Contact Energy - CEN Chart

[troyvdh]

I thought this whole issue i.e. CEN vs MRP...being kind-off equal total value wise..et al has/is being thrashed out on the MRP site....some good stuff there....cheers

[iced]

For a fully diversified portfolio, wouldn't one want some degree of diversification within sectors? I guess this would probably apply more to larger investors..

Regardless of pricing or fundamentals etc, wouldn't owning both CEN and MRP offer exposure to utilities/power generation, but smooth out performance between years with high rainfall / drought years?

[CJ]

For a fully diversified portfolio, wouldn't one want some degree of diversification within sectors? I guess this would probably apply more to larger investors..

Regardless of pricing or fundamentals etc, wouldn't owning both CEN and MRP offer exposure to utilities/power generation, but smooth out performance between years with high rainfall / drought years?

If we had had floods in the north Island instead of drought, I think people would be buy MRP, sell CEN.

[fish]

If we had had floods in the north Island instead of drought, I think people would be buy MRP, sell CEN.

That would be a big mistake.
Sell both and buy fletcher building would be good advice

[Arbitrage]

In a flat electricity market I suppose it would be a more balanced approach to buy both if there is a see saw effect on returns between the two companies. Lets not forget the potential for Origin to go for the full takeover...

[RTM]

I wonder if someone can help me. Considering buying some Contact shares. Will probably hold indefinitely, so am trying to understand what the dividend looks like. Looking at NZX site I see this info:

Ex Dividend Period Amount Supp. Imputation Payable Currency
06-Mar-13 Interim 11.000c 1.941c 4.714c 26-Mar-13 NZD
24-Aug-12 Final 12.000c 2.118c 5.143c 21-Sep-12 NZD
02-Mar-12 Interim 11.000c 1.941c 4.714c 30-Mar-12 NZD
01-Sep-11 Final 12.000c 2.118c 5.143c 27-Sep-11 NZD
09-Mar-11 Interim 11.000c 1.941c 4.714c 31-Mar-11 NZD
01-Sep-10 Final 14.000c 0.000c 6.000c 27-Sep-10 NZD

The Gross Div Yield (NZX Site) is 6.096%. How can I understand this 6.096% from the information above ? What will I actually get in my bank account. Note: Have very little other income.

Thanks in anticipation for any help I might get.
Cheers.

[macduffy]

The first thing to note is that the NZX info is historical and that previous dividends, while to some extent a guide, aren't necessarily what will be paid in future!

The interim div paid on 26 March last was at the rate of 11cps. This amount, less a small withholding tax deduction (around 4% of the amount, in my case) was paid into my bank account, ie around 10.5cps. Imputation credits of around 4.7cps were "attached" to the dividend, giving a gross dividend of about 15.7cps. The Gross div yield quoted is probably the sum of that amount, plus the previous equivalent final div gross amount, expressed as a percentage of the shareprice. Note that the benefit of the imputation credit only accrues if there is other tax paid income to set it against.

Phew.... I hope that's understandable and reasonably accurate. No doubt someone will correct/clarify if not.

Cheers

[toucan22]

For the dividend payouts:
26-mar-13 - 9.9 cents net per share
21-sept-12- 12 cents net per share
30-mar-12- 11 cents net per share
I believe that Imputation credit will be of tax benefit to you but I leave that to my accountant.
Hope that helps.

[QUOTE=RTM;400476]I wonder if someone can help me. Considering buying some Contact shares. Will probably hold indefinitely, so am trying to understand what the dividend looks like. Looking at NZX site I see this info:

[Snow Leopard]

...
Ex Dividend Period Amount Supp. Imputation Payable Currency
06-Mar-13 Interim 11.000c 1.941c 4.714c 26-Mar-13 NZD
24-Aug-12 Final 12.000c 2.118c 5.143c 21-Sep-12 NZD
...
Cheers.

So from above 6-Mar-13:
11c is the 'cash' component and 4.714c is the imputed component (tax already paid by the company for that 11c).
(You can ignore the 1.914c supp if you are a new zealand tax resident, that is only for people like me).

So your gross (before tax dividend) is 11+4.714 = 15.714c

Add in the 12+5.143 = 17.143c dividend for Aug-12 and the company has paid out a gross of 15.714 + 17.143 = 32.857c per share for the last year.

Divide that by the current share price of 539c and your get 6.096%.

Without a long discussion of imputation credits and tax if your overall tax rate (tax due/gross income) is less than 30% you will get the 11c+12c and may be able to get a refund on other tax paid. (Note if you, like macduffy get 10.5 of your 11c then that should be repaid at the end of the year by the IRD).
If your overall tax rat is greater than 30% then the IRD will want a little more money off you.

Think that is still correct but I have not actually been NZ tax resident for a few years.

Best wishes
Paper Tiger

[Banksie]

I have just been trying to figure this out reading the IRD site (http://www.ird.govt.nz/business-inco...tation-basics/). What you said sounds right Paper Tiger.

From 31 March 2013 the maximum imputation credit will be 28% (previously it was 30% and that is what CEN used 15.714 * 0.3 = 4.714).

If I am not mistaken the calc for macduffy is:

Dividend + Imputation Credit - 33% RWT
11 + 4.714 - 5.185 = 10.528c

If my maths is holding up then I figure an equivalent dividend next year would only net you 10.236c

11 + 4.277 - 5.041 = 10.263c