Diverse Income Share Discussion Threads

[the grumpy old men] 17/6/2019 10:24

MONEY OBSERVER Vodafone dividend cut highlights need for new approach to income investing The telecoms company’s dividend cut ended a two-decade run of rising payouts. Chris McVey suggests three key issues for equity income investors to consider. June 17, 2019 by Chris McVey Share on: As you may have read last month, Vodafone announced that it was cutting its dividend, despite the board having recommitted to it six months earlier. Vodafone’s cut ends a two-decade run of rising payouts. It also highlights three important issues that equity income investors need to keep in mind. The good news is that investors can mitigate this risk by diversifying the types of income funds they hold, and being aware of three key issues. Vodafone dividend cut: which UK shares might be next? 1) High dividend yields can mean low dividend cover If you hold a stock for its dividend, you want to be confident that the company can keep paying it. Ideally you want to see dividend cover of 2.0 or above, which means profits are enough to cover the payout twice over. In the case of Vodafone, dividend cover was less than 1.0 just before the announcement of its dividend cut. This is clearly unsustainable over the long term, so we shouldn’t be too surprised that Vodafone acted as it did. What it should draw our attention to is the fact that among the big dividend payers, the average dividend cover is significantly below that 2.0 mark. If we look at the 10 FTSE 100 companies that pay the most money out to shareholders, their average dividend cover is less than 1.5. If we look at the top 10 FTSE 100 companies by dividend yield, the figure is just 1.2. 2) Popular income stocks can have below-average dividend growth Many of the big blue-chip dividend payers have reached a stage in their maturity where earnings and dividend growth have slowed. If we take the top 10 companies by total dividend payout and strip out BP and Royal Dutch Shell (because oil price moves make their earnings more volatile), we see that on average their earnings and dividends are expected to grow more slowly than the FTSE All-Share average over the period from the end of 2017 up until 2020. 3) Concentration risk In the run-up to its dividend cut, Vodafone was one of the FTSE 100’s top 10 dividend payers, by both dividend yield and by the total amount that it paid to shareholders. In fact, the top 10 biggest dividend payers accounted for more than half the dividends paid by FTSE 100 companies in 2018. Now consider the fact that three-quarters of traditional income funds hold those stocks, and you’ll see why equity income investors need to have an eye on concentration risk. They may want to consider adding a different type of fund to their portfolio for diversification. A different approach It would be complacent to assume that Vodafone will turn out to be an isolated case. So where can income investors find diversification? Last December, we launched the FP Octopus UK Multi Cap Income Fund, which invests in companies across the entire market cap spectrum, drawing on our longstanding smaller companies’ expertise. This approach has allowed us to seek out companies with sustainable dividends, which have above-average earnings and dividends growth, and that tend not to appear among the holdings of more traditional equity income funds. The experience of Vodafone shows that while a household name and impressive past performance may feel comforting, investors need to consider diversification, particularly if income is important. Chris McVey is a senior fund manager and head of the FP Octopus UK Multi Cap Income Fund, Octopus Investments.

[andyj] 15/6/2019 03:33

Discount to NAV at all time high, 16% down on the year, share price now back to where it was 5 years ago. And we are paying for this terrible performance. I am struggling to find a reason to keep this in my portfolio.

[waldron] 10/6/2019 05:20

Conclusion In conclusion, BP is part of the consortium that will be working to boost the production of Angola's Block 15 by approximately 40,000 barrels per day. This will have the effect of contributing to BP's production growth over the next few years. With that said, though, BP is well-positioned to deliver very strong production growth over the next few years. Indeed, its growth is likely to be among the strongest in the industry. This should result in forward earnings growth, although the stock may be a bit overvalued at the current price. BP does still boast a large and well-covered dividend, though, so there are certainly reasons to own the stock. Overall, BP could certainly be part of a growth and income portfolio. Https://seekingalpha.com/article/4269283-bp-strong-forward-growth-high-dividend

[aleman] 04/6/2019 08:02

HYNS year-end update ahead expectations and about 25% up on last year so should see an increased dividend, taking yield over 4%?

[la forge] 30/5/2019 08:15

Total will distribute a dividend of 2.56 E per share Finance Circle • 29/05/2019 at 16:45 (CercleFinance.com) - Total announces that its general meeting today has adopted the resolutions approved by the Board of Directors, including the distribution of a dividend of 2.56 euros per share, up 3.2% by compared to the previous year. Total and Shell are processed about 9.7 times above OMV (8.1 times), when Repsol displays a ratio of only 7.5 times.

