The JSE and finance forum for South Africa
General Category => Shares => Topic started by: Hamster on December 08, 2017, 03:43:01 pm
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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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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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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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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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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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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 - 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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Another issue with dividends is that taxes are now 20% off the total amount
Not foreign dividends :whistle:
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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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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 - 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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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...
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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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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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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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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
I saw your comment on Moneyweb, do you think that despite the options having been exercised, the conditions precedent may halt the investment in SHP?
The implementation of the investment in Shoprite is subject to a number of conditions
precedent as set out in the Pre-listing Statement, which include, inter alia, merger filings with
various African Competition Authorities. To this end, the filings are being completed and will
be submitted to the relevant authorities in the foreseeable future.
Shareholders will be informed once all the conditions precedent for the implementation of the
transaction have been met.
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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
I saw your comment on Moneyweb, do you think that despite the options having been exercised, the conditions precedent may halt the investment in SHP?
The implementation of the investment in Shoprite is subject to a number of conditions
precedent as set out in the Pre-listing Statement, which include, inter alia, merger filings with
various African Competition Authorities. To this end, the filings are being completed and will
be submitted to the relevant authorities in the foreseeable future.
Shareholders will be informed once all the conditions precedent for the implementation of the
transaction have been met.
Don't think these conditions are reversible but then again both Wiese, his son are attorneys
I would just wait and see what happens as Shoprite don't seem to have suffered any fall out as yet, but could affect those that were going to sell Steinhoff branded products through their Hyperama's
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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
That's a pretty good selection. I probably would change kumba to a more diversified miner - GLN has a lot of debt but has a lot of battery/EV resources (copper/cobalt/nickle) and would be my pick. Clicks is pretty expensive for a retailer IMO and would wait for a 15/20% pull back if possible. EOH, for me, is a bargain - but unfortunately market just does not agree :'(
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So many people recommended Clicks and here you come and ruin it for me :mad: :P
GLN you say? You're the second person to mention them not being the best pic. Somebody mentioned THA as well.
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So many people recommended Clicks and here you come and ruin it for me :mad: :P
GLN you say? You're the second person to mention them not being the best pic. Somebody mentioned THA as well.
Clicks is great - so far, very predictable, stable earnings - HEPS growth of around 15% per year. But is that worth a pe of 33? Nope. Maybe pe of 25 so around 13500 - on future earnings under 15000.
Think IF you going to pick up a miner then diversified is the way to go - both in markets and location. BHP would be my second(safer) choice, but prefer GLN's mix - but not their debt. That said, a few good years and that could come down a lot. I still would though be weary on what part they played in oilgate (or whatever we calling it..)
But ja. My crystal ball broke a long time ago when it comes to shares. I do think for most people a portfolio consisting of 2-3 etfs consisting of 75 -90 % of a persons portfolio + 5/10 companies the rest makes the most sense - and I might head that way for my capital gains portfolio.
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So... what if we replace:
BVT with BID
KIO with BIL
?
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Do the banks still issue share installments - in 2005 and up until about 2009 I used them extensively to grow my wealth and they were useful from the perspective that you only paid about 40% of the share value. You could also roll them over after the 12 month expiry period or buy the actual shares for the other 60%.
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Quite frankly, in a market like it is now, I wouldn't do any 'experimenting'. Remember elective conference, moody's towards end Feb, SONA and budget could all move the needle quite severely either way for different sectors ....
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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?
You use an exclusion ratio (55.6% of foreign dividends are excluded) and add the rest to normal income. That means unless you earn R1.5 million a year you'll never pay 20%. Here's where I wrote about it: http://investorchallenge.co.za/pay-less-dividend-tax-by-doing-this-one-thing/
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Okay, good to be reminded.
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I just don't understand how Capitec can be worth so much compared to the other banks.
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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?
You use an exclusion ratio (55.6% of foreign dividends are excluded) and add the rest to normal income. That means unless you earn R1.5 million a year you'll never pay 20%. Here's where I wrote about it: http://investorchallenge.co.za/pay-less-dividend-tax-by-doing-this-one-thing/
That's current circumstances - Gigabytes has to find about 60 bill (better than Steinhoff) so could well ramp up dividends tax and pinch a bit from foreign dividends - won't really know until February