RE: High divi yield.16 Feb 2019 18:43
If the amount of shares in circulation stays the same, it should not matter what the yield is. The company is paying out the same amount per share. So if the Divi costs ex amount of money, say for simplicity 1million shares in circulation and a £1 per share Divi. The Divi costs £1m per year whether the SP is 1.40 or 2.60. in theory, I think the problem comes with the script divis . The lower the sp the more shares they have to give out. Which will eventually cost more I would imagine. I could be totally wrong of course.
lots of "experts" seem to think the higher the yield the more likely a cut, but maybe that's because they see profits falling.
Another point about profits and perception, I think the market is not taking into account the massive potential from emerging markets. In some of the poorest countries in the world people walk around with better phones than I do, it's the easiest way to show status and there are millions connecting up every year.