[sarkasm] 28/5/2019 12:59

Tuesday 28 May 2019 11:08am Interactive Investor Talk What is City Talk? Latest Vodafone dividend cut: which UK shares might be next? Share Interactive Investor Talk Contributor Vodafone dividend cut: which UK shares might be next? (Source: iStock) By Tom Bailey from interactive investor. Vodafone's cut might be a canary in the coalmine for FTSE 100 shares. Over the past year the market has increasingly cooled on Vodafone (LSE:VOD). The company has a long list of problems, including the high cost of 5G investment, being squeezed by competition on the continent and high levels of debt. The company's share price fell by roughly 30% between April 2018 and April 2019. As a result, the company's dividend yield shot up to a seemingly generous 9%. Now, however, reality has caught up with the company's payout level. On Wednesday 15 May, Vodafone announce its dividend would be cut by 40%, giving it a new yield of around 6%. According to Simon McGarry, senior equity research analyst, Canaccord Genuity Wealth Management: "The red flags have been there for all to see - the dividend yield was dangerously high, low dividend coverage (ratio of earnings to dividends) and dividend growth had slowed - last year growth was only 2% and in its recent statement, there was no growth at all." The share has consistently featured on our Dividend Danger Zone screen since its creation in 2016. A number of high-profile investors had previously grown concerned about Vodafone's position. Mike Fox, manager of Royal London Sustainable Leaders fund recently told Money Observer that he had sold his stake in the company. Similarly, Robin Geffen, chief executive of Neptune Investment Management, sold out of Vodafone last year. Vodafone, however, isn't likely to be the only major UK company seeing a dividend cut in the coming months. The dividend payouts for a number of FTSE companies currently look perilous. According to Geffen: "Vodafone's announcement should be viewed as a canary in the coalmine moment for UK equity income investors" Geffen fears that many other supposedly "safe" dividend-paying companies are also likely to face a cut, citing falling levels of dividend cover as his key concern. He adds: "We would put the tobacco majors Imperial Brands (LSE:IMB) and British American Tobacco (LSE:BATS), BT Group (LSE:BT.A) and the major utilities stocks in that category." British American Tobacco currently has a dividend cover of 1.35 times, Imperial Brands 0.87 times and BT 1.47 times. As a rule of thumb, shares with a dividend cover score of above 2 are considered reliable dividend payers. Meanwhile, a number of companies on our Dividend Danger Zone screen all have dangerously low dividend covers. The worst offender is Stobart Group (LSE:STOB), with a dividend cover of 0.5 times. That means that half of its dividend is being paid for with borrowing. The infrastructure and support services company already cut its dividend last December, citing a lack of cash. Further cuts, it seems, may still be ahead. Hammerson (LSE:HMSO), the property group, is also on the screen, with a particularly high net debt to EBITDA ratio of 10.9 times. This was one of the reasons it entered our screen in March. At the time, McGarry noted that the company was attempting to sell off assets to cut its debt burden. But, he warned: "Hammerson might struggle to deliver its strategy to dispose of retail parks in a bid to reduce leverage, which is too high at 40%+ loan-to-value." The company's dividend cover is currently 1.1 times. Also on the screen is SSE (LSE:SSE), with a dividend cover of 1.2 times. Similarly, Geffen is bearish on the dividend prospect of the utility sector as a whole, noting his is the only IA UK Equity Income Fund to have 0% exposure to utilities. The sector has an average cover of 1.29 times. This article was originally published in our sister magazine Money Observer.

[maywillow] 28/5/2019 12:28

cheers guys and gals thanks aleman, in the header it goes a real to get decent info what all the infantile disruptors and hatemongers out there have a great week

[the grumpy old men] 28/5/2019 10:44

Cheers Aleman perhaps maywillow could put in the header if and when about shell no1

[aleman] 28/5/2019 10:34

Https://www.linkassetservices.com/documents/dividend-monitor_1/q1-2019-dividend-monitor.pdf

[carlsagan1] 21/5/2019 21:26

Does anybody have experience with brokers X-O(by jarvis) or iweb-sharedealing(by halifax). ii have increased theres fees again(from £90 a year to now £120/£240), I think its time I finally left them. Both x-o and iweb have a simple flat trade fee of £5.95 per trade and have no monthly/yearly admin fees or inactivity fees. any1 use them?

