RE: Sunday Telegraph 13th February 202216 Feb '22
Quest, it has, but that is slightly misleading.
VSL floated a few years back at 100p with a stated intention to may out circa 8%/ 8ppa. However, in those early days it had money on "marketplace loans" (i.e. almost direct lending to the sub-prime sector) as well as "balance sheet loans" (i.e. lending to lenders to the sub-prime sector). The former performed badly and the latter performed well. VSL exited the former but at some cost. The share price sank to follow the marketplace loans - I first invested around 90p and bought all the way down. The dividend of 2p per quarter became uncovered and was cut. I think it went down to 1.5p per quarter but that's from memory. Then it built from there to be back to 2p per quarter.
My only point is that if the ranking you refer to is because it has increased its dividend, that is only achieved because it cut it!
Anyway, I've been a fan of VSL and have long forgiven them for the marketplace loans error. I never lose sight of what they are funding (high coupon sub-prime lending) but admire their diligence for protecting the financing and the continued high dividend.
That said, I don't think they will increase the dividend anytime soon. I had hoped the extremely successful share buyback programme would encourage that, but it seems not. Still, I am happy enough with 8ppa and would buy more shares if I wanted more income (although it is already my highest dividend payer).
Still, nice to hear VSL being positively plugged!
Guitarsolo