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Microfocus an HYP share?

Practical discussions about equity High-Yield Portfolios (HYP) for income
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monabri
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Re: Microfocus an HYP share?

#198630

Postby monabri » February 3rd, 2019, 6:37 pm

Dividend Data for MCRO.

Code: Select all

Year End | Interim | Final  | Special | Total* | Growth
04/2018  | 34.60¢  | 58.33¢ |       - | 92.93¢ |  5.53%
04/2017  | 29.73¢  | 58.33¢ | 168.00¢ | 88.06¢ | 32.06%
04/2016  | 16.94¢  | 49.74¢ |       - | 66.68¢ | 37.77%
04/2015  | 15.40¢  | 33.00¢ | 60.00p  | 48.40¢ | 10.00%
04/2014  | 14.00¢  | 30.00¢ | 60.00p  | 44.00¢ | 10.00%
04/2013  | 11.90¢  | 28.10¢ | 50.00p  | 40.00¢ | 26.58%
04/2012  | 8.20¢   | 23.40¢ | 45.00p  | 31.60¢ | 35.04%
04/2011  | 7.20¢   | 16.20¢ |       - | 23.40¢ |  7.34%
04/2010  | 5.60¢   | 16.20¢ |       - | 21.80¢ | 39.74%
04/2009  | 4.50¢   | 11.10¢ |       - | 15.60¢ | 20.00%
04/2008  | 3.60¢   | 9.40¢  |       - | 13.00¢ | 30.00%
04/2007  | 3.00¢   | 7.00¢  |       - | 10.00¢ | 66.67%
       


HL figures for comparison ( Overview Page)

Code: Select all

Year ending:             | 30/04/2019 | 30/04/2018 | 30/04/2017 | 30/04/2016 | 30/04/2015 | 30/04/2014
Dividend payments        |           
Final:                   | 58.33¢     |          - | 58.33¢     | 49.74¢     | 33.00¢     | 30.00¢   
Interim:                 | 34.60¢     |          - | 29.73¢     | 16.94¢     | 15.40¢     | 14.00¢   
Total dividend for year: |          - |          - |      $0.88 |      $0.67 |      $0.48 |      $0.44
Dividend metrics         |           
Dividend growth:         | n/a        |     -2.25% |     32.06% |     37.77% |     10.00% |     10.00%
Dividend yield:          | n/a        |      5.70% |      2.60% |      3.30% |      2.90% |      4.30%
Dividend cover:          | n/a        |       2.09 |       2.07 |       1.52 |       2.76 |       2.28


On the HL website, if you look at the Full Dividend Breakdown page, it doesn't have data further than financial year end 30/4/2017 but the Overview page has data for year ending 30/04/2019....looks like the data has been pasted in the wrong column ?.

Maybe some of the price volatility is associated with the large special dividends?

MDW1954
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Re: Microfocus an HYP share?

#198656

Postby MDW1954 » February 3rd, 2019, 8:38 pm

Arborbridge wrote:
kempiejon wrote:Microfocus MCRO,
FTSE100 yes, cap £6,100M
Forecast Yield = 5.7% (from webfg https://uk.webfg.com/equity/Micro_Focus ... onal-13372)
current yield = 4.11% (from dividenddata https://www.dividenddata.co.uk/dividend ... ?epic=MCRO)
Dividend increase history 13 years (divdata)
5 year dividend increase CAGR= 18% (dd)
Div Cover current 2.1 Forecast 1.9 (webfg)

I picked them about a year ago, turns out not excellent timing as the yield has improved a lot, I've added since and might again.


Does that chart of rising dividends look a bit too good to be true? 21.74% CAGR over 10 years?
A slightly odd thing, BTW, I first looked at the dividend figures on the HL site, and it gives growth of -2.25% for 2018. Not sure why that is.

And that share price chart looks rather, well, too volatile for sleepless nights. Do I need another share which can plunge like that overnight? Maybe MCRO isn't boring enough for a HYP, but then it would provide some nice diversity - and I could do with some more.

Arb.


Arb,

Look at the dividend chart I posted earlier in this thread, in my post to Ian P -- the post that pointed out that MCRO was a FTSE 100 share with a 4.7% yield that was bigger than many popular HYP picks around here, and with a better dividend growth record, too.

Alas, it is "unknown" and therefore fatally flawed. Perhaps I should stick to Glaxo which hasn't raised its dividend for -- what? -- five years?

MDW1954

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Re: Microfocus an HYP share?

#198659

Postby Lootman » February 3rd, 2019, 8:46 pm

MDW1954 wrote:Perhaps I should stick to Glaxo which hasn't raised its dividend for -- what? -- five years?

And which is still one third below it's share price of 20 years ago in USD terms.

"Never sell Glaxo". Ha ha. Anyone remember that?

