The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
People just cashing in on the huge rise over the last few weeks, I'm guessing many traders just cash in before ex-dividend while others will ride the dividend and the following share price fall hoping for a quick recovery as we head to the next dividend.
I think cash in the bank is always good but then you have to ask your self what is going to be my next investment, many stocks have gone up a lot we might even see some type of plateau in the months to come, my hope is the higher paying dividends stock will do better in this situation. fingers crossed that M&G has an amazing year.
From my understanding, the size of an investment company matters a lot in the investment game on cost.
I had to look them up without going into deep.
ASHM p/e 15.3 cap 3 billion pre-tax profits h1 150m million.
QLT p/e 18.5 cap 2.8 billion, profits 88 million.
Combined would be cap near 6 billion profits of around 388m before tax, it would have to be an amazing fit for M&g to sacrifice the profit percentage position OF M&G to merge with either of these.
Also, we are either really cheap or they are really expensive or just have amazing reputations for p/e 15/ to 18.
In the short, to medium term, I think these would be my choices. though the way the markets move nowadays what could be a good idea today could turn into a nightmare tomorrow.
1) I think my choice would be either an amazing takeover offer
2) stay as we are.
3) takeover someone else.
4) merger
LGEN p/e 12.97 dividends 6.07%
AV p/e 7.24 dividend 5.4% has been cut by 1/3 with possible buybacks or specials and debt reduction in time.
M&G p/e 4.94 dividends 8.1%
ALL 3 have said they aim for small increases in their standard dividend rates per year. all 3 have their advantages in 1 way or another. for me my pick is currently is M&G due to the high standard dividend rate.
On a pure fantasy topic would Schroders be the type of company and size that would try to takeover M&G.
Combined their assets would be around 900 billion, Schroders has 3.5 billion in cash and 2.5 billion in financial assets, they could easily do a part cash part share takeover or even borrow to do a pure cash takeover.
Maybe M&G will become more aggressive in the takeover markets in the future if things go well and try for someone like Man group or a more middle-ranked played to add around 100+ billion to the FUM.
It has been a good run I am up around 20%, thoughts of selling have resurfaced but then you have to ask yourself what are you going to do with it next. The options out there that beat MNG are extremely slim pickings the tobacco company with a lot of debt is about it, and I do not fancy them, so the end result IS leaving it in MNG. Take the dividend and be happy to ride the dividend cycle 8%+ is still fairly amazing.
There is always a chance for someone to take over M&G which could raise the sp by 30%+. even if you say the odd was like 1% that still a possibility to keep in the back of your mind.
I would be happy with an ever-growing dividend year after year.
It would be great if it happens but the market reaction of just over 3% rise does not indicate this, I have not looked at other dividends rates lately but we must still be in the top few paying dividends even at 8.4%, at 30p we would be something like 14% return, the top paying is IMB at 9.99% we would be 40% high than the leading dividends returns in the whole FTSE you would expect a 15%+ share rise as a minimum if this was the case. We can dream tho
Looks like I have found a long-term home for me at my buy-in price the returns are about 9.6% no complaints from me.
I did think about selling early but decided to go from trading to staying for tax reasons and long-term for the dividends.
me, it has been a win-win.
12.23p then if it goes well maybe a 6.0p later in the year.
a 12p and 12p and the 6p would be too much to pay out from stand-alone profits.
With my limited knowlelge of MNG learning by the day, I am fairly confident from what I have seen from other companies reporting that the FUM will go up due to the market movements.
Inflows and outflows will be unknown factors.
The dividend I think will be safe I am more confident of this than I was with AV, HSBC, and others.
Some possible RISK v REWARD
REWARD A three-year target of £2.2 billion capital generation is doing well, FUM grows, inflows grow, If the dividend is maintained or grows it will be in the top section of FTSE stocks for paying dividends in 2021, with a 9%+ dividend causing a 5% rise and as markets get used to this fact The confidence will grow to cause a 10% to 20% rise in the share price.
RISK Everything goes horribly wrong with FUM, OUTFLOWS, DIVIDEND and the stock goes down.
I was lucky with my timing on market movements with my investment in MNG on Feb 26th currently running at over 7% up which gives me a kind of safety net, I do wonder if my rose-tinted glasses are working overtime sometimes, why are others are not seeing what I/we see. What risk do others see that we do not? FORTUNE FAVOURS THE BOLD
Hi Jatw and others
Your knowledge is in a different league to mine, after reading many pages and understand bits.
You may know this from memory, is the total solvency fund at 137 billion? of the from the total fum of 352b.
Do you think the 2.2 billion is realistic in capital generation by 2023?
Did I read somewhere that the M&G solvency targeted minimum level allowed was 134% is this correct?
Thanks for any info.
AVIVA solvency fund up 8% in 6 months though the Singapore asset sale might have boosted this some, but this should still be a good sign of NMG solvency fund and AUM.
This should give some protection for the dividend to be protected.
let us just hope that inflow beat outflows then it a win-win.
M&G 2019 final Assets under management Man group 2019 final results FUM 117.7 billion,
and administration 2019 £352 billion. 2020 interim FUM down 8% 108billion
M&G 2020 interim 339 billion 3rd quarter FUM 113 billion
M&G 2020 final ??? billion Final 2020 FUM 123 billion
I know that EMG and M&G are not the same but some aspects are which give me hope about the future results.
All so how that the market generally did better at the end of 2020.
Could M&G follow Man group on good news record year for funds under management?
Man group in a record year for funds under management maybe some of this positive movement could have rubbed off on M&G.
Man group 2019 final results FUM 117.7 billion,
2020 interim FUM down 8% 108billion
3rd quarter FUM 113 billion
Final 2020 FUM 123 billion