Dividend Stocks

[ENP]

http://www.topyields.nl/

What's everyones opinion on dividend stocks?

[shasta]

http://www.topyields.nl/

What's everyones opinion on dividend stocks?

If you look at say the NZX, most of the top 10 - 20 companies pay dividends as they are largely mature companies ex growth phase, with low Capex requirements (ie, minimal reinvestment into existing business operations + not expanding offshore etc), & with the main indexes closely followed by institutional investors, they seek income/returns by way of dividends.

Personally i'm not in favour of companies paying out dividends, & i'd rather they used the cash wisely to expand or acquire.

If a Board of Directors cannot achieve better returns on shareholder funds than say paying out a 5 - 8% dividend you would have to question what value they actually add to the company (given Directors fees are usually quite generous)

Dividends are also not a tax friendly method to treat all shareholders equally.

My priorities for a company with surplus cash would be:

1. Reduce/Pay off debt, Refinance Bonds
2. Fund organic growth/M&A (Looking for earnings accreditive acquistions)
3. Buyback own shares/convertible notes, especially if the share price is not reflecting it's "full intrinsic value" as per the BoD
4. Pay Dividends (Only if fully imputed)/Make Capital Returns (if tax free)

If you follow Snoopy, he invests on the NZX into dividend paying companies, as he requires the income.

You might want to check his threads on TEL, LPC, RBD, SCT, TUA, (from memory)

[Snoopy]

If you follow Snoopy, he invests on the NZX into dividend paying companies, as he requires the income.

You might want to check his threads on TEL, LPC, RBD, SCT, TUA, (from memory)


My current dividend income is mainly supplied by RBD, SKC, TEL and TUA.

I have bought into others for their dividends in the past. But over last couple of years LPC (rebuilding wharves) and PGW (debt blowout with GFC) and SCT(appliance downturn) have all cut their dividends drastically. As always I take the opportunity to top up my shareholdings when prices are low.

SNOOPY

[Snoopy]

http://www.topyields.nl/

What's everyones opinion on dividend stocks?


Often a company has a high dividend yield becasue it is in some distress. Before investing you should figure out the dividend cover to see if the dividend can be sustained in a downturn. Then check that the company doesn't have any debt refinancing issues.

That web reference specifically mentions Telecom NZ, and you probably know something of the regulatory issues around that. Nevertheless at $2.20 and assuming a reduced 20c annual divvie with imputation being restored, I think TEL is a buy and I topped up myself at that price last Friday. Telstra has paid three half year dividends in a calendar year so is further up that list than it should be.

SNOOPY

[ENP]

So this is what Kiyosaki says when he invests for cashflow?

i.e. buys when prices are low and for the dividends?

[ENP]

Oh are the capital gains taxes different in the USA?

[OldRider]

Always remember that cash flow is king, and that
dividends have to be paid in cash, so one knows
a company at least has that much real money to spare. Profits don't necessarily
produce any cash flow, and can disappear more quickly than they came.

[macduffy]

Always remember that cash flow is king, and that
dividends have to be paid in cash]

But beware of companies that have their dividends underwritten in conjunction with a dividend reinvestment scheme to the extent that new shares are issued to the underwriter for the total dividend amount and no cash is actually paid out!

Tend to see it occasionally with Australian companies.

[bung5]

What are peoples top dividend stocks? Been having a look at some but none of them have much else to sell in terms of growth.

[bung5]

ahh yeah I was buying other cheap no divvie stocks at that time and soon want to start converting some of that into divvie stocks. Just got into PGW hopeing divvie returns this year and should be yeilding good.

[buns]

What are peoples top dividend stocks? Been having a look at some but none of them have much else to sell in terms of growth.

Think about it.

Why would a company pay out cash if there were opportunities to invest in high returning projects? They won't, and if they do they are stupid.

Hence companies who have no projects to invest in/no growth will pay dividends.

This is why you see no growth in your dividend stocks.

Simple.

[bung5]

Have added another TTK . Great dividend and has opportunities for slowly but surely growth

only downside is quite a small market cap @ 50 million

[gonzo56]

Great post KW. Wow you have done well for yourself. I believe this is the thread: Great-Dividend-and-Growth-Stocks (http://www.sharetrader.co.nz/showthread.php?8348-Great-Dividend-and-Growth-Stocks/page3)