What to do with SSE and upcoming dividend rebase?
Posted: July 3rd, 2023, 8:11 am
After Dod asked for more investment treads.......
I hold some SSE shares which were doing OK, capital has risen and I have collected dividends along the journey together. Now all ISA wrapped.
Unfortunately things are going to change. The dividend is being rebased, from memory it's 90 odd pence and will drop to 60p with 5% rises in 2024 and 2025.
Its likely to be just over 3.25% yield if buying today. So what should I do?
Option 1 is nothing. Just keep collecting the lower dividends and wait for an increase in both the divi and hopefully the share price if the company gets stronger.
Option 2 is sell. The share price is likely to fall with the divi etc.
Option 3 is sell some. I have them split in two brokers so could sell one brokers worth. Either the bigger or smaller portion.
I can't think of option 4 but I'm open to suggestions.
Next if I sell what to do with the cash.
Option 1 is to hold it in the broker pending finding an alternative investment. One broker will give a low rate of interest whilst I wait. The other nothing. This will offset a bit of the lost dividend.
Option 2 withdraw the cash and stick it in a high interest account. Rates have been rising and a taxed account won't be an issue currently. This would provide more in interest than lost in the rebased dividend.
Option 3 spend it car, holiday, wine women and song. Unlikely the dividends were going to provide me with that so unless I get notification of 6m to live....
Option 4 Reinvest it but in what?
So musing on reinvesting. I hold UKW and Trig so could top them up and probably get a higher dividend return but possibly less capital return. I could find an investment trust. It's something I've considered in making it easier for those I leave behind when that 6m notice finally comes through.
Slowly move all individual shares into IT's as I get older so I don't have to be as involved as I get older and it might make things simpler for my spouse. I could pick a range of ITs that are fire and forget possibly.
Over to wise heads to make me ponder and discuss something financial
I hold some SSE shares which were doing OK, capital has risen and I have collected dividends along the journey together. Now all ISA wrapped.
Unfortunately things are going to change. The dividend is being rebased, from memory it's 90 odd pence and will drop to 60p with 5% rises in 2024 and 2025.
Its likely to be just over 3.25% yield if buying today. So what should I do?
Option 1 is nothing. Just keep collecting the lower dividends and wait for an increase in both the divi and hopefully the share price if the company gets stronger.
Option 2 is sell. The share price is likely to fall with the divi etc.
Option 3 is sell some. I have them split in two brokers so could sell one brokers worth. Either the bigger or smaller portion.
I can't think of option 4 but I'm open to suggestions.
Next if I sell what to do with the cash.
Option 1 is to hold it in the broker pending finding an alternative investment. One broker will give a low rate of interest whilst I wait. The other nothing. This will offset a bit of the lost dividend.
Option 2 withdraw the cash and stick it in a high interest account. Rates have been rising and a taxed account won't be an issue currently. This would provide more in interest than lost in the rebased dividend.
Option 3 spend it car, holiday, wine women and song. Unlikely the dividends were going to provide me with that so unless I get notification of 6m to live....
Option 4 Reinvest it but in what?
So musing on reinvesting. I hold UKW and Trig so could top them up and probably get a higher dividend return but possibly less capital return. I could find an investment trust. It's something I've considered in making it easier for those I leave behind when that 6m notice finally comes through.
Slowly move all individual shares into IT's as I get older so I don't have to be as involved as I get older and it might make things simpler for my spouse. I could pick a range of ITs that are fire and forget possibly.
Over to wise heads to make me ponder and discuss something financial