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Re the PE….
SP/EPS 190p/4.4p (0.06USD) = 43. Or adjusted Pe (after fx) = 190p/2.9p(0.04USD)=65.5
Caveats the first includes capital swap to pay for derivatives of $37m. The second doesn’t include fx gains, yet.
This is the problem with pe. Don’t assume low is good. It could be a reflection of a declining business model or high is bad. It could be debt repayments, capex assignments etc. you have to look beneath the numbers.
The golden indicator re cash is increasing FCF for an INCREASING divi after all else is paid for…..
This will do me!
“ Shareholder returns
? Second quarter dividend of $29.30m or 4.465 cents per share, to be paid on 10 September 2021
? Including today's announced dividend, a total of $411m has been returned to shareholders since listing via dividends and share buybacks
? The Directors continue to expect to increase the dividend annually by 10% ”
This has been imo overlooked by the market where analysts just take headlines.
Usual caveats
Trek
Hi Trek, thank you so much. Really really interesting and much appreciated. Thought my financial trading knowledge had improved a lot over the last year or so but am a total amateur compared to you ! I am very much looking forward to the results. I also have watkin jones who report next week who have been very good for me so far. One mistake I perhaps made this week is that I sold Ferro given what is going on with Russia and Kazakhstan is very much in its orbit. Gone flying since but we will see . Thank you once again and have a great weekend
Hi Sam,
That is the problem with many publications. They are often run by bots and not updated accordingly. Morningstar is notorious for having out of date major shareholding’s.
Divi cover is (was) 1.9x. It likely same or better now based on increased revenues for Spain and cost improvements in Brazil.
Have a look at the company presentation and interims 6th Aug...
“Second quarter dividend of 4.465 cents per share, equivalent to 3.203 pence per share[3], to be paid on 10 September 2021, reflecting our commitment to a 10% year-on-year growing dividend supported by our strong and visible cash flows. Dividend cover remains strong at 1.9x[4]”
[4] Dividend cover of 1.9x, defined as LTM Parent Company Free Cash Flow divided by declared dividend.
Also some quite correctly mentioned the debt which is likely putting a ceiling on this.
Is gearing is serviceable that is the question. The other is corporate debt structure. We fortunately have a mix of CLN’s and fixed rate bonds. Some are LIBOR or Eurobond + so vulnerable to rate increases but the majority is fixed. Also some was being paid down and some expired in Dec 21.
Worth not the debt structure is spread with plants having an independent financing structure that protects the other group assets. Borrowings $458m down from $487m during period.
As for the pe I think we will get a better view in March but I have seen ranges of 345 - 150. I can’t get my head around how this would be trading at anything like 200 x earnings. Doesn’t make sense.
Usual caveats
Trek
Hi Trek, delighted your kind reply to me got such nice deserving reviews. I have been reading further and contour appears to have a PE ratio of circa 145 .1 and dividend cover of 0.12 . I got these figures from the this is money webpage. Wondered what your thoughts were as at first glance they don't look the best. Best wishes and have a great weekend, Sam
Never commented before but this is so good from Trek I have to say, thank you. Humble, comprehensible for all and useful.
Trek
Shame more don't post in a similar vein.
Trek:
Thanks for the good balanced post and totally agree. Added a modest amount yesterday and again today as the dividend is 5x what you can get in bank interest - and there is the chance that capital gain will appear if you want to take it. Guidance was raised yet again and the Brazil Wind divestment may be not long in being concluded and announced.
Hi trek, thank you so much . Am an amateur investor compared to your good self and have much smaller funds invested. Was not aware of the data you have kindly shared. Strongly believe though this is a good buy. Unfortunately further funds do not become available until end March
Sam,
The divi is 6.75% at this price.
The fall today is in line with its current trading range, 180-210. It’s performance is inline with other independent power producers since 1st Jan.
You can see the peer comparison here...
https://www.marketscreener.com/quote/stock/CONTOURGLOBAL-PLC-38649308/company/
You will also note the shareholder distribution. GLO only has a 20% free float. Excluding shares in treasury.