[minky] 06/3/2019 06:06

Funny, they do not mention discoraging the Directors, Ceo,s etc from having such high salaries and added benefits when they have pension deficits. There must be many who could take less to support the pension fund without too much impact on shareholders. After all, where would a company be without it's shareholders. I think they are entitled to a return on capital employed.

[waldron] 05/3/2019 18:32

UK pensions watchdog to clamp down on ‘excessiveR17; dividends 5 March 2019By Nick Reeve Print Email Share Comment Add to my reading list The UK’s Pensions Regulator (TPR) is to visit more defined benefit (DB) schemes and make more interventions as part of a “robust” new approach to supervising the sector. In its annual funding statement, published this morning, TPR stated that it would take a much firmer stance on the ratio of dividend payments to DB scheme contributions. Weaker employers should pay more into their schemes than to shareholders, TPR said, while companies that were unable to support their schemes should not be paying dividends at all. If a company paid dividends greater than the amount paid to its pension scheme, the regulator said it would “expect a strong funding target” and a short deficit recovery period. TPR has been scrutinising dividend payments and scheme funding arrangements as part of its ‘clearer, quicker, tougher’ approach to regulation, rolled out last year after severe criticism from politicians in the wake of the high-profile collapses of BHS and Carillion. The regulator also urged schemes to set out more specific long-term goals for improving funding and securing member benefits – one of the main elements of the government’s reform proposals, currently under consultation. David Fairs, TPR’s executive director of regulatory policy, analysis and advice, said: “In order to support schemes we are setting out what we expect trustees and sponsoring employers to consider on funding, investment and covenant. “The annual funding statement will help them think about the risks facing their scheme, to consider what levels of risk are acceptable and how to mitigate risks where appropriate. “Trustees have fed back to us that they find this clarity helpful in negotiating good outcomes for members and avoiding interventions and action from TPR. “We have taken a tough stance on schemes that have not been treated fairly and will continue this approach where members’ benefits are under pressure.” ‘Covenant leakage’ TPR said it was “concernedR21; about the imbalance between payments to company pension schemes and dividends paid to shareholders, as well as other forms of “covenant leakage”. “Recent corporate failures have highlighted the risk of long recovery plans while payments to shareholders are excessive relative to deficit recovery contributions,”; the regulator said. TPR has already contacted a number of schemes that were at risk of losing out relative to shareholders, quizzing them on funding approaches and negotiations with sponsoring employers. It indicated that it would continue to make such interventions at a greater number of schemes “where we do not believe that their valuations reflect an equitable position relative to other stakeholders”. The regulator also vowed to engage with a number of schemes this year if recovery periods were considered to be “unacceptably long”, and warned trustee boards to expect communications in the coming months. “While some trustees may not consider their current recovery plan to be long, we will be looking at both the maturity and the covenant of the employer in forming a view on what we consider to be an acceptable recovery plan length,” TPR said. Consultancy firm Hymans Robertson estimated that one in five FTSE 350 companies with DB schemes were at risk of intervention from TPR. The full annual funding statement is available on the regulator’s website. The industry responds Dan Mikulskis, LCP Dan Mikulskis, LCP “For weaker sponsors, there is always going to be a very difficult balance to be struck between the interests of pensioners and the ongoing solvency of the company. It is a hard area to regulate but we believe it is important to recognise that in many cases pension scheme trustees are a key stakeholder in the ongoing company, and should be recognised as such – the expectations suggested by the regulator around dividend payments help to achieve this.” – Dan Mikulskis, partner at LCP “Given the desire to strengthen DB pensions funding, the regulator’s robust stance makes perfect sense. It is challenging employers to fund pension schemes ahead of paying shareholders. But it will create challenges for business, and some employers may be surprised by how much the ground is shifting. Many companies will need to give a higher priority to pensions funding and risk management than they do today and some will come under pressure to either increase pension contributions or cut dividends.” – Mike Smedley, pensions partner at KPMG “Businesses with pension scheme valuations this year will be under considerable pressure to pay higher contributions to their pension scheme. This will be incredibly unwelcome for those who are wrestling with tough trading conditions or Brexit-related uncertainty. If businesses are struggling, TPR will be highly likely to intervene to put the interests of pensioners ahead of investors… All trustees are going to have to work harder to demonstrate to TPR that the risks they are running can be supported by the business their scheme relies on.” – Patrick Bloomfield, partner at Hymans Robertson Jenny Condron, Association of Consulting Actuaries Jenny Condron, Association of Consulting Actuaries “Sponsors, trustees and their advisers need to be assured that the changing approach will not herald an overly inflexible one and that the regulator will remain proportionate in using its powers, particularly those situations where employers are engaged in corporate restructuring – often with the specific aim of enhancing the organisation’s future prospects and therefore the covenant supporting the pension scheme.” – Jenny Condron, chair of the Association of Consulting Actuaries Sir Steve Webb Sir Steve Webb “One of the most striking features of the new statement is the tougher language around companies paying large dividends when their pension scheme is in significant deficit. Pension scheme members are understandably concerned when their pension scheme is well short of the money needed to pay their pensions if they see large amounts of money going out of the business in dividends. While there is nothing wrong in companies paying dividends, it is good to see the regulator putting greater pressure on firms to make sure that sorting out the hole in the pension scheme gets the attention it deserves.” – Sir Steve Webb, director of policy at Royal London

