Moderator Message:
Moved from HYP-P to Share Ideas as this is simply not a high yield share. - Chris
Moved from HYP-P to Share Ideas as this is simply not a high yield share. - Chris
Hello all. With the average yield of my buys this year running north of 7% here's something a bit different. JMAT is a chemicals company with some interesting specialities. FTSE100, market cap £5 and a half billion. Yield around 3% at the moment, not for the first time recently but something that happens rarely and that never goes much higher. Divi covered 2.5X and rising at 3% p/a for ages.
Yes it yields way less than the FTSE average and yes there may be better HYP buys out there - but in the context of my HYP actually not that many; I'm fully stocked in tobacco, Big Oil, Financials etc and don't like looking too far outside the FTSE100 for my buys. With cash ready to reinvest I just added it to my portfolio as its first new share for 2 years and first new sector for 4.
It's pretty much the only HYP candidate in its sector, which helps justify its addition to my portfolio on diversification grounds. Its the kind of company I'm happy to add when their yield, lack of compelling alternative candidates (again, in the context of my existing portfolio) and available funds coincide - which is rarely. See also the likes of Diageo, Unilever and the extensive body of debate here about the pro's and con's of adding lower yielding sector heavyweights to your HYP when they are at the top of their yield cycle. Buying JMAT drops my running yield for 2019 purchases to a rock bottom 6.2%
. Here's hoping it bores me senseless chugging out a safe, inflation and interest rate-beating income stream for decades to come. For full disclosure my other candidates were Pennon and British Land - already have plenty of each, adding more would bring them up to self-imposed limits on share (BLND) or sector (PNN) contributions to my HYPs income stream. With a couple more purchases due this year that may still happen.
Regards, EEM