Following the last buy back of 16m shares that leaves them below the 25% market threshold. However, as part of the ‘Primary Markets Effectiveness Review’ that is set to change to 10%. The FCA are transitioning it atm.
https://www.fca.org.uk/publications/policy-statements/ps21-22-primary-market-effectiveness-review-feedback-and-final-changes-listing-rules.
It will also impact mcap thresholds for full listings. £700k becomes £50m is my interpretation at a glance, there are other changes.
https://www.fca.org.uk/publication/consultation/cp21-21.pdf
But for GLO it will open the door again for another buy back.
Brandt said that the best thing GLO could do with their cash was to buy their own shares. Or words to that effect.
Whilst an investment here is not likely to show huge capital gains (but you never know) it is a solid income play. Using some basic TA will show you the support levels and any buyers adding sub 190 are imo in bargain territory!
It’s not unexpected to see a dip now and the SP pick up again ahead of the results and divi announcement on Mar 18.
It’s amazing the intel one can get for free now on the internet to empower folk to make their own investment choices!
Usual caveats
Trek
Bought more. Dividend just so good . Sold some braemer shipping with a dividend of 2.9. Here its 7.7 . no brainer as i want more income
Does anyone on this fine board have any thoughts re this ? Sam
Thank you Trek and others for your thoughts . We already also have L and g and bp. I would like more of both but beginning to be cautious given they have risen rather well.
Cut off....
From link....
https://www.dividenddata.co.uk/quarterly-dividends.py
Usual caveats
Trek
For income atm I only have GLO. Others are on my watchlist again. I am overweight GLO with 55k shares now. At times I haven’t been able to buy 1500 shares as the liquidity is difficult but I can usually sell 10-50k.
Whilst GLO won’t match some of the others mentioned in terms of capital growth I think it has a more reliable divi. I have enough growth in my pf and am only interested in income.
I still have concerns with contagion following evergrande. Insurers and banks are mainly at risk. They just can’t help themselves when the smell a high yield!
There are now around 12 Chinese property developers overdue on debts. Evergrande alone is $300bn outstanding! Someone somewhere will eventually come a cropper and then others will declare the impact. It’s just a question of time. Hence I am staying away from banks and insurers for now. I note PHNX 6.6% holder selling out by way of book build. That was one of my favs. I have traded it well.
However, for income I prefer quarterly divi’s as it makes the SP less volatile than the bi-annual stocks in terms of re-basing following the x-divi. I also spotted during covid that whilst they may have missed or reduced one payment. It didn’t necessarily affect the others.
Now is imo the time to buy GLO.
Dec, Jan, Feb are relatively quiet. Then there is the preliminary results and q4 divi declaration on 18th March. The 4 divi’s then come relatively quickly together.
My view is guidance will be nearer $840 than $800 as they have enjoyed continuous tailwinds from fx and energy costs.I expect the SP to be in the 212 region in March.
That means buying now gives you a divi cushion when the 3.2333p divi comes off which could be a 5p off hit OTD. However, the trend with GLO thus far is it recovers the divi hit pretty quickly or even on occasions the divi doesn’t come off the SP.
If the prelims are good there will be no need to knock the divi off and the SP could actually rise a little. We’ll see.
In terms of quarterly payers. These have made the first round of my filters.
APF, BP, CMCL, GLO, GSK, JIM, WINK, PAY, PGH, SMS, ULVR
I will be timing some selective buys with TA. That’s why it helps to have a few to spot even though I may only buy two. I bought PAY at 605p but sold it again last week. Likewise GSK I sold. GSK I find it pretty ‘easy’ to trade nibbles with because if you get stuck I don’t mind holding it.
The eventual idea is to buy and hold. When I get the price right and the companies credentials and macro align I will build a position. However, one often spots trading opportunities as well. I tried to get PAY below 600 but took 605. I am waiting for more regulatory clarity before buying and holding for longer.