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Re: Microfocus an HYP share?

#198691

Postby Arborbridge » February 4th, 2019, 7:47 am

MDW1954 wrote:
Look at the dividend chart I posted earlier in this thread, in my post to Ian P -- the post that pointed out that MCRO was a FTSE 100 share with a 4.7% yield that was bigger than many popular HYP picks around here, and with a better dividend growth record, too.

Alas, it is "unknown" and therefore fatally flawed. Perhaps I should stick to Glaxo which hasn't raised its dividend for -- what? -- five years?

MDW1954


Yes, I've just done that, and the "too good to be true" dividend increases are shown to have been supported by eps growth.


Alas, it is "unknown" and therefore fatally flawed. Perhaps I should stick to Glaxo which hasn't raised its dividend for -- what? -- five years?


Good point! Maybe I really should look at this again - but first I should decide whether I want another share in my HYP. The desire might have been more pressing had I disposed of Pearson, but I didn't, but I suppose my HYP is getting rather small now there are only 37 shares in it ;) This is a classic case of a share I have dismissed previously because the yield was too low - now it has jumped to something reasonable (but not too high) and we are suspicious that this is indicative of a bigger problem somewhere. But in my case, this is the same scenario as WPP - I waited years for a reasonable yield, and then bought it.

BTW, Microfocus wasn't unknown to me, for it was discussed by Jim Slater back in the day well before HYP. I might even have owned some shares in certificate form, but I don't have an easy way to find out pre-spreadsheet.

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Re: Microfocus an HYP share?

#198708

Postby Alaric » February 4th, 2019, 9:10 am

I dare say they've moved on, but twenty years ago a USP was that they offered a version of COBOL (a widely used commercial computer language originally from the 1950s) which could be run on machines much smaller than the IBM or similar monsters previously in use.

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Re: Microfocus an HYP share?

#198729

Postby Wasron » February 4th, 2019, 10:01 am

Alaric wrote:I dare say they've moved on, but twenty years ago a USP was that they offered a version of COBOL (a widely used commercial computer language originally from the 1950s) which could be run on machines much smaller than the IBM or similar monsters previously in use.


I’m sat at work today using MicroFocus software to query mainframe systems written in COBOL...

Some of those systems are likely to be around for another couple of decades, migration from legacy mainframes is complicated and expensive, especially now that all the original coders have long since retired...

And I probably should get back to work...

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Re: Microfocus an HYP share?

#198779

Postby MDW1954 » February 4th, 2019, 12:02 pm

Alaric wrote:I dare say they've moved on, but twenty years ago a USP was that they offered a version of COBOL (a widely used commercial computer language originally from the 1950s) which could be run on machines much smaller than the IBM or similar monsters previously in use.


They're still big in COBOL, I gather from various IT contacts.

https://www.microfocus.com/solutions/cobol-development/

But these days it seems to be just a part of the portfolio:

https://www.microfocus.com/about/

MDW1954

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Re: Microfocus an HYP share?

#201316

Postby MDW1954 » February 14th, 2019, 12:32 pm

A set of very decent results from this under-the-radar HYP share this morning, and the shares are up 13% at the time of writing.

Dividend up 14.5%, which is nice, and the yield now down to 4% from the 4.7% when this thread started a couple of weeks back.

Capital-wise, I and others who bought in are now up 70% in 12 months.

https://investors.microfocus.com/investors-media/results-reports/results-centre/

MDW1954

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Re: Microfocus an HYP share?

#201339

Postby ayshfm1 » February 14th, 2019, 1:03 pm

We got quoted £1 million by MF for a Cobol license(!)

Decided to run the code through a COBOL to C converter fix the C, profile it and optimise the bits that were performance critical, kept the million. 100K we'd have paid up.

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Re: Microfocus an HYP share?

#201485

Postby PaulBullet » February 15th, 2019, 8:44 am

I purchased these for my HYP in the dip around October 2018.

My technology sector was very small as I only has Computer Centre (CCC) in there which was also brought when I first set up my HYP.

I had these and Sage on my radar and when the yield showed 6%+ i purchased them after a bit of research that led me to believe that the blip was indeed a blip.



Paul

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Re: Microfocus an HYP share?

#215191

Postby PinkDalek » April 15th, 2019, 2:48 pm

From Valentine's Day 2019:

MDW1954 wrote:A set of very decent results from this under-the-radar HYP share this morning, and the shares are up 13% at the time of writing.

Dividend up 14.5%, which is nice, and the yield now down to 4% from the 4.7% when this thread started a couple of weeks back.

Capital-wise, I and others who bought in are now up 70% in 12 months. ...


