Nothing wrong with falling in love. Might not be so wise to fall in love with a share though.
SNOOPY
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I meant ANZ looks the better investment from today. Never said the same five years ago. Not much point in investing looking backwards from what I can see.
I notice you left out dividends (yet again). Of course it doesn't matter from a Heartland perspective, because more capital has been poured into that business structure than has come out as dividends over the last five years.
SNOOPY
Dividends.
My post # 425 on ANZ thread.
Dividend growth since 2014.
ANZ....Minus 4.5%..............
HBL.......Up....71.66%.
EPS growth,ROE growth,dividend growth means HBL has had outstanding share price growth,which you have missed.
Strong organic growth has seen HBL use up their excess capital.New capital will see further growth,while ANZ has had to sell of bits to shore up their balance sheet,which means they have little or no eps growth,so there certainly will be no increased dividends.
I reckon H1 profit will be $28.8m (they did do $14.2m in the first quarter) ..... and Jeff will say FY will be at top end of previous guidance
FY really should be over $60m but they'll manage to keep it to that $60m plus or minus a fraction - remember they always deliver on want they said they will do. Wouldn't want to go overboard would they
I thought as much. But what you did:
1/ Find a yield you are happy with.
2/ Multiply (1) by a gross dividend in cents that you choose
to obtain
3/ The share price
is a legitimate way to use the Dividend Capitalisation Valuation method. The yield that you choose is a judgement call. The dividend you use could be historical, forecast or some kind of multi-year average. So the dividend is a judgement call as well. And that means the whole valuation method is a judgement call. But there is nothing wrong with that, provided you sincerely believe that your own judgements are representative.
SNOOPY
I have a bit more to say about my $1.42 valuation. This will be obvious if you understand what 'business cycle average' means. But time to state the obvious.
Assuming my valuation is correct, the chances of Heartland trading at that value on any particular day is very small. If $1.42 is the average, then about half the time the share should be trading above that average and half the time the share should be trading below that average (as a general rule of thumb). Whether it trades above or below depends, where potential shareholders see Heartland going in the next couple of years in relation to the business cycle. A business cycle is not something with a smooth upward and downward progression. So it is not unusual to have lumpy share price movements over time that reflect this.
Just because I wouldn't buy Heartland today at $1.55, that doesn' t mean that I would sell it if I already owned it. For a start, Heartland is a good dividend payer. Sticking Heartland money in a 2% cash account is not a great alternative strategy. And although I regard Heartland as overvalued at present, it is not noticibly more overvalued than the rest of the market. My strategy, if I held Heartland, would be to keep holding. It would only be if the overvaluation became excessive that I would consider selling down. I would add on the upcoming dividend (3.5cps it was last year) to the fair value share price ($1.42 + 20%) and look at lightening my holding if Heartland became 20% overvalued from that figure.
That corresponds to a price of ($1.42 x 1.2) + $0.035 = $1.74
That's the figure I would be selling down from.
SNOOPY
Definitely makes sense having a sell price 20% higher than whatever the current share price is. :confused:
Though I would not complicate it by adding in the theoretical next dividend.
Best Wishes
Paper Tiger