[waldron] 31/1/2019 07:08

31/01/2019 7:02am UK Regulatory (RNS & others) TIDMRDSA TIDMRDSB ROYAL DUTCH SHELL PLC FOURTH QUARTER 2018 INTERIM DIVIDEND The Board of Royal Dutch Shell plc ("RDS" or the "Company") today announced an interim dividend in respect of the fourth quarter of 2018 of US$0.47 per A ordinary share ("A Share") and B ordinary share ("B Share"), equal to the US dollar dividend for the same quarter last year. Details relating to the fourth quarter 2018 interim dividend It is expected that cash dividends on the B Shares will be paid via the Dividend Access Mechanism from UK-sourced income of the Shell group. Per ordinary share Q4 2018 RDS A Shares (US$) 0.47 RDS B Shares (US$) 0.47 Cash dividends on A Shares will be paid, by default, in euro, although holders of A Shares will be able to elect to receive dividends in pounds sterling. Cash dividends on B Shares will be paid, by default, in pounds sterling, although holders of B Shares will be able to elect to receive dividends in euro. The pounds sterling and euro equivalent dividend payments will be announced on March 11, 2019. Per ADS Q4 2018 RDS A ADSs (US$) 0.94 RDS B ADSs (US$) 0.94 Cash dividends on American Depository Shares ("ADSs") will be paid in US dollars. ADSs are listed on the New York Stock Exchange under the symbols RDS.A and RDS.B. Each ADS represents two ordinary shares, two A Shares in the case of RDS.A or two B Shares in the case of RDS.B. ADSs are evidenced by an American Depositary Receipt (ADR) certificate. In many cases the terms ADR and ADS are used interchangeably. Dividend timetable for the fourth quarter 2018 interim dividend Announcement date January 31, 2019 Ex-dividend date February 14, 2019 Record date February 15, 2019 Closing date for currency election (see Note below) March 1, 2019 Pounds sterling and euro equivalents announcement date March 11, 2019 Payment date March 25, 2019

[florenceorbis] 25/1/2019 09:30

Https://investomania.co.uk/2019/01/does-the-vodafone-group-plc-share-price-have-investment-appeal-after-todays-trading-update/ Does the Vodafone Group plc share price have investment appeal after today’s trading update? Can Vodafone Group plc (LON:VOD) (VOD.L) deliver improving share price performance? January 25, 2019 Robert Stephens Vodafone (LON:VOD) Vodafone share price Vodafone share price The Vodafone Group plc (LON:VOD) (VOD.L) share price is down 1% today after the company released a trading update for the quarter ended 31 December 2018. In my view, the company continues to make progress with the delivery of its strategy. It is moving towards a simpler operating model, while investing heavily in digital opportunities. Partnering is likely to become an area of increased interest for the business in future, as it aims to reduce costs and improve asset utilisation. During the quarter, the company’s revenue declined by €0.8 billion to €11 billion, while third quarter organic service revenue grew by 0.1%. The company’s performance in Europe was similar to the second quarter, with service revenues decreasing by 1.1%. There was, however, improving customer and financial trends in Italy, as well as robust retail growth in Germany. The company also experienced reduced churn in Spain, as well as a consistent performance in the UK. Vodafone’s Rest of World segment grew by 4.9%, with a decline in South Africa as a result of a weak economy being offset by strong performance in other markets. Mobile contract churn was reduced by 2 percentage points. As part of its increased focus on partnerships, the company intends to extend its existing UK network sharing agreement with Telefonica O2 to include 5G services. With Vodafone on track to meet guidance for the full year, I think its performance in the third quarter was relatively positive. Sure, there is a long way to go with the implementation of its refreshed strategy. But I think it could create a stronger and more efficient business which is better able to generate improving financial performance. Trading on a dividend yield of 8.8%, I think the stock offers a margin of safety. Therefore, I believe it has recovery potential over a long-term time period.

