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Going exdiv next week and this is still dropping on an up day, makes you wonder how low this will drop after exdiv, not sure why it's gone like this, it used to do well on approach to the big dividend
Down down deeper n' down. The FTSE is up 1.65% in 2024, compared with LGEN down 2.22% in the same period. Given that the share price usually drops by more than the dividend (now taxed at 8.75%), this stock is classified IMO as a basket case . Nigel knew when to get out, with quite a few million to boot.
Legal & General Group PLC (LSE:LGEN) and M&G PLC (LSE:MNG) are rated as ‘buys’ amongst the UK’s life insurance market, as analysts at Deutsche Bank highlighted its expectations for growth.
DavidBrent, you are right on one part GB being unattractive to invest in hence stagnated FTSE for last decade+. Investors take the risk then HM government plunder most of the profits. Bodes the question why invest? Not to bad for us small investors using ISA`s but not attractive for the institutions. Even small investors are fed up with Gov greed.
Does anyone have old premium bonds bought for them as a child? I have been trying to sell £17 of them using NS&I. 12 weeks and still not resolved. Another Government dept not to be trusted.
A 250p share price will generate an 8.3% yield this year. Perfectly happy with that, although I appreciate that my decent rate of return does not tally with everyone.
Yep if this gets to the mid 250s before div,I'm off, my modest, worst Bank account outperforms this. I think that's quite a worrying statement really. This is a very decent company, but investing in GB is so unattractive this days that even a decent company can't give you a decent return.
I guess im being greedy as have already had an early dividend in january as sold the lot and then bought back in the low 230s, I did think they would be higher today but the ftse is ready for a fall I think as predictable as the rain, that always has an effect on this so dumped them all today taking another profit, have topped up my mng and phnx whilst they are in bargain territory, will look at this again after ex and give it some time to settles down, I hope all who stay get a lovely rise pre ex but ive done ok this year with this to quit it a bit early,GLA
You are bang right there Nick, Dividend vs SP has not added up for a while, years in fact imho. falling interest rates should help but still just seems out of favour. Where can I get near 10% in a bank? The company looks very healthy and I will continue to add to share ISA keeping the Gov,s sneaky fingers away from any gains. GL.
Im Hoping for decent rise into the ex div date
We are truly in a pathetic place regards the sp, for what you gain regards the div the value just doesnt add up
I've added today, my plan is to add the same amount during the summer, collect the div on todays and sell once back at this level (when ever that happens). If/when the BoE drops rates div shares will start recover (IMO).
Agree with you Eccles. I'm reading £2.30 with the divi due for payment in 7 weeks. = nearly 9.3% forward dividend. I'm only hesitating because i have so many already. Maybe just a few more?
Enabled me to buy another bunch of shares for a good price in advance of next week's exdiv date.
Our new CEO said he would need until June before he could offer an informed statement about this company. From what Eccles04 has confirmed bearing in mind his depth of knowledge of the profession, our new CEO seems to have started well and I wish him all my good wishes. That was June 2024, I hope!!
As I have said before and I am a retired qualified accountant, we now have some accounting standards which are beyond the easy comprehension of the man in the street. This ought not to be and the "accountancy bodies" responsible should be ashamed of themselves and repent. The only way to properly establish the true value of any asset is to sell it in a free market and all so called valuations are mere conjecture (fact). In an English court of law conjecture (guess work) is not permitted and will always be dimissed by learned judges and yet businesses such as L & G are being forced to apply such doubtful "principles". It is not surprising then that application of these rules are almost impossible to understand by most people and the results can vary hugely from one week to the next; they are in fact absolutely crackers.
Thank you
20questions - that site isn't incorrect. It's just not correct.
The way that lists companies have to produce their "results" is determined by a set of accounting standards called IFRS. These standards require that companies value all of their investments and holdings at the market price at the time of reporting. (This is called "Mark to market".) Any difference since the last results has to be reported as a profit or loss.
So, if LGEN has £5bn of property assets that, because of market conditions, are now only worth £4bn then they have to knock £1bn off their reported profits REGARDLESS of whether those assets have, or will ever, be sold.
As a result, the "profit" number in the results is the "operating profit" (simplistically, what they charged for their services minus their costs - their "real" profit) PLUS or MINUS any adjustments for the value of the investment holdings (and other accounting standards adjustments for stuff like pensions, etc)
Sites like DividendMax and DividendData take this second, adjusted number to calculate the dividend cover and payout ratio.
Dividend cover and payout ratio pre-date the accounting standards changes that have now fundamentally broken them unless you calculate them yourself.
Hope that helps.
I would assume that the 0.69 dividend cover (if it's correct) is based on statutory earnings. But those are based on accounting rules that don't necessarily do a good job of estimating profitability, especially for some sorts of companies. I believe LGEN's statutory earnings were significantly reduced last year because of a fall in asset values. But that can just be the result of market ups and downs that don't affect the company's ability to pay dividends.
"Apologies and I bow to any greater knowledge but I thought L&G although has an excellent growth history on the divi were not in the best place to continue. Divided cover 0.69 and payout ratio 146%??
I'm no genius but if the good people here can explain it would benefit myself and other less learned investors."
Others will be able to explain better but the website you link to basically doesn't capture the earning power of L&G as there has been new accountancy standards introduced which have clouded the reported figures. The new rules change when an insurance company can record a profit (moving away from day one when the policy is written). Basically, the underlying business is profitable and can cover the growing dividend. It also has a large surplus of capital it can turn to as and when needed to fund the dividend.
https://group.legalandgeneral.com/media/cftjqa2g/an-introduction-to-ifrs-17.pdf
Divi well covered. Here's some key data:
Operating profits (before adjustments) are at £1.66bn, with organic capital generation covering the cumulative dividend payment of £4.5bn, with £0.8bn to spare.
I hope this helps for now.
Apologies and I bow to any greater knowledge but I thought L&G although has an excellent growth history on the divi were not in the best place to continue. Divided cover 0.69 and payout ratio 146%??
I'm no genius but if the good people here can explain it would benefit myself and other less learned investors.
https://www.dividenddata.co.uk/ex-dividend-date-search.py?searchTerm=Lgen
Fatherjack that is my strategy also. If SP follows last year I will reinvest divi at sub 220p, easy money. There is also a faint possibility there could be a take over of Lgen at them low prices which will be missed if not owning shares. just a thought and not advice.
Are you kidding re the dividend? They have the next 6 years profits already booked and sitting in their balance sheet. Plenty of cash to pay the dividends too.
LGEN has the misfortune to operate in an unloved sector in an unloved market but is a financially sound company with a resilient dividend.
We won’t know what the new CEO’s strategy will be re the dividend until June 12th and I think there is a serious chance that future dividend growth may be curtailed as a deliberate part of his plan. But there is no doubting the ability of the company to pay it should they decide to do so.
Likewise, happy to hold and add should it drop to 220. I'm just about breaking even at this price but the 8.3% yield I will be accruing this year is the main reason I'm invested.
Will hold, as usual, and still doing well with this share. Since the market always knock down the price by the value of the dividend on the Ex-date (14.63p in our case) regardless of whether the share price is 300, 200 or 100p, I feel that when you are starting from already a very low evaluation the upward pressure on the price after the Ex-date will be much greater.