You may have used this link before. It lists all the divi payers, dates etc. You will need to get the divi cover, pe and historic divi’s etc from the HL site. I find that the easiest to cut and paste from
https://www.dividenddata.co.uk/quarterly-dividends.p
My Hi-Yield portfolio includes PAF, CEY and POLY in addition to GLO and DLG. Recently added i3e for an initial maiden 8% gross yield payable this year (minimum stated).
I of course also hold GLO which at the current SP is about 4.6% of my portfolio.
Sam
I'm not saying now is the best time to buy, or even that they will suit your risk levels, and I do hold all the stocks I'm about to mention, so may be biased. They have been good to me not only for the dividends but I just got plain lucky when I bought the stock, so the dividend returns in relation to my investment is generally better, if that makes sense.
LGEN, ADM, DLG, RIO, PHNX, AV., and BP.
I have no intention of selling any of the above stocks unless of course their long term financials take a turn for the worse of course.
Together they represent about 45% of my portfolio.
Which other four dividend companies do you like ? We also have anglo pacific and bp but am looking to invest in others
I entirely agree. The rns puts so many other companies to shame. Clear and concise dividend and reporting dates for the whole year. Speaks volumes for how good this company is. Will be adding.
RNS’s not listed here today.
https://www.londonstockexchange.com/news-article/GLO/reporting-and-dividend-payments-dates-for-2022/15281924
If anyone knows of a company paying a +6% QUARTERLY divi with a 10% yoy increase or even close. I’d be interested to know.
I have a spreadsheet now with all the quarterly payers. How often and how much it increases, cover, BoD, risk ratings, SP vix etc and none come close to GLO.
Usual caveats
Trek
Guessing this mornings rise is due to the change in the markets view of Omicron.
As intimated in my earlier post look at the insurers down today.
Meanwhile GLO closes above 190 thanks to another UT trade at close.
And we have a safer, higher divi than most plus it’s quarterly!
Usual caveats
Trek
Hi O&W,
MNG made a H12021 after tax loss of £248m compared to a profit of £826m in H12020. Personally I think they will turn a corner now having stemmed client outflows. They are also on track with transformation and have some new eco funds that, as you know, are all the rave with retail atm.
However, my concern for all insurers and banks is exposure to China. The Chinese economy imo is sick. We just aren’t being told how sick. Following Evergrande’s failure to meet debt repayments and now 12 other property companies heading towards bankruptcy with state cover up we don’t know how sick the animal is.
Whilst insurers and banks have much better solvency 2 cover and have weathered stress tests that doesn’t mean they could sustain another shock that is like 4 x the size of Lehman...
That would soak up a lot of the buffers!
The thing is they just can’t stop themselves investing in junk if the returns look attractive. The bonuses and the income are just too tempting. Even without direct exposure the world is at risk from a Chinese recession. It’s all interconnected.
Give this a listen... it’s a recent vid which touches on the contagion risk. Real companies that have now defaulted can’t pay debts to local govts. They are fire selling assets to cover losses and make payments. The total debts outstanding are heading towards a trillion USD now!
China is embarking on a huge QE program to get money into the system it’s all very precarious.
https://youtu.be/ItN37fjVBjA
There are plenty of similar vids on YouTube.
Usual caveats
Trek
I think the key with these high income equity plays is to construct a well diversified mini-basket of them, by industry sector, and then to populate your mini portfolio with what you consider to be those with the best chances of safeguarding the dividend in harsher times. Of course, having the ability to grow the dividend at or above inflation is an added appeal of the best. That's where GLO shines brightly. I own 3 gold miners In that category, paf, cey and poly.
Spooky you mention MNG. I bought 6305 shares last week(13th). Unfortunately I paid £1.9433 including taxes etc., so higher than you suggested. As I think I've mentioned before I already hold LGEN and AV. I hold RIO also for the dividend, and though they may suffer a little short term I think like GLO, they are a solid long term hold.