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Author Topic: I want to experiment with dividends  (Read 24353 times)

Hamster

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I want to experiment with dividends
« on: December 08, 2017, 03:43:01 pm »
Basically, I want to set up a small portfolio on EE focussed on dividends. We're talking really small here, like R5000 odd,b ut taking advantage of their fractional shares I can divide it up proportionally. The idea is to get a feel for it and one day maybe go big!

I've got a few shares in mind but if somebody here that knows a bit more about this can point out a few good ones that'll be great :)

Also, would any of you keep a small amount of PREFTX in there does the downgraded make it too risky?
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Orca

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Re: I want to experiment with dividends
« Reply #1 on: December 08, 2017, 08:07:51 pm »
The JSE is a gambling casino nowadays with politic and corruption going on and no one can predict anything anymore. You never know what is going to happen tomorrow.

Going for companies that pay high dividends, CML comes to mind. They have very little capex and can afford to pay substantial dividends. They also cannot make new acquisitions as they are already too bloated so they have no need to skimp on dividends.

Only problem is that if we get downgraded to total crap then a very quick exit by foreign institutional investors will have to happen by there countries laws. I strongly doubt this will happen.

If you want a monthly income then look at Preference Shares or DIVTRAX  that tracks stocks that consistently increased their dividends. 

Companies that consistently increase dividends can only be good growing companies like ummmm....Steinhoff.
 
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gcr

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Re: I want to experiment with dividends
« Reply #2 on: December 08, 2017, 10:37:23 pm »
Hamster - there are forumites who invest in shares to get dividend returns, I on the other hand am not really interested in investing in high dividend returns as I am more interested in capital appreciation. I have a sizeable portfolio of shares and garner about R 75,000 p.a. in dividends, which I always invest back into shares (not necessarily the shares that declared the dividends). The dividends paid by companies are normally somewhere of the order of 5% if you are lucky per annum, so the chances are that if you invest your capital in a bank FD you can get anything from 6% plus - my 32 day account is paying 7.1%.
So in my opinion I would rather invest with a bank - if one factors in inflation then you are really getting no return on dividends. So my choice of poison is to buy good quality shares and in companies which generate substantial cash - which is largely the retail operation (not Edcon). I also hold manufacturing and suppliers to the food sector which have done well.
If you are using a broker and have decided on a few shares that you want to invest in then look these companies up on your broker platform to see how the share price has appreciated over the last 5 years and what their dividend payouts have been over the same period - dividends should increment along with share price incrementation
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Mr_Dividend

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Re: I want to experiment with dividends
« Reply #3 on: December 09, 2017, 05:18:17 am »
GCR - so no capital growth with dividend paying stocks? - seriously, you been in the game long enough to know that. The idea (or at least my version), would be to live on a healthy stream of dividend that increase at above inflation BUT also for your capital to grow at above inflation.

hamster - like any good portfolio, diversification should be front of mind. But first decide on the initial dividend yield required - the lower it is, the more choice.  At low amounts 3% - you could included some ETF's - but at higher 8% you going to have huge weightings of property.

Around 5% is probably a good percent to aim for - maybe 6%

Then you'll want a nice chunk of that in pounds/euro/dollars.

And of course - you want companies that have a history of growing dividends - or at least maintaining them during tough years. And if you need 5% - them aim for 6% to give yourself some padding.

But something like :: (what happens when you wake up at 04H00)  :))

   amount   PPS   Shares   Expected D   Yield   Amount Exp
tex   500   602   83.06   103   17.11   85.55
RES   500   14000   3.57   623   4.45   22.25
AVI   500   10310   4.85   445   4.32   21.58
CML   500   6882   7.27   437   6.35   31.75
SSS   500   1243   40.23   95   7.64   38.21
VOD   500   14059   3.56   850   6.05   30.23
WHL   500   5780   8.65   313   5.42   27.08
BHP   250   24556   1.02   1500   6.11   15.27
Balwin   250   506   49.41   40   7.91   19.76
NWL   500   3900   12.82   300   7.69   38.46
BTI   500   90000   0.56   2900   3.22   16.11
   5000               346.26
Total Yield   6.93               

Quick and dirty  but will should get you 6%  yield - But will it's capital also grow at above inflation....
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Hamster

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Re: I want to experiment with dividends
« Reply #4 on: December 09, 2017, 05:24:56 am »
Bah, you guys are right! Ok, so "new plan"... I want to experiment with shares. I've got ETFs, Unit Trusts, a 32 day account and some crypto.

