monabri wrote:Merchants' record of 36 years of rising income...well, if they have been overpaying, they're managing to keep all the balls in the air for a long time.
https://www.sharesmagazine.co.uk/news/s ... -milestone
Current yield of 5.6%
In 2000-17, Merchants grew dividends per share at 2.5% pa; it ranked 20th of 24 in my 'Universe of 24' UK income-oriented trusts which have lasted the past two decades. The only lower-ranked members were Shires, Troy, Secs Trust of Scotland and Aberdeen Diversified (formerly British Assets), which all had to rebase payouts because they had overdone them.
Merchants's dps has reduced in real terms (deflated by RPI) in 13 of its last 20 financial years, including the past nine. It uses the money illusion of small but subinflationary rises to preserve an unwarranted 'dividend hero' status.
Funding structural debt may relieve the income account, but the commitment to a juicy headline yield- the highest in the Basket of Eight- constrains it. As a component of the B8, intended for shorter-term holders who want an immediate bang for their buck, Merchants serves its purpose. But not for those contemplating a lengthy retiral-- for them my apothegms of 'Don't chase the yield' and 'Good Enough is better than Even Better' apply.
Lowland, cited above, has been a trust for the long haul. It is in the Basket of Seven. In 2000-17 it ranked sixth in the Universe of 24, growing dividends at 7.8% pa. Hare and tortoise.