How low are we going with gne. One of my 2021 picks . Thinking maybe can't get it wrong twice lol
Expecting the dividend stocks to get squeezed out even more. The RBNZ have another 3 increases penciled in by June 2022 and it doesn't look like inflation is going away anytime soon.
Disappointing year for GNE shareholders, myself included. Sometimes things overshoot to the downside and opportunity knocks.
Lets get real, most of these things sell for yield and no other reason so lets have a look at the prospective yield at $2.81.
First an overview of the prospective 2022 investment case from the brokers perspective and I note the average target price of $3.09 https://www.marketscreener.com/quote...957/consensus/
I also note the average broker is forecasting 18 cps in dividends https://www.marketscreener.com/quote...57/financials/
Previous dividends have been 80% imputed so that gives a company tax rate = 28% x 0.8 = 22.4% gross up rate for the benefit of imputation credits so gross dividends are
18 / 0.776 = 23.2 cps gross forecast dividend. 23.2 / $2.81 = 8.25% gross forecast yield for 2022
People use power no matter what the economy is doing so 8.25% for a fairly safe utility seems pretty attractive to me so I will HOLD and hope the recent correction is overdone.
If the correction continues $2.58 would give a prospective gross yield of 9%... Hmmm...I think I'd go seriously overweight at that level.
I did the yield calculations earlier this month on 19 December, see above. I think the shares are well underpinned by an exceptionally good yield for a utility at this level, (relative to expectations of where long term bonds are likely to be in 2022) and any further untoward fall is a buying opportunity. Certainly at around $2.60 I'd come out of my kennel and pin my ears back and really get well and truly stuck into getting more, LOTS more.
Last edited by Beagle; 30-12-2021 at 02:57 PM.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Reverting to the average gap between divie yield and 5 year govt stock …the gap had shrunked too much
I reckon 250 is a likely outcome
Hang in their beagle ….save up for that day
Ready to back up the truck and the trailer at that price. Bring it on.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
We have plenty of coal in NZ . It’s just a matter if the current government will continue to let them burn it , surely the Green Party aren’t happy about the current increase in use of it .
Reverting to the average gap between divie yield and 5 year govt stock …the gap had shrunked too much
I reckon 250 is a likely outcome
Hang in their beagle ….save up for that day
Gross yield of 8.25% @ $2.81 is a whopping 600 basis points above the 10 year Govt Stock rate. I think that's a compelling opportunity and I'm calling it for how I see it for 2022, you hoping for $2.50 as a price to action deployment of fresh or recycled capital is unrealistically low.
I'm warming up the truck and trailer ready to go on any untoward price weakness. There's no investment funds ESG money here, (for obvious reasons), so this is the stand out value BUY of this sector.
Last edited by Beagle; 05-01-2022 at 11:54 AM.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Sure as hell will affect China already affected with coal shortages resorting to cities with no power could see a reverse of Australian coal ban.........
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Originally Posted by Dlownz
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