Alaric wrote:IanTHughes wrote:What are you saying now, HYP should avoid outperformers?
It already does, by the historic and current refusal to consider shares such as Unilever, Compass etc. suitable.
Which you now agree is the correct policy?
Ian
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Alaric wrote:IanTHughes wrote:What are you saying now, HYP should avoid outperformers?
It already does, by the historic and current refusal to consider shares such as Unilever, Compass etc. suitable.
IanTHughes wrote:Which you now agree is the correct policy?
Alaric wrote:IanTHughes wrote:What are you saying now, HYP should avoid outperformers?
It already does, by the historic and current refusal to consider shares such as Unilever, Compass etc. suitable.
Alaric wrote:IanTHughes wrote:As I have mentioned before, if I believed the dividend would be cut, I would not add such a share to my HYP.
In the case of Vodafone, your beliefs were out of line with market expectations and for that matter the comments on these boards. What would convince you that a dividend cut was likely?
Alaric wrote:...the historic and current refusal to consider shares such as Unilever, Compass etc. suitable.
PinkDalek wrote:This is old ground and some have both considered and bought Unilever in their High Yield Portfolio (when the time was apparently right).
Alaric wrote:PinkDalek wrote:This is old ground and some have both considered and bought Unilever in their High Yield Portfolio (when the time was apparently right).
General reasoning may suggest that a stock with an expectation of dividend increases or at least dividend increases above the market norm is likely to see its market price go to a premium, with the effect that its initial dividend yield drops below the market norm. I would suggest that for someone building a portfolio of income producing shares to retire on in say twenty years time, that shares with a low initial yield but considerable growth are completely suitable and if the combined income and growth is higher, are more suitable than those with an initial high but subsequently level or decreasing dividend.
Alaric wrote:PinkDalek wrote:This is old ground and some have both considered and bought Unilever in their High Yield Portfolio (when the time was apparently right).
That created a major row on the "Practical" board about whether "low" yielders such as Unilever could even be discussed. ...
PinkDalek wrote: You appear to have misremembered the outcome or are choosing to ignore it.
IanTHughes wrote:Of course! But, what about an initial High Yield with subsequent Dividend Growth, at or above the market norm?. That must surely be the best solution of all!
Alaric wrote:IanTHughes wrote:Of course! But, what about an initial High Yield with subsequent Dividend Growth, at or above the market norm?. That must surely be the best solution of all!
Can you find any though?
IanTHughes wrote:With that much detail? Nope. I cannot see into the future and neither, might I add, can you!
Alaric wrote:General reasoning may suggest that a stock with an expectation of dividend increases or at least dividend increases above the market norm is likely to see its market price go to a premium, with the effect that its initial dividend yield drops below the market norm. I would suggest that for someone building a portfolio of income producing shares to retire on in say twenty years time, that shares with a low initial yield but considerable growth are completely suitable and if the combined income and growth is higher, are more suitable than those with an initial high but subsequently level or decreasing dividend.
AJC5001 wrote:Alaric wrote:General reasoning may suggest that a stock with an expectation of dividend increases or at least dividend increases above the market norm is likely to see its market price go to a premium, with the effect that its initial dividend yield drops below the market norm. I would suggest that for someone building a portfolio of income producing shares to retire on in say twenty years time, that shares with a low initial yield but considerable growth are completely suitable and if the combined income and growth is higher, are more suitable than those with an initial high but subsequently level or decreasing dividend.
I look forward to your posting your suggested portfolio for such a strategy - perhaps 15 shares? From different sectors to provide diversity? Feel free to suggest any other factors you consider relevant - number of years dividend growth, perhaps, or something about debt or cashflow.
I've always wanted to see what such a portfolio would contain.
Alaric wrote:IanTHughes wrote:With that much detail? Nope. I cannot see into the future and neither, might I add, can you!
A bit pointless asserting it as a viable strategy then.
Alaric wrote:Potential lower yielding shares with high dividend growth rates are easier to identify. Rather than sort by initial yield, sort by the sum of initial yield and dividend growth rate.
Alaric wrote:Dividend growth rate is historical
IanTHughes wrote: The dividend growth rate that your new holding will enjoy has not yet commenced.
Alaric wrote:IanTHughes wrote: The dividend growth rate that your new holding will enjoy has not yet commenced.
Neither has the dividend used in the dividend yield calculation been paid.
The raw material on dividends can be found at
https://www.dividenddata.co.uk/dividend ... et=ftse100
and the rates of dividend increase at
https://www.dividenddata.co.uk/ftse-div ... et=ftse100
It's been a bumper five and ten years as regards dividend increases for much of the FTSE 100.
It's ordered by market capitalisation.
Number 4 on the list is Royal Dutch Shell B with a dividend yield of 5.79% and a dividend growth rate over 5 years of 0.65%. Combined then it's 6.47. Number 5 on the list is Diageo with a dividend yield of 2.00% and thus a HYP reject. The growth rate on the other hand is 6.30% , so combined is 8.30 .
Lower down there's a Company called Ashtead Group which at a yield of 1.67% would be ignored in any HYP discussion. The dividend growth rate has been 32.7% over 5 years. It might be too late for new investors as the share price has almost tripled over five years.
IanTHughes wrote:I also seek out shares where I believe there is potential for dividend growth. It therefore follows that a 7% yield with potential for dividend growth is vastly superior - income-wise at least - to a 3% yield with a potential for dividend growth. Or would you disagree?
Ian
Alaric wrote:IanTHughes wrote: The dividend growth rate that your new holding will enjoy has not yet commenced.
Neither has the dividend used in the dividend yield calculation been paid.
The raw material on dividends can be found at
https://www.dividenddata.co.uk/dividend ... et=ftse100
and the rates of dividend increase at
https://www.dividenddata.co.uk/ftse-div ... et=ftse100
It's been a bumper five and ten years as regards dividend increases for much of the FTSE 100.
It's ordered by market capitalisation.
Number 4 on the list is Royal Dutch Shell B with a dividend yield of 5.79% and a dividend growth rate over 5 years of 0.65%. Combined then it's 6.47. Number 5 on the list is Diageo with a dividend yield of 2.00% and thus a HYP reject. The growth rate on the other hand is 6.30% , so combined is 8.30 .
Lower down there's a Company called Ashtead Group which at a yield of 1.67% would be ignored in any HYP discussion. The dividend growth rate has been 32.7% over 5 years. It might be too late for new investors as the share price has almost tripled over five years.
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