What I do not have are regular shares. So do you guys have one or two decent companies that you can point out that is not Discovery, Woolworths (I like them, they'll be there) or...erm... Steinhoff :D

Not sure if NPN is worth it at this price but will probably include it. So assuming an even 8 way split I need five more:

DSY
WHL
NPN
...
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Hamster

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Re: I want to experiment with dividends
« Reply #5 on: December 09, 2017, 05:27:03 am »


Quote from: Mr_Dividend on December 09, 2017, 05:18:17 am

But something like :: (what happens when you wake up at 04H00)  :))

amountPPSSharesExpected DYieldAmount Exp
tex50060283.0610317.1185.55
RES500140003.576234.4522.25
AVI500103104.854454.3221.58
CML50068827.274376.3531.75
SSS500124340.23957.6438.21
VOD500140593.568506.0530.23
WHL50057808.653135.4227.08
BHP250245561.0215006.1115.27
Balwin25050649.41407.9119.76
NWL500390012.823007.6938.46
BTI500900000.5629003.2216.11
5000346.26
Total Yield6.93

Quick and dirty  but will should get you 6%  yield - But will it's capital also grow at above inflation....

You're a beautiful man *sniff*

Thanks :)
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gcr

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Re: I want to experiment with dividends
« Reply #6 on: December 09, 2017, 08:49:23 am »
Quote from: Mr_Dividend on December 09, 2017, 05:18:17 am
GCR - so no capital growth with dividend paying stocks? - seriously, you been in the game long enough to know that. Don't recall making that statement - for dividends to grow share price would have to appreciateThe idea (or at least my version), would be to live on a healthy stream of dividend that increase at above inflation BUT also for your capital to grow at above inflation.

hamster - like any good portfolio, diversification should be front of mind. But first decide on the initial dividend yield required - the lower it is, the more choice.  At low amounts 3% - you could included some ETF's - but at higher 8% you going to have huge weightings of property.

Around 5% is probably a good percent to aim for - maybe 6%

Then you'll want a nice chunk of that in pounds/euro/dollars.

And of course - you want companies that have a history of growing dividends - or at least maintaining them during tough years. And if you need 5% - them aim for 6% to give yourself some padding.

But something like :: (what happens when you wake up at 04H00)  :))

   amount   PPS   Shares   Expected D   Yield   Amount Exp
tex   500   602   83.06   103   17.11   85.55
RES   500   14000   3.57   623   4.45   22.25
AVI   500   10310   4.85   445   4.32   21.58
CML   500   6882   7.27   437   6.35   31.75
SSS   500   1243   40.23   95   7.64   38.21
VOD   500   14059   3.56   850   6.05   30.23
WHL   500   5780   8.65   313   5.42   27.08
BHP   250   24556   1.02   1500   6.11   15.27
Balwin   250   506   49.41   40   7.91   19.76
NWL   500   3900   12.82   300   7.69   38.46
BTI   500   90000   0.56   2900   3.22   16.11
   5000               346.26
Total Yield   6.93               

Quick and dirty  but will should get you 6%  yield - But will it's capital also grow at above inflation....
Another issue with dividends is that taxes are now 20% off the total amount
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Patrick

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Re: I want to experiment with dividends
« Reply #7 on: December 09, 2017, 09:09:00 am »
Quote from: gcr on December 09, 2017, 08:49:23 am
Another issue with dividends is that taxes are now 20% off the total amount
Not foreign dividends  :whistle:
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gcr

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Re: I want to experiment with dividends
« Reply #8 on: December 09, 2017, 09:22:27 am »
Quote from: Hamster on December 09, 2017, 05:24:56 am
Bah, you guys are right! Ok, so "new plan"... I want to experiment with shares. I've got ETFs, Unit Trusts, a 32 day account and some crypto.

