational(ised) Grid"(tongue in cheek mode).

[DiamondEcho]

Fair point DiamondEcho, and I respect your putting it up. For me, TMF have taught me loads over the years, and for that I respect the writers' opinion, even if I may not agree with some of them.

You're quoting a source, TMF, and casting for views on their opinions. My opinion is that compared to how they begun say 20 years ago, as a rare non-conformist voice usually worth reading, now they're simply a channel for $elf-promoting advertorials. TMF back then really helped break the x-funded circle-jerk DIY investors faced, yet now they are a part of that circle, it being the only way they can fund themselves.
So they were good, including with the likes of their original HYP which really was quite a novel thing, not as an original concept, but in taking it to an early DIY home-internet audience. But none of those writers nor original thinking remains today.

[CryptoPlankton]

Presumably a rhetorical question, but how does it relate to the OP?

As HYPers I get that we're unlikely to be selling out, but your thoughts would be of interest nonetheless.

In reply to Ian's description as "HYP faves", I am pointing out one is a divi cutter, which arguably holders should have sold in 2009, and both are now low yielders, which presumably are of no interest to new starters today.

Fair enough - it just seemed odd as his question was about holders' thoughts.

FWIW, for better or worse, I held on to Lloyds through the "bad times" (actually adding with the rights issues) and have no intention of selling now or likely in the future. With the benefit of hindsight, selling may have been the better option back then, but it hasn't been a major issue in the context of the whole portfolio and the holding is currently pulling its weight satisfactorily. Having held on before, a bit of negative speculation in the face of positive news certainly isn't going to move me now!

(My general view is that reasons pop up all the time to think about selling different holdings, but acting on them all would involve a ridiculous amount of portfolio churn. That's not to say I won't bail out of something if I think the prospects really merit it.)

[idpickering]

Fair point DiamondEcho, and I respect your putting it up. For me, TMF have taught me loads over the years, and for that I respect the writers' opinion, even if I may not agree with some of them.

You're quoting a source, TMF, and casting for views on their opinions. My opinion is that compared to how they begun say 20 years ago, as a rare non-conformist voice usually worth reading, now they're simply a channel for $elf-promoting advertorials. TMF back then really helped break the x-funded circle-jerk DIY investors faced, yet now they are a part of that circle, it being the only way they can fund themselves.
So they were good, including with the likes of their original HYP which really was quite a novel thing, not as an original concept, but in taking it to an early DIY home-internet audience. But none of those writers nor original thinking remains today.

I do get where you're coming from, and please don't feel that I was dismissing your comment off hand. I do tend to agree with the gist of your post above, but still find some of their offerings informative. You just have to ignore the sales pitch.

Ian.