RDSB is one of my largest holdings. I've traded it on and off over the years but eventually ended up with a sizeable holding at an average price I could live with. BP - I just bought two tranches as a long term buy and hold. Both companies will eventually transition to green(er) energy but I don't think the path is as clear as some make out. Will it be 100% electric (I doubt it) or will hydrogen play a part as it already does in Japan. Could be a bit like Betamax vs VHS! Either way, oil isn't going away any time soon. Both companies are here to stay - notwithstanding any disasters...
I also hold LLOY (+HSBA), PFG (Provident) and AV (+ LGEN, DLG, HSTG and LRE to name a few others). I also invest for income and although quarterly dividends are good, in practice with a reasonable number of holdings it doesn't really matter but you'd have to assess your own portfolio to look at the overall dividend schedule throughout the year.
Your Provident holding illustrates the point of not putting too much into any single company. No matter how good you are at stock picking, there will always be the odd munter. I don't worry as long as the portfolio as a whole is doing well (which fortunately it is). FWIW I think PFG's troubles are behind them (famous last words, I know...) and the SP seems to be gradually recovering, as will the dividend I think in due course.
Have you also considered the renewable sector? I have holdings in BSIF, TRIG, JLEN (all bought a long time ago) and GRID (bought recently). All offer good yields and several have an element of index-linking of the income = YOY increasing dividends. Most are trading at a premium though (they're investment trusts). I also have my eye on FSFL and NESF...
I would echo the sentiment in the previous replies regarding splitting the 100K 50/50 between BP and RDSB (assuming you're in the UK where RDSB makes more sense than RDSA). Disclosure - I hold BP and RDSB, amongst others.
However, is this 100K the sum total of your investment portfolio or new money being added to an existing portfolio? I ask as I would be reluctant to put more than say 6% into any single investment (maybe a tad more for the ultra-large caps, but not much more).
My portfolio is well into six figures and I currently have 56 different holdings (down from 70+ a year or so ago). Diversification is key to protect your wealth - glad I didn't have 50% of my portfolio invested in BP when Macondo blew in 2010 and the share price halved, or 50% in Enron... I did have a holding in Carillion when they went bust. I frowned, gritted my teeth and cursed, but I didn't lose any sleep. We live in an uncertain world - anything can (and often does) happen - so rule number one - Don't Lose Money (or at least try not to).
Both BP and RDSB look good value to me at present prices, but that's not to say they won't be much cheaper next week or for that matter much more expensive. With 100K burning a hole in my pocket I'd resist the temptation to blow it all in one go. Instead I'd be buying in tranches to try to average out the inevitable ups and downs.
Bear in mind anything you read on any discussion forum cannot be taken as financial advice - you must either make your own decisions (and accept responsibility for them) or seek professional advice.
Good luck, and please let us know how you proceed.
"5% off seems a bit of an over reaction....buy the dip"
Dip? What dip? Blink and you'll miss it. Call me cynical but I think AZN is only going one way (up!) and this morning's OTT reaction to the results is pure market manipulation to enable buying at lower levels. I'm in (have been since the very low 30's) and have no intention of selling unless something really bad happens - and this morning's results definitely don't fall into that category.
Good luck to all.
Illiquid assets in open-ended funds aren't a good match, as recent events with Woodford's funds and now property funds have made clear. The FCA are said to be looking into this issue. I can foresee restrictions on fund managers' ability to invest in illiquid assets of all kinds including property. Logic suggests this will drive cash out of property funds and into REITs as many investors will still want exposure to property.
So it's easy to build a case for long-term increased demand for REITs purely due to this effect alone. But clearly the health of the wider property market will be the bigger factor. For new REIT investors coming from property funds it could be argued that it would be wise to avoid retail property, but the contrarian in me sees the current low values attached to retail property as a possible buying opportunity - assuming loan to values aren't a pressing issue. As always diversification is good - NRR, BLND, RGL, AEWU, RDI and WHR all offer good yields and diversification - holding a mix of retail, office, hotels, pubs and warehouses. It's hard to imagine that this lot will go out of fashion in the long term (yes even retail, IMHO). But as always DYOR.
A late reply but better late than never... SMIF send out these offers to buy back shares at a discount quite regularly. Just ignore if you don't want to sell... no action required. If you do want to sell it would be worthwhile getting a market price first before accepting SMIF's offer. In the meantime just sit back and enjoy the dividends.
I surprised there is not more discussion of SDRC. It has served me well over the years. Having said that there is not much discussion on the SDR board either! https://www.lse.co.uk/ShareChat.asp?ShareTicker=SDR&share=Schroders
1) Debt - lots of.
3) If not Corbyn then Boris and the pattern of the Conservatives to copy (at least in part) Labour policies to try to thwart Labour.
4) If not Corbyn or Boris then the regulator who can limit profitability and therefore dividends
Don't get me wrong, I have been a long term holder of NG in the past. But it seems like too much of a political football at the moment. That's why I no longer hold NG. At the right price I will take a chance but not at the current sp - the R/R doesn't look favourable IMHO.
Good luck to all holders.
Seems like another very good update -
Loan to Value ratio down
Cost of debt down
Oversubscribed equity raise in July
Continuing to buy property
Very diversified across sectors and tenants with little exposure to retail
156 properties valued at £750million, 1,224 units and 864 tenants
Quarterly dividend up 3% on same quarter last year to 1.90 pence payable on 19th December 2019. Ex-div 21st November.
Rolling 12 month dividend yield is 7.5% based on current sp of just over 108.
Happy long term holder.
