Single-strategy income-investing vs multi-strategy investing

[Alaric]

I would still like any new shares to yield more than FTSE average so it could still be classed as a HYP.

There are shares with yields below the FTSE average that are strong performers with regards to consistent dividend increases and share price increases to match. If building for deferred income as opposed to current income for immediate consumption, why rule them out?

[SDN123]

When I reach that target income, I might then choose to include lower yielding shares that might not pay the highest yield, but would (hopefully) be less volatile and steady increasers, unlike the Oil, HSBC and GSK shares as examples over the last few years. I would still like any new shares to yield more than FTSE average so it could still be classed as a HYP.

Only a thought as I'm not there yet, but it's something I am thinking about.

Cheers, OLTB.

I have been having similar thoughts, but at that point (reaching my income target) I think I’d bring in Income ITs rather than single “stable” shares. The idea being that a managed collective investment is likely to be more stable than a single share. I’d be sacrificing some income to pay for some management expertise.

That is one* of the motivations for me considering “trialling” an income IT portfolio alongside my current “trial” HYP. Depending on how much I need to stretch for income when I retire I can choose the balance between “pure” HYP and income ITs (and if I end up with serious qualities of capital a gilt/bond portfolio).

* Another motivation for looking at ITs is that my partner is totally disinterested in such things and I feel an IT portfolio would be the easiest for her to manage when I’m gone.

SDN

[AJC5001]

There are shares with yields below the FTSE average that are strong performers with regards to consistent dividend increases and share price increases to match. If building for deferred income as opposed to current income for immediate consumption, why rule them out?

I would love to do exactly that, yet, in spite of previous requests, I have never seen anyone managing to produce a (say) 15 share portfolio holding such shares. The best anyone normally comes up with is Unilever and Diageo. Where are the rest?

Adrian

[richfool]

There are shares with yields below the FTSE average that are strong performers with regards to consistent dividend increases and share price increases to match. If building for deferred income as opposed to current income for immediate consumption, why rule them out?

I would love to do exactly that, yet, in spite of previous requests, I have never seen anyone managing to produce a (say) 15 share portfolio holding such shares. The best anyone normally comes up with is Unilever and Diageo. Where are the rest?

Adrian

I can't think of 15, but what about Compass (CPG) and Reckitt Benckiser (RB.) to add to the list?

[Itsallaguess]

There are shares with yields below the FTSE average that are strong performers with regards to consistent dividend increases and share price increases to match. If building for deferred income as opposed to current income for immediate consumption, why rule them out?

I would love to do exactly that, yet, in spite of previous requests, I have never seen anyone managing to produce a (say) 15 share portfolio holding such shares. The best anyone normally comes up with is Unilever and Diageo.

Where are the rest?

In the interests of transparency, you asked the same question of Alaric back in May of this year, and as far as I'm aware, a portfolio-based answer from Alaric is still not forthcoming -

https://www.lemonfool.co.uk/viewtopic.php?f=31&t=17614&start=120#p222119

You're not the only person to ask, by they way, as I'm aware of the same question being asked by a number of different posters, and I'm also very interested myself to see if Alaric does indeed come up with a wider list of shares to help back up what seems to be a very much repeated claim, which he persistently uses to disparage the portfolio-based HYP approach.

Whilst the HYP approach may have it's faults, it's at least able to perform across a wide number of sectors and shares, which lends itself very well to a portfolio based approach using large-cap companies.

On the face of it, and in the absence of any further evidence, I can only come to the conclusion that it seems to be one of those claims that struggles with the 'theory/reality' interface when trying to view it with portfolio-construction in mind.

I hope Alaric becomes more successful at getting over that particular hurdle in the future...

Cheers,

Itsallaguess

[SalvorHardin]

I would love to do exactly that, yet, in spite of previous requests, I have never seen anyone managing to produce a (say) 15 share portfolio holding such shares. The best anyone normally comes up with is Unilever and Diageo. Where are the rest?

Unfortunately for HYP purists, the best place to look for companies like this is overseas.

America has its "Dividend Aristocrats", companies in the S&P500 which have increased their dividends in each of the last 25 years, many of which have also shown decent share price growth over the last few decades. There are almost 60 of these. Archer Daniels Midland is one, its shares currently yield 3.5% (less withholding tax).

https://en.wikipedia.org/wiki/S%26P_500 ... ristocrats

British only income portfolios will tend to have big holdings in banks insurers, oils and miners. The profits of most banks and insurers are periodicially hammered by a mixture of contagion, incompetence and sociopathic management (thus forcing dividend cuts), whilst oils and miners are weak moat price takers and therefore can't be expected to continually raise their dividends. Tobacco companies have been pretty good at raising dividends, but opinions are strongly divided as to the future prospects of tobacco given the political climate.

[kempiejon]

I can't think of 15, but what about Compass (CPG) and Reckitt Benckiser (RB.) to add to the list?

To add to ULVR, and Diageo I think we'd have to move lower down the list to make the full 15 but I looked at or bought some of this lot. I've not double check if we could get enough sectors but I think one could have a good crack, a decade of dividend growth, some double digit CAGRs

Dunelm DNLM
Spectris SXS,
Diploma DPLM,
Pennon Group PNN,
AG Barr BAG,
Beazley BEZ,
IWG,
HALMA
Johnson Matthey JMAT,
Spirax-Sarco SPX,
Bunzl BNZL
Ashtead Group AHT
Informa INF
DS Smith SMDS
Dominos Pizza DOM
Dechra Pharmaceuticals DPH

[Alaric]

The best anyone normally comes up with is Unilever and Diageo. Where are the rest?

Compass has been one, Rentokil another. Recently SEGRO. Look for stocks with a respectable yield, 2% say and check at what rate the dividend has been increased.

If you regard the alternative to investing as just sitting in cash, 2% and above would qualify as "high" on that measure.

[IanTHughes]

The best anyone normally comes up with is Unilever and Diageo. Where are the rest?

Compass has been one, Rentokil another. Recently SEGRO. Look for stocks with a respectable yield, 2% say and check at what rate the dividend has been increased.

Rentokil Initial PLC (RTO), really?

Between 1998 and 2008 the price dropped from over 450p to less than 50p. Mind you, low yield seekers would have liked the 0.00% offered in 2009 and 2010


Ian

[Alaric]

Rentokil Initial PLC (RTO), really?

Check its performance to date.

10 year total return 15.04%
5 year total return 32.53%



Bland selected it for HYP4 whereupon it promptly tanked. Anyone with the courage to continue holding it or a more recent purchaser would have been well rewarded.

In 2011 when dividends were resumed, the dividend was 1.33p, it's now 4.47p. The result of the calculation where you divide the dividend by the price has never got very high, because price increases have kept pace with dividend increases.