From April Fools' Day 2019:

https://www.investegate.co.uk/micro-foc ... 00065768U/

Micro Focus International plc

Proposed Return of Value of the pounds sterling equivalent of US$1.8 billion

0.8296 Share Capital Consolidation

Posting of Circular and Notice of General Meeting


Details in the link and subject to General Meeting approval and finalisation of the amount to be returned per Ord etc but Return of Value will equate to the pounds sterling equivalent of approximately $4.33 to $4.39 per Ordinary share ....

How that all impacts the forward yield is not something that particularly concerns me. :)

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Re: Microfocus an HYP share?

#215200

Postby NeilW » April 15th, 2019, 3:26 pm

TFW you realise you are old enough to remember when Microfocus was just a supplier of COBOL compilers.

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Re: Microfocus an HYP share?

#215234

Postby PinkDalek » April 15th, 2019, 5:29 pm

NeilW wrote:TFW you realise you are old enough to remember when Microfocus was just a supplier of COBOL compilers.


TFW?

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Re: Microfocus an HYP share?

#215238

Postby monabri » April 15th, 2019, 5:34 pm

PinkDalek wrote:
NeilW wrote:TFW you realise you are old enough to remember when Microfocus was just a supplier of COBOL compilers.


TFW?


You need to "get down with the kids" (try not to get arrested ;) )

https://www.merriam-webster.com/words-a ... eling-when

(p.s. I had to look it up!)

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Re: Microfocus an HYP share?

#217693

Postby kempiejon » April 27th, 2019, 10:48 am

This share has been on in top up viewer for my ISA'd HYP, not necessarily this month but it's been in the frame for a while. I notice they've made an announcement re another special and consolidation
http://otp.investis.com/clients/uk/micr ... id=1254767
If this new detail would change my opinion, whether it represents a time sensitive deal, I'll have to ponder this weekend as one would have to buy on Monday to get in advance of the reorganisation or does buying ex offer the better play there's probably nothing significant in it? I do have MCRO without the ISA and so, like a few other HYPables, is earmarked for a potential sale to bring my non sheltered income within the limit.

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Re: Microfocus an HYP share?

#217702

Postby PinkDalek » April 27th, 2019, 11:59 am

kempiejon wrote:... I notice they've made an announcement re another special and consolidation
http://otp.investis.com/clients/uk/micr ... id=1254767 ...


Thanks for the update (the original details being a few posts back) especially as I'd forgotten to look out for it!

Merely for the record, the RNS you've linked to includes:

25 April 2019 ... Update on Return of Value ... the Return of Value will amount to 335.859391 pence per Ordinary Share ... the B Share Scheme Payment Date, which is currently expected to be on or before 13 May 2019 in respect of Ordinary Shares ...

The Share Capital Consolidation remains as Shareholders will receive 0.8296 New Ordinary Shares for each Existing Ordinary Share held at the B Share Scheme Record Time as per the earlier RNS (subject to fractions arising on the consolidation and depending on how each individual broker deals with these).

As you suggest, all things being equal, I doubt there's anything significant in buying in your ISA on 29 April 2019 or not, although I wouldn't see any point in using ISA funds to buy cum and then receive back roughly 17-18% a couple of weeks later.

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Re: Microfocus an HYP share?

#217710

Postby kempiejon » April 27th, 2019, 12:24 pm

Thanks for the reply and comments PinkDalek, I missed it first time around and only saw the details re the update this morning while checking yields and dates on dividenddata. Quite probably no point paying the stamp and fees buying to then get the cash returned to me and MCRO are not necessarily the best buy this month in the ISA.

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Re: Microfocus an HYP share?

#217726

Postby UncleEbenezer » April 27th, 2019, 2:13 pm

They've done a lot of these B-share consolidations in the time I've held, so historical comparisons may be difficult (perhaps that's what someone saw when the HL data didn't look right?)

Overall this has been one of my most successful holdings, but it is volatile. From memory, I started out with a big loss (something like 40%) before it shot up and both triple-bagged on what I'd paid and returned cash. Since then it's been up and down, with the most recent near-50% fall being when the HPE acquisition caused indigestion. But they've also returned a lot of cash. Those dividends are, on the face of it, HYPable, but your income from them will fall over time unless you reinvest when they return cash.

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Re: Microfocus an HYP share?

#217734

Postby monabri » April 27th, 2019, 2:34 pm

Data from Dividend data (interesting that the Special is 335.86 cents ..holders might wish to check this with any RNS from MCRO) - don't hold.


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

Image

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Re: Microfocus an HYP share?

#217759

Postby PinkDalek » April 27th, 2019, 4:50 pm

monabri wrote:Data from Dividend data (interesting that the Special is 335.86 cents ..holders might wish to check this with any RNS from MCRO) - don't hold.


No need to check - it is wrong (as might be the cents against 04/17). The correct figure in pence shows to the right of the chart.


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