PHP - new holding

[Arborbridge]

Over on HYPP I announced that I had put a buy order on for shares in PHP for my HYP.

Today, I'm rethinking, over the whole idea. Is there really a sustainable argument for me to buy a single company share in a niche sector yielding 4%-ish, when I could buy a similar or higher yield in a multi-share IT?

I can't even argue that the dividend growth rate would be an advantage as it's been a lacklustre 3.1% over 5 years and 2.89% over 10 years according to dividend data.

So what's the alternative? (apart from sitting tight for a while). I'm constrained by the ITs which happen to be in the same broker account, but there are choices all with higher yields: HFEL, JETI, JEMI, LWDB, HINT. That's excluding the holdings on the naughty step of PLI and TMPL.

Still pickering about whether to start a new share holding, or just use the cash in topups.

Opinions sought and will be given a good home

Arb.

[Dod101]

So does this mean Arb that you have withdrawn your order for buying PHP? Are you not confusing yield with dividend in quoting the numbers you have? Using the same argument why do you hold any individual shares; why not just convert them all to ITs?

PHP is a share that has grown its dividend consistently over the last several years, even through the Covid pandemic and it continues to do so. A much better income share than say Shell for instance!

Dod

[idpickering]

I feel your pain Arb. I was Pickering a lot about me maybe buying into Tritax Big Box, Moneysupermarket.com and Tesco over this weekend, when I'm already well diversified in my HYP anyway? As for PHP, I hold as you know, and am still going to top up my PHP holdings. I think PHP are a great share, with almost certainty of their rents being paid too.The others, I'll Pickering over them some more. Either way, I won't be doing anything regarding them until October and thereafter.

Ian.

[Alaric]

Today, I'm rethinking, over the whole idea. Is there really a sustainable argument for me to buy a single company share in a niche sector yielding 4%-ish, when I could buy a similar or higher yield in a multi-share IT?

In current circumstances, the yield on an IT might be unsupported by dividends, in other words enhanced by distributions of past reserves. If the income is needed for drawing down, not necessarily a bad thing.

[Arborbridge]

So does this mean Arb that you have withdrawn your order for buying PHP? Are you not confusing yield with dividend in quoting the numbers you have? Using the same argument why do you hold any individual shares; why not just convert them all to ITs?

PHP is a share that has grown its dividend consistently over the last several years, even through the Covid pandemic and it continues to do so. A much better income share than say Shell for instance!

Dod

I haven't withdrawn the buy order - I have until Wednesday night to make up my mind. If I do nothing, the buy will go ahead on Thursday.
I've mentioned both yield and dividend growth. The yield on ITs is potentially hgher, and the dividend growth also higher. If the dividenddata site is correct, PHP's dividend growth is as I quoted, and lower than several of the ITs I mentioned.

Using the same argument why do you hold any individual shares; why not just convert them all to ITs?

Yes, that's true, and it's a point I have made along with other posters. The only counter-argument would be if my HYP income was growing faster than my IT basket income over the long term. There is considerable doubt about that in my case - even pre-Covid. Maybe you don't keep detailed records of income per unit for your shares and ITs, but because I keep them separate, I can compare.
Here's a chart showing the point well. Even before the disastrous drop of due to Covid, one can see that the IT income is firmly moving away from the HYP income per unit. There seems, at present, little hope that the HYP will stage a "catch up" - but I'm willing to be patient and keep the HYP experiment running indefinitely -until I'm too old to manage it, most likely.



Arb.

[Arborbridge]

Today, I'm rethinking, over the whole idea. Is there really a sustainable argument for me to buy a single company share in a niche sector yielding 4%-ish, when I could buy a similar or higher yield in a multi-share IT?

In current circumstances, the yield on an IT might be unsupported by dividends, in other words enhanced by distributions of past reserves. If the income is needed for drawing down, not necessarily a bad thing.

I appreciate that and it does through more into the mix to think about! Will the reserves expire before dividends return to full strength? Will PHP's dividends be more robust than the alternative? It's a gamble either way.

Arb.

[Itsallaguess]

Here's a chart [income per unit] showing the point well.

Even before the disastrous drop off due to Covid, one can see that the IT income is firmly moving away from the HYP income per unit.

There seems, at present, little hope that the HYP will stage a "catch up" - but I'm willing to be patient and keep the HYP experiment running indefinitely - until I'm too old to manage it, most likely.

That's a very illustrative chart Arb...

Given the lengthy period of time covered by it, however, I've got to say that I'm very surprised that you've not drawn much stronger and more actionable conclusions from it..

Cheers,

Itsallaguess

[Arborbridge]

That's a very illustrative chart Arb...

Given the lengthy period of time covered by it, however, I've got to say that I'm very surprised that you've not drawn much stronger and more actionable conclusions from it..

Cheers,

Itsallaguess

Ah! Inertia, hope over adversity and wanting to run the experiment as fairly and for as long as possible. Until recently (pre-Covid) I could claim that HYP does what it says on the tin, but that doesn't mean to say it is better than the IT basket. The saving grace for my HYP has been the fact that the yield has been higher - though at present that is no longer true.

In fact there has been a gradual change over the years. At one time my HYP was over twice the size of ARBIT - but I've progressively changed that mix so the HYP is now only 1.4x the ITs.

Arb.

[MDW1954]

So what did you actually do?

MDW1954

[Arborbridge]

So what did you actually do?

MDW1954

The buy on PHP went through yesterday - described on HYPP, which you've probably seen by now

[shetland]

I sold PHP a few months ago at 158p. It was a 45% premium to net asset value and I couldn't the share price going anywhere but down. Too much risk with that level of premium.

[Dod101]

I sold PHP a few months ago at 158p. It was a 45% premium to net asset value and I couldn't the share price going anywhere but down. Too much risk with that level of premium.

I would not necessarily buy at these levels but I see no reason to sell if I am happy with the yield. Asset values do not mean a lot given that they are invested in dedicated health centres. I have held them for around 8 years I think and add to them from time to time. There are not many shares around with as an assured income stream as these.

Dod

[monabri]

PHP..at 3.8% yield is more than acceptable (for me) in these days of low bank rates.

Here's the shareprice over the last 20 years...it might be confusing to some as it slopes upwards from left to right .




It is a considered choice. It isn't "high yield" but is it high yield enough and "look at the Capital".

Here's the dividends

https://www.dividenddata.co.uk/dividend ... y?epic=PHP

( note 4 for 1 share split in 2015).

The issue I find with PHP is that if/when I have available funds for a top up , there always seems to be something shinier. Often, the shinier thing turns out to be a crock of .....

[shetland]

The question is what is likely to happen to the share price in the future. The vast majority of the share price increase is accounted for by the increase in premium, not by the NAV. It all depends upon how comfortable individuals feel with owning assets which are priced at 40 - 50% more than their asset value with all the risk that entails.

[Arborbridge]

I sold PHP a few months ago at 158p. It was a 45% premium to net asset value and I couldn't the share price going anywhere but down. Too much risk with that level of premium.

I would not necessarily buy at these levels but I see no reason to sell if I am happy with the yield. Asset values do not mean a lot given that they are invested in dedicated health centres. I have held them for around 8 years I think and add to them from time to time. There are not many shares around with as an assured income stream as these.

Dod

An interesting piece of philosophy. If one was magically gifted PHP now there would be no problem in continuing to own it, let's say - or indeed if we already owned it, the same. So, I woke up one day last week and found I had it in my portfolio instead of some cash: I'm happy to can on holding it.

Arb.