RE: Half Year Results10 Jan 2017 09:17
:) You work on the same calculations as me Quoth (which is either good or terrible news for us both).
Personally I think that GAW should deliver above a 5% yield which would bring down the target share price of 900p. I can get close to a 5% yield from things like REITS (watching BBOX at the moment) and some large FTSE100 companies (LGEN is paying about 6%).
With GAW having positioned itself as a generous dividend payer and being a smaller, niche outfit, I'd be expecting something more like a 7% yield. On 45p divi's, that's just shy of 650p SP - 6% yield would be 750p SP, which either means that we are well over-valued (if you accept my yield rationale), OR (and this is why I'm holding and not selling) that divi's will rise - at 7% yield on a 750p SP, that would be about a 52.5p divi. If divi's rose higher and we got a sustained 60p divi, then at 7% yield, it would indicate a SP of 8.60 ish - close to enough your 900p. There's quite a few if's in there, but that's what makes this fun, no?
Just a note - I'd be really welcoming of challenges to this logic - I'm less than a year into direct investing and it's good to have my assumptions challenged and to learn.