Small cap high yielders

[absolutezero]

Given the shortage of decent high yielding shares at the moment I have been exploring some of the smaller caps.

Two have piqued my interest and I feel are worthy of further digging.
M&C Saatchi. SAA
T Clarke. CTO.

Both suspended their dividends earlier this year but if we start excluding those then we end up with the likes of Unilever and National Grid.
Solid but there aren't that many of them any more.

Perhaps it's time to start looking at smaller companies.

Yes. I know. Strict HYP and all that.

Let's not re-hash all those arguments again and again. It gets boring.
If that's you then great. You do you - but for the others who might like to have a look, let's just go with the general idea here.

Any other ideas?
Let's say out of the FTSE 350 and a forward yield of 4%+. Reasonable cover.
No Investment trusts or OEICS, no private equity and no bonds. Just stand alone companies with their own listing. Either main market or AIM.
The kind of thing John Lee (Lord Lee of Trafford) would hold.

[dealtn]

I own CTO. Not for the dividend though.

[absolutezero]

I own CTO. Not for the dividend though.

What's your logic?
The order book looks healthy.

[dealtn]

I own CTO. Not for the dividend though.

What's your logic?
The order book looks healthy.

I bought them in May 2017 at similar levels to today. (FTSE now about 18% lower so that's a relative outperformance).

Despite them being in construction/contracting, and the associated low margin, my initial attraction was the pending outcome of the "fraud" case at the time, which my thoughts were affecting the market's view of the profit, with an unreasonable future P/E not adjusting for this. It was also my view the litigation/insurance (can't remember which) would likely result in reinstatement of loss too. I would need to look at my initial notes to see further thoughts.

Post that event I was persuaded to continue holding due to the order book, and the targeted uplift in margin (from extremely low to low - but better than industry average). The company was demonstrating it was moving to being a stand out niche player in a general construction sector. That increased margin, and growth in turnover was reflected in a share price rising to 120-130p.

I argue it wasn't practical to foresee Covid, nor the market's reaction to it. The general nervousness about Offices as an investment, and the general sector of construction as well as Real Estate has set back the share price.

Part of my feeling is this negative is overplayed (at least long term), although that is maybe the contrarian in me coming out. Mainly though I have got to like and trust management here, and Covid won't change that perception. I am hopeful they will continue doing what they demonstrated, and be better off than competitors.

(Given this Board - at least mainly - is concerned with Income, I should say that in addition to the relative Capital outperformance I have also been "rewarded" with 18% of my initial investment by way of Dividend Income).

[Wizard]

The obvious suggestion I guess is Chesnara. Unlike the FTSE350 my usual source for yield (DividendData.com) is not helpful, where else might one get some clues?

[kempiejon]

The obvious suggestion I guess is Chesnara. Unlike the FTSE350 my usual source for yield (DividendData.com) is not helpful, where else might one get some clues?

Go to the horse https://www.chesnara.co.uk/investor-rel ... roposition good growth of dividend it seems. 7.x% yield I think.

[absolutezero]

I own CTO. Not for the dividend though.

What's your logic?
The order book looks healthy.

I bought them in May 2017 at similar levels to today. (FTSE now about 18% lower so that's a relative outperformance).

Despite them being in construction/contracting, and the associated low margin, my initial attraction was the pending outcome of the "fraud" case at the time, which my thoughts were affecting the market's view of the profit, with an unreasonable future P/E not adjusting for this. It was also my view the litigation/insurance (can't remember which) would likely result in reinstatement of loss too. I would need to look at my initial notes to see further thoughts.

Post that event I was persuaded to continue holding due to the order book, and the targeted uplift in margin (from extremely low to low - but better than industry average). The company was demonstrating it was moving to being a stand out niche player in a general construction sector. That increased margin, and growth in turnover was reflected in a share price rising to 120-130p.

I argue it wasn't practical to foresee Covid, nor the market's reaction to it. The general nervousness about Offices as an investment, and the general sector of construction as well as Real Estate has set back the share price.

Part of my feeling is this negative is overplayed (at least long term), although that is maybe the contrarian in me coming out. Mainly though I have got to like and trust management here, and Covid won't change that perception. I am hopeful they will continue doing what they demonstrated, and be better off than competitors.

(Given this Board - at least mainly - is concerned with Income, I should say that in addition to the relative Capital outperformance I have also been "rewarded" with 18% of my initial investment by way of Dividend Income).

I must admit I have looked at CTO several times and not yet clicked the button to buy. Though I can't give you a reason why not!

