HGH - Heartland Group Holdings

[mouse]

The whole question is, what is the dividend this year? If we get a 6 cent dividend I will be over the moon, as will the share price. I think it far more likely to be a three cent dividend, one cent interin, two cent final. Three cents might move the share price, but I doubt it. Plus bank shares around the world seem to not be in demand. We have lots of sellers at 70 cents. There will be more at eighty cents. And that is the problem, people do have a memory and those who were badly burnt might not have further appetite for a barbecue. I think Heartland is OK, but time has to pass before the share price recovers. Which means its a hold medium term if you own Heartlad shares at present.

I considered buying late last year. I decided not to based on the unknown costs (on-going and one-off) of bank registration, the amount of loans they must have in Canterbury that are still the subject of claims, and the cost of new branches and consolidation of others.

I like the target market they are aiming at. I don't know if they have the economies of scale to prosper in an all out mortgage war between the majors.

Will keep an eye on them, but suspect they will plod along for some time yet.

[winner69]

I strongly doubt a growing company would be paying out a 10c dividend which on current SP would be 15% yield.

I would suggest a 4-5% dividend on today's price, which would suggest around 3c.

At that rate you would be better putting money in HNZ than owning it ... at least this year

Just winding percy up

still can't see why you guys think it so important to give most of the earnings away as dividends .... surely with a target of achieving 14% ROE you are better off letting them using your money .... unless you have better investements erning more than 14% pa .... and if this is case why be in HNZ in the first place

[mouse]

The problem is, most investors in Heartland originally put their cash in to get an income stream payed every six months. So it is not just important to pay regular dividends, it is essential. Three cents annual dividend should hold the share price where it is, or may even persuade it a bit higher. We just have to wait. Another two years or more.

At that rate you would be better putting money in HNZ than owning it ... at least this year

Just winding percy up

still can't see why you guys think it so important to give most of the earnings away as dividends .... surely with a target of achieving 14% ROE you are better off letting them using your money .... unless you have better investements erning more than 14% pa .... and if this is case why be in HNZ in the first place

[winner69]

I'm not sure a higher dividend will drive the price up. If you want a dividend play, there are better stocks like TEL, HLG.

For what is a smaller company, and technically a young company, the share price will be driven higher by the likelihood of future earnings growth. In the end, people will pay more in expectation of better profits in the future.

A smallish dividend though will attract some investors who need the comfort of the money coming through every six months. Arguably it also prevents directors and management from getting dangerous ideas in having too much cash lying around.

But if they kept all the earnings and still made the promised (sorry targeted) 14% ROE all the cash would be working hard growing the company by lending out more and more

Shareholders would be better off in the long term if all earnings (no divie) are reinvested at 14% - shareholder equity would double in 7 years ... and go up at a faster rate

[percy]

But if they kept all the earnings and still made the promised (sorry targeted) 14% ROE all the cash would be working hard growing the company by lending out more and more

Shareholders would be better off in the long term if all earnings (no divie) are reinvested at 14% - shareholder equity would double in 7 years ... and go up at a faster rate

Now look here winner69,I have told you before HNZ depositors and investors are NICE PEOPLE, and here you are trying to turn us into greedy capitalists.Very naughty of you.!!!

[mouse]

Brilliant, Percy.

Now look here winner69,I have told you before HNZ depositors and investors are NICE PEOPLE, and here you are trying to turn us into greedy capitalists.Very naughty of you.!!!

[percy]

Long term investors in HNZ shouldn't be talking up divies to "hold the sp up" - until there is a capital gains tax in NZ I want every, and I mean every!, cent invested in growth!

You are most probably right.Each $16mil of net profit gives them the capacity to fund an extra $100mil of lending while retaining their 16% equity ratio. Compounding growth from retained earnings certainly adds value to any company, makes dividends seem a waste of valuable capital.

[SCOTTY]

You are most probably right.Each $16mil of net profit gives them the capacity to fund an extra $100mil of lending while retaining their 16% equity ratio. Compounding growth from retained earnings certainly adds value to any company, makes dividends seem a waste of valuable capital.

If your capital is so valuable to you, why not rent out your house and go and live under a bridge . Some of us need income to live on .

[percy]

If your capital is so valuable to you, why not rent out your house and go and live under a bridge . Some of us need income to live on .

Sold the house awhile ago.Dam noisy under the bridge.More cars going by all the time,with car sales going gang busters. MARAC must be doing really well financing them.

[winner69]

If your capital is so valuable to you, why not rent out your house and go and live under a bridge . Some of us need income to live on .

Could sell a few of your shares each year for income ..... the way we are talking they will worth at least 20% more each year anyway and you will still ne heaps better of then taking divies