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  1. #4521
    Senior Member
    Join Date
    May 2007
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    Auckland, , New Zealand.
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    782

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    Yes, 1% discount is correct.
    I also have a problem with DRPs. I like the discount and no brokerage. But I also like getting the cash so I can decide if I should be topping up on something else that has caught my eye.
    I good problem to have though I guess........

  2. #4522
    percy
    Join Date
    Oct 2009
    Location
    christchurch
    Posts
    17,221

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    Dividend Reinvestment plans do stop you having the choice of what you do with the cash.
    What suit one person may not suit another.
    As I was trying to build my exposure to the share market, I found the compound affect of dividend reinvestment worked well.
    At present time I take dividend reinvestment,where I can ,and I am still working ,so do not need the cash.My wife takes the cash.

  3. #4523
    IMO
    Join Date
    Aug 2010
    Location
    Floating Anchor Shoals
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    9,696

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    You need 2nd wife to work hard and bring home some bacon!!!

  4. #4524
    percy
    Join Date
    Oct 2009
    Location
    christchurch
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    17,221

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    Quote Originally Posted by Joshuatree View Post
    You need 2nd wife to work hard and bring home some bacon!!!
    With wife,two daughters and a granddaughter, I have put off my retirement for another 35 years.!!!!
    Daughters say, since wife and I started to receive super-an, they have no need to work!!! lol.

  5. #4525
    ShareTrader Legend Beagle's Avatar
    Join Date
    Jul 2010
    Location
    Auckland
    Posts
    21,362

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    I look at it this way. Suppose you're Joe average investor with say 10,000 shares. You get a dividend of $300 this time. Its not like most people would go and reinvest that dividend, (minimum brokerage being $30).
    Far more likely the Mrs would pounce on it and buy that lovely dress she saw discounted from $600 to $300 and then she'd probably proudly tell you she'd done a marvellous job in saving you $300 in the sale
    This is why not having the $300 in the bank account in the first place makes profoundly good common sense especially for couples with joint bank accounts lol

  6. #4526
    Member
    Join Date
    Nov 2013
    Posts
    365

    Default

    Quote Originally Posted by Roger View Post
    I look at it this way. Suppose you're Joe average investor with say 10,000 shares. You get a dividend of $300 this time. Its not like most people would go and reinvest that dividend, (minimum brokerage being $30).
    Far more likely the Mrs would pounce on it and buy that lovely dress she saw discounted from $600 to $300 and then she'd probably proudly tell you she'd done a marvellous job in saving you $300 in the sale
    This is why not having the $300 in the bank account in the first place makes profoundly good common sense especially for couples with joint bank accounts lol

    Being a new and small time investor the DRP is a great option for me. I have the luxury of not planning to need the cash from dividends from HNZ for the next 30 years or so (retirement fund). Should be a nice income stream by then and maybe some capital appreciation too.

  7. #4527
    On the doghouse
    Join Date
    Jun 2004
    Location
    , , New Zealand.
    Posts
    9,221

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    Quote Originally Posted by Roger View Post
    Wonder what the resident beagle makes of the increased provision for impairments...now 0.73% of all receiveables...compares to 0.1-0.2% for most of the major Aussie banks. I guess that's the price you pay for lending more to the consumer finance and agricultural sector...has to be some price when their net interest margin is circa double that of the Aussie banks.
    Still not sure what the best way to account for the bad debt provisions is from an investor perspective. A bank lending in the so called 'riskier' end of the spectrum will have a tendency for more bad debts. But with an interest margin correspondingly higher, that can more than make up for it.

    Perhaps I should take all the historical bad debt provisions. Then distribute those evenly across the annual profits of each year. That would produce a different profit figure than the banks declare each year. But maybe it would be more useful from an investor perspective? Comments?

    SNOOPY
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  8. #4528
    ShareTrader Legend Beagle's Avatar
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    Jul 2010
    Location
    Auckland
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    21,362

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    Quote Originally Posted by Snoopy View Post
    Still not sure what the best way to account for the bad debt provisions is from an investor perspective. A bank lending in the so called 'riskier' end of the spectrum will have a tendency for more bad debts. But with an interest margin correspondingly higher, that can more than make up for it.

    Perhaps I should take all the historical bad debt provisions. Then distribute those evenly across the annual profits of each year. That would produce a different profit figure than the banks declare each year. But maybe it would be more useful from an investor perspective? Comments?

    SNOOPY
    One would presume they're modelling higher level's of potential delinquencies from stretched dairy farmers this year, perhaps that's the reason for the increase in provisioning ? Or could it be increased provisioning in regard to Harmoney new loans ? IIRC there was some mention in the results presentation about closely managing dairy loans. I feel for some of the young sharemilkers, bit rough when you get such wild swings in the Fonterra's pay-out's from one year to the next. I'm not sure averaging historical provisioning across multiple years would generate meaningful insights. One has to presume they're modelling provisioning based on quantifiable information from one year to the next surely ?

  9. #4529
    Member
    Join Date
    Oct 2010
    Posts
    284

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    In relation to the HNZ dividend reinvestment plan, it is not necessarily a case of being in or not in. Participation can be partial. I was in 100% when the discount was 5%, and went to 50% when the discount was reduced to 1%. You can change your election online with Link Market Services up to the record date for a particular dividend, 19 March in the current instance.

  10. #4530
    Member
    Join Date
    Oct 2013
    Location
    NZ
    Posts
    244

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    $1.33 - what's happening?! Folks are getting an itchy finger?

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