[Wizard]

The obvious suggestion I guess is Chesnara. Unlike the FTSE350 my usual source for yield (DividendData.com) is not helpful, where else might one get some clues?

Go to the horse https://www.chesnara.co.uk/investor-rel ... roposition good growth of dividend it seems. 7.x% yield I think.

My question was not where can one find Chesnara’s yield, but the yield of non-FTSE350 share generally.

[monabri]

The obvious suggestion I guess is Chesnara. Unlike the FTSE350 my usual source for yield (DividendData.com) is not helpful, where else might one get some clues?

There needs to be a software tool for rapidly listing out all companies within filtered limits. One tool is SimplyWallStreet. One can build one's own screening filter or go with suggested themes (>100 themes to explore **). It covers many countries.

Good bits
Free (but see below)

Bad bits
One has to register but you don't get pestered by emails
once you have identified a list of companies for further investigation, you can only research 10 per month unless you pay the £85 per yr subscription.
I'm not sure that it is fully up to date and it did lead me astray with purchases of SAGA and Connect Group.


However, it is a source for ideas.






** Themes

Better than Samsung
Potentially undervalued companies
Healthy companies
High return on Equity, low debt
Under $25 High yielders
Low oil price lovers
Top dividend payers
High risk large caps
fashion
I'll drink to that!
Deep value

etc etc etc. (just a sample of the pre built screen tools)

[Itsallaguess]

Any other ideas?

Let's say out of the FTSE 350 and a forward yield of 4%+. Reasonable cover.

No Investment trusts or OEICS, no private equity and no bonds. Just stand alone companies with their own listing. Either main market or AIM.

Not sure if this lot ticks all those boxes, as I couldn't find a way to filter out IT's, but hopefully it's a useful starter for ten that you might then be able to weed out a bit.

The screener site used is linked below, and note that the URL itself includes the following filter settings -

Yield = 4% to 15%
Market Cap = £10M to £300M
Equity Type = ORD's

Source - https://uk.investing.com/stock-screener/?sp=country::4|sector::a|industry::a|equityType::ORD|yield_us::4,15|eq_market_cap::10000000,300000000%3Eeq_market_cap;1

Usual caveats apply - Please use as potential starting point for investigation only. Check, confirm, and verify any and all important figures before using in anger, etc...

Cheers,

Itsallaguess

[absolutezero]

Very useful, that.
Thanks.

[moorfield]

What a buffet you've put out there IAAG. HYPsters must be both salivating and gnashing their teeth knowing they can look but not touch ...!

[Wasron]

Very useful IAAG.

Some very general categorisation in there, so I’d not pay that much attention to it (e.g. Marstons and Card Factory in Services)

Of those I have experience of Headlam might be worth a look at, they sell all types of flooring online and through the retail parks.

Many years ago I held Robinson, they’re a little packaging output (is that really Basic Materials?)

If you have time on your hands you could lose yourself for days researching all these...

[GrahamPlatt]

Robinson’s EPIC is RBN, and forecast yield 3.83%.

[Dod101]

I would ignore whole swathes of them because of the very high yield without even looking at them (and may well miss a few gems on the way) I have held Carr's Group. A nice little company run like a not very ambitious family company. Also Arbuthnot assuming that is Arbuthnot Banking Group. Another nice little company controlled by a Swiss banker, Sir Henry Angest. And of course Chesnara which I still hold There are certainly some decent yielders there.

Thanks IAAG.

[TUK020]

My foray into small cap high yielders was headlined by Marstons.
It has not gone swimmingly.

[absolutezero]

What a buffet you've put out there IAAG. HYPsters must be both salivating and gnashing their teeth knowing they can look but not touch ...!

[Arborbridge]

What a buffet you've put out there IAAG. HYPsters must be both salivating and gnashing their teeth knowing they can look but not touch ...!

Speaking as a HYPer, I don't see the problem: I would buy such a share if I felt like it, but not include it in my HYP calculations and reports on HYPP.

No different from the OEICS or ITs I hold - simple.

Arb

[Dod101]

Anyway the point is has anyone found a decent one or three to look at? What has it got to do with HYPers?

Dod

[Alaric]

Usual caveats apply - Please use as potential starting point for investigation only. Check, confirm, and verify any and all important figures before using in anger, etc...

Is it known what definition of dividend yield has been used? It's often the trailing yield as calculated by taking the declarations covering the last twelve months and dividing by the market price. That's usually useful because of the propensity of Boards of Directors to maintain or increase dividend payouts. For the ITs on the list, it probably still is useful, but for the rest the values quoted are likely to conceal cuts and cancellations announced for future payments.