What I do not have are regular shares. So do you guys have one or two decent companies that you can point out that is not Discovery, Woolworths (I like them, they'll be there) or...erm... Steinhoff :D

Not sure if NPN is worth it at this price but will probably include it. So assuming an even 8 way split I need five more:

DSY
WHL
NPN
...
Hamster - what is your long term objective, once you know what you want to achieve then set milestones to achieve the objective - very business like but that's the nature of things
Also need to know how diversified you want to be with your portfolio and in what sectors
In my portfolio I have:-
AVI
BID
BVT
CLS
DSY
L4L
MRP
PIK
RFG
SNV (lightened my holdings yesterday)
SYG
TAS (much pain at the moment but still buying)
TRU
VOD
WHL
but then I have held many of them for years so have benefitted from an improving market
This week at the JSE Simon Brown spoke about Naspers and said that it's price is still likely to rise by virtue of its holdings in Tencent - and it expects it to appreciate substantially in 2018 but not nearly like 2017
Some people advocate doing research on shares - if that was the sole methodology then nobody would have invested in Steinhoff as you can't pin down the pieces within the business. Jooste/Wiese got it wrong putting together conglomerates - Joffe on the other hand got it right but then he came from humble beginnings back in the '70 and BID and BVT are successful businesses and I have the same expectation with L4L
Experience in the market is invaluable, but unfortunately that is something that takes time and substantial reading - if you settle on a company look at its subsidiaries and its management team and read selectively through their sens notifications over the last few years to get a sense of the companies direction.
To my mind the most important part of my evaluation is who the management team is how frequently they change directors and CEO's CFO's and COO's if they are stable then the company is likely to chug along on an upward share appreciation path   
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gcr

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Re: I want to experiment with dividends
« Reply #9 on: December 09, 2017, 09:23:48 am »
Quote from: Patrick on December 09, 2017, 09:09:00 am
Quote from: gcr on December 09, 2017, 08:49:23 am
Another issue with dividends is that taxes are now 20% off the total amount
Not foreign dividends  :whistle:
How do you account for them in your tax return?
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Hamster

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Re: I want to experiment with dividends
« Reply #10 on: December 09, 2017, 11:07:24 am »
Quote from: gcr on December 09, 2017, 09:22:27 am
Hamster - what is your long term objective, once you know what you want to achieve then set milestones to achieve the objective - very business like but that's the nature of things

This is a learning exercise and not at all an "important" part of my investments. I own no single shares so I want to get into it, learn, slowly build a portfolio maybe. Not interested in day trading, just long term holding.

I initially said dividends because that's one criteria to use to pick these shares but at my age capital growth makes more sense.

SO, this more like a "Share Forum's long term stock picks for 2018" thread :p
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Moonraker

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Re: I want to experiment with dividends
« Reply #11 on: December 09, 2017, 12:15:25 pm »
Hamster, you were on the right track with RES (check out their audited results for FY ended 30/6/17 look under "Prospects"). Then add SRE and NRP and the first 6 mentioned by gcr.

1 year return to 8/12/17 with dividends reinvested:-
RES = 36,7%
SRE =61,66%
NRP = N/A (due to merger with Rockcastle)
BID =29,22%
BVT = 19,3%
AVI = 20,18%
DSY = 37,42% (not on chart)
CLS=55,43% (not shown on chart)
(VOD 4,75%) Only for dividends - there won't be much in the capital gains department.

The chart shows pure capital gains without dividends reinvested...

« Last Edit: December 09, 2017, 01:13:20 pm by Moonraker »
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Hamster

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Re: I want to experiment with dividends
« Reply #12 on: December 09, 2017, 02:45:10 pm »
So basic research, forums the rest of the interwebs I've come up with this. 10 shares:

All right, so after some basic research and pulling data from threads on a couple of forums etc. I've come up with this:

AVI   AVI Ltd.
BVT  Bidvest Group Ltd
CLS  Clicks Group Ltd
SHP  Shoprite Holdings Ltd
DSY  Discovery Ltd
NPN  Naspers Limited
CPI   Capitec Bank Holdings Limited
KIO   Kumba Iron Ore Ltd.
RES  Resilient REIT Limited
SRE  Sirius Real Estate Ltd

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gcr

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Re: I want to experiment with dividends
« Reply #13 on: December 09, 2017, 03:03:00 pm »
H - seems a fair spread - one share may disappoint and that may be Checkers as one doesn't know what the fallout from Steinhoff may be. If Wiese has a fire sale on Steinhoff he may have to lighten his holdings in Checkers to prop up Steinhoff. He could also find a moneylender who may advance him cash based on his holdings in Checkers. All I am saying is that these guys are trying to juggle balls but they are all shaped like rugby balls so as they drop they could bounce anywhere. But hey that's all part of the learning and knowledge journey
 
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Hamster

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Re: I want to experiment with dividends
« Reply #14 on: December 09, 2017, 03:18:05 pm »
Good point, luckily this is small money so if there is a fall out the effects shouldn't matter in the grand scheme of things. If what you are saying affects future growth though, that's an issue :(
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