The way I look at it:
Free cash flow has to be there to pay dividends year-to-year otherwise where are the cash payments for the dividends coming from -
- Debt (more of - and we all know where that ultimately leads...) or
- Sale(s) of assets (effectively liquidating part of the company to give you your own money back)
FCF is real - not an accounting number. But capital expenditure can take FCF negative. Is that bad? It depends. If the capex is relatively one-off and is going to fund tangible growth then why wouldn't that be a good thing. But if FCF is consistently negative then clearly that doesn't bode well.
However, it's all well and good having FCF to pay dividends but in the long term the company still has to be able to pay dividends from profit (earnings). We all know (or should know by now) that earnings can be manipulated without any material change within the business. Conveniently writing off intangibles and goodwill when it suits (political reasons or new CEO?) is a classic example. Does that make the business more or less viable? It depends. If the write offs are due to massively overpaying to take over another company (lack of due diligence?) it suggests management incompetence. But what if the write offs are due to legacy issues that are now firmly in the past?
IMHO nothing is ever clear-cut. FCF can keep dividends rolling in in the short term but longer term you cannot ignore earnings cover for dividends. If either FCF or earnings go negative then you have to look deeper to try to understand the reason(s) and ask if it's likely to be a one-off or is there a pattern developing. In the case of VOD's earnings cover for the dividend there was clearly a pattern and there was intermittent but growing talk of a dividend cut. Perhaps is was confirmation bias from a few that keep telling people to just look at the FCF cover... In the short term they may have been right, but as earnings kept falling short so did the share price.
You only had to look at a VOD chart to see what was happening. But it's the hardest thing to sit on your hands - waiting for the right time to buy. I've got it spectacularly wrong on occasions and missed out altogether. In VOD's case though I bought my first tranche at 143 and bought again at 130. Happy to hold long term. Now let me tell you about my Carillion loss as a result of believing audited accounts and statements from directors... Never easy is it?
Thanks for the link. GRID has been on my watchlist for a while but after watching the video and reading the RNS update on the 7th November I decided to push the button so bought in today at 104.
GRID has a very interesting business model. It seems like a win-win as it is based on smoothing the supply of electricity to the national grid rather than the price of electricity itself, and there are multiple sources of income. Very clever indeed. The video is well worth watching.
Targeted dividend for 2020 is 7p. Based on today's price of 104p that a forward dividend yield of 6.7% and if there's a stock market downturn or economic downturn the dividend should not be affected (famous last words). Happy to have bought in as a long term source of income.
I've traded RDSB 100% successfully (there's a first!) so many times I've lost count. Now I'm just a long term holder with an average holding price in the low 1900's built up over several tranches. RDSB is my largest holding. I don't plan to add any more but having said that if the price dropped more than say 10% below my average I'd buy another tranche with a view to selling in due course above present levels. The dividends in the meantime would be about as rock solid as they get.
Having said that, I also see oil & gas prices being volatile for a few years for a number of reasons...
The climate is changing - it always has. And I find it difficult to imagine that human activity is not playing some part in that. But the question for me is how much of a part? I suspect not very much in the grand scheme of things but who knows - even the 'experts' disagree. The consensus suggests more extremes in weather in the decades ahead - so very warm periods and very cold periods. People will still turn their heating on if it's cold and I can't ever see that changing.
The Saudi Aramco IPO will be interesting, not least because questions have been raised about the accuracy of their oil reserve numbers. I have a feeling there are some spanners to be thrown out of the works there. I'm staying well away!
Fracking is to say the least, controversial and shale gets bad press. We're supposed to be moving away from fossil fuels but there are negatives with all the alternatives, not least of which is the finite supply of lithium, cobalt, etc, for batteries and the cost of extraction, processing and environmental issues regarding large scale mining. Even then, batteries only store energy. It still has to be produced from somewhere to get that energy into the batteries. Solar is good when the sun shines (don't need full sun either) and wind is good too when it's windy! But here's a number for you - I was in Ramsgate Marina a few weeks ago, putting some dinosaur juice in the tank, and was discussing the number of windfarm cats operating from the harbour. The guy on the pump said one of the things that no one mentions is the fuel required for the construction and maintenance boats. He said he'd sold 240,000 litres of diesel to those boats in the past week and that was fairly typical, apparently. Never sell Shell !
I'm still in profit having bought much lower several years ago, but I was very tempted to buy another tranche earlier. The price has recovered slightly but if it drops to the 360's again (support currently @ ~364) the temptation might be too much. FWIW the trading update seems like a typical kitchen sink job by the new CEO. So predictable you can almost set your watch by it.
I used to hold BDEV (used to work for them at one point) and PSN for a time. When I bought into CRST I evaluated all the major housebuilders - running the numbers through my spreadsheet. CRST was by far the better choice fundamentally and was and I believe still is at the better quality end of the scale when it comes to mass housebuilding. I haven't checked the numbers from the others recently - but I'm a happy long term holder of CRST (now the only housebuilder in my portfolio) and plan to continue to be.
My partner is a highly educated professional and earns a salary significantly above average. She's no scrounger. She also holds LLOY shares, as do I - both purchased at 49/50p. Many years ago she had 'loan insurance' on a car loan with Lloyds and PPI on a credit card. Fast forward to the PPI scandal and she didn't do anything about it until the ad campaigns alerting people to the deadline to make a claim. This prompted her to write a few letters only a few weeks ago. Does she need the money? No. But she can remember the PPI payments being charged automatically and didn't feel she had any choice in the matter. She's now older and wiser and knows better. She did consider whether she should make a claim with Lloyds as she's a shareholder but in the end decided she would. Clearly a lot of people were prompted to finally do something by the ad campaign. Some may be fraudulent - I wouldn't really know - but my guess is most are genuine. However I don't think it's appropriate for bitter(?) shareholders to tar all with the same brush because the share price has fallen!