[the grumpy old men] 25/12/2018 10:11

Https://uk.finance.yahoo.com/m/15ce0378-0db5-3e21-98f5-fce9f229063d/ss_shell-tops-the-list-with-the.html

[waldron] 13/12/2018 15:52

Thursday 13 December 2018 3:42pm FTSE dividend payments to hit record £94bn next year and yields boosted by market drop Share Callum Keown Reporter at City A.M. covering markets and exchanges, pharmaceuticals, science, [..] Show more Follow Callum Markets Nervous Amid Fears FTSE 100 dividend payments set to reach record high (Source: Getty) FTSE 100 dividend payments could hit record highs of £94bn next year while falling markets have increased yields, tempting investors and keeping the index stable amid political uncertainty. A difficult autumn for the markets with shares falling has seen the forecast dividend yield for the blue chip index rise to 4.9 per cent for 2019, according to AJ Bell. The investor platform’s analyst Russ Mould said the “tempting̶1; yields would provide support for UK stocks among the “maelstrom of political uncertainty.” Housebuilder Taylor Wimpey could offer the highest yield of 13.1 per cent, followed by coal and steel miner Evraz - 12.1 per cent - and Persimmon at 11.8 per cent. Barratt Developments could return yields of 9.6 per cent, as three housebuilders appeared in the top ten of AJ Bell’s analysis. Mould said: “Such a fat yield looks extremely tempting compared to the Bank of England’s 0.75 per cent base rate for cash and the 1.23 per cent yield on benchmark UK ten-year Gilt. “The presence of three house builders in the top ten is testimony to the size of their capital return programmes, but it may also hint at investor scepticism that the industry can maintain its current lofty levels of profitability without the benefit of Government assistance, via the Help to Buy and Lifetime ISA schemes.” But the research raised concerns over Standard Life Aberdeen, whose long streak of dividend increases could end next year and Vodafone, where the shareholder distribution may not grow for the first time in two decades. More than half of the £93.7bn paid out to shareholders will come from just ten firms, with Shell, HSBC, BP, and British American Tobacco accounting for 34 per cent of forecasted payments.

[waldron] 13/12/2018 07:28

13/12/2018 | 7:47 PARIS (Agefi-Dow Jones) - Total's board of directors decided on Wednesday to reduce the share capital of energy giant by canceling 44.6 million treasury shares, representing 1.66% of capital. These shares were bought back between 9 February and 11 October 2018, Total said in a statement. "This transaction has no impact on Total SA's consolidated financial statements, diluted weighted average number of shares and net earnings per share," the group added. Following the cancellation of these shares, the number of shares making up the capital of Total amounted to 2.64 billion and the number of voting rights exercisable at a general meeting at 2.77 billion. The board of directors also decided on Wednesday to distribute a second interim dividend of € 0.64 per share, "identical to the first interim dividend for fiscal year 2018 and up 3.2% compared to the three installments and the balance paid for the 2017 fiscal year, "said Total in a separate statement. -Alice Doré, Agefi-Dow Jones; [phone]; [e-mail] ed: VLV Agefi-Dow Jones The financial newswire

[shauney2] 11/12/2018 16:44

WHR, warehouse reit.e-commerce play and the growth in online shopping via last mile urban sheds. NAV 105p,current price 94p.Dividend total of 6p for the full year paid quarterly.Good recent results. Ditto BBOX and SHED.

[aleman] 10/12/2018 18:32

Energy and mining trust, BRCI, up to 5.8%.

[aleman] 10/12/2018 18:25

HSD have only just roughly halved their dividend and the yield has gone back up to 9.7%.