RE: johnson3628 Nov 2015 15:06
Hi, most concensus of opinion is that they simply have to cut the divi. Had the Brazilian disaster not happened it may have survived at least the same which is their policy, however a 10% yield for a ftse company very very rarely stays. The good news as has been said, a 50% cut (quite drastic for a company whose policy is for progressive increases) will still get you a better than average ftse yield. Also a decision to cut the div will signal confidence in the company, that they are not putting the unsustainable divi at the expense of the finances of the company which in turn may have the effect of increasing the sp. Win win in other words. You maybe sacrifice 5% for a couple of yrs while commodities recover, which they should, and maybe get a 10-20 % rise on the sp and thus your capital in the meantime. Well, I've just convinced myself to buy more Monday, you got to look at it as you don't need the capital for at least five yrs though. Gl.