Member Info for Stockpig

"The final countdown is almost done.It's been over a year and the board hidden in secrecy, all the time off setting expectations.I shall be burning my stake if they prescribe to another attempt to freeload more time while i assume the risk and value loss of return.I won't speculate on the size of dividend but money better be forthcoming"

I thought the FCA pushed back the date of their decision until next May? In which case I don't see CBG bringing back the dividend before then.

"Sorry… he looked at Diageo as an example in January 2023, look where that went.

He is not the person doing the buying..there are lots of others, like he bought pharma’s in 2020-2021 then sold in 2022 before there meteoric rise

BUFFETT also has now got over $304bn in Cash reserves since selling stocks, latest one is BOFA which even the CEO hasn’t got a clue what he’s playing at…"

Buffett didn't look at Diagio in 2023, although it was widely reported as a new purchase, it was actually an existing holding in one of the insurance companies.

I would also venture that Buffett knows exactly what he is doing in selling down some of his stocks. For example, I've seen mention elsewhere of BAC sitting on $100bn+ of unrealised bond losses which probably affects its regulatory capital requirements or be likely to lead to lower returns in some way for a while.

Sorry 1m sales, not £1m in sales.

"Space Marine 2 seems like a huge hit."

Steam has a peak figure for the game of 225k concurrent players. One streamer I follow suggested that it probably means it has hit £1m in sales already.

"Will this rocket on 4th September after adm results ?"

Hard to say. on one hand the previous mismanagement has left DLG in poor shape that positive news is likely to give it a boost but on the other, I'm not sure its news will be anywhere near as positive as Admiral's, so will the SP boost be as prominent?

Just some random thoughts from me but ADM has the better balance sheet and can return more cash to shareholders. Someone on this forum pointed out earlier this year DLG's CEO did not make any mention of claim releases when talking about the future roadmap. ADM was ahead of DLG in raising prices, so can now lower prices quicker too. I think the last update by DLG suggested they are still having to raise prices, but this may have changed now.

"So it may rise into the divi but my concern is the xd here has been a horror show? The falling divi cover may be related"

Isn't dividend cover at 1.9 earnings? I can't imagine that is an issue here given solvency cover is around 220% and dividend from next year is forecast to grow at a slower rate while earnings are expected to grow 5-7%+.

"Are we gonna get a dividend?"

Most likely. Probably lower than last year though.

"I am not sure UKW has any money left after the buybacks to actually invest in windfarms. So the buyback policy seems quite counterproductive. I e. This co is going nowhere fast!!! Such a shame because the potential is wasted on buybacks and Divi. How about stop both and invest instead. Then pay 10x Divi after years of real growth. I know I'm talking to a wall. Never mind"

They do invest. The buybacks are carried out with surplus cash if they fail to identify acquisitions that offer better value.

"Howden have set their sights on 1000 UK branches and continue to open sites in Ireland and France so there's plenty of scope for growth."

Agreed. They also announced a move towards selling more than just kitchens

"With any investment, you need to look at the total return."

Yes, but over what time frame and what has happened to the underlying fundamentals of the company in that time? Income investors are usually thinking about their returns happening over a longer period and on the performance of the business. And, gyrations in stock prices can occur for a range of reasons and do not necessarily reflect the performance of the business during that period.

It's funny what difference a few months can make. I've held shares in Britvic for 3 or 4 years. Like the business, like the management team's running of the business. The only concern I had was around its future growth prospects, so it was always one of the companies nearer the top of my review pile for selling if a must have opportunity elsewhere emerged.

However, the last set of results knocked that out the window and I was really excited to hold on to this share now that its business is either returning to its pre-covid trajectory or in the case of the newer investments in potential growth markets getting into their stride....

...then someone comes along to try and buy it lol...

"Why do PIs focus obsessively on the super high dividend yield of these UK insurers - Phnx and Lgen in particular - when a cursory glance shows that Total Returns have been negative over a multi year period, during which time even an indexed fund would have been a better choice?"

By and large, I don't think they do. Although as primarily income investors they are naturally going to be focused on the income the shares provide. However, the impact over the short term is likely being discounted because they are planning to hold for a very long-term during which they believe the fluctuation in share prices will either have little impact, balance out or improve in favour of the investor (after all past performance is not a guarantee as to how investments will perform in the future). With a solid, growing company, throwing off lots of cash to shareholders the big risk for an investor from the falling share price is probably the risk of a forced sale capitalising those paper losses. On the other hand Falling share prices may provide an opportunity to buy more shares at a level you believe offers value.

In short, I think it is fair to say that there are a variety of reasons why insurance company share prices have been hit over the last 4-5 years and visible drivers that may (or may not!) lead to some rise in prices going forwards. Discussions around Total Return should take those both into account.

"offer...or the deal could fall through and price drop...."

I suspect if the board announce they recommend the offer, it's only because the big shareholders have already told them that they want it.

I agree with Badgernator. Each company has a finite capacity to grow each year - It's unlikely HB can expand into new markets while also expanding/ refreshing sites in UK/ Canada. Not because of a lack of cash but just managerial focus required to deliver that. Even with the current dividends it has plenty of cash to invest if it wants to. I think the company likes to play down expectations around expansion anyway to leave itself some space to surprise on the upside.

I don't see PE bought companies being a big threat either. They are also fairly good cash generators but that probably goes as much towards PE profits as it does expansion (if the latter at all).

"An interesting statement on page 36 of https://group.legalandgeneral.com/media/czoc4jha/2024-capital-markets-event-presentation-slides.pdf

“The Board intends to return more to shareholders over 2024-2027 than the equivalent of maintaining 5% per annum growth in dividends per share (DPS).”"

Thanks for the link. I haven't read that yet but will do so shortly. I noticed some articles mentioned the above but it wasn't entirely clear from them as to how this would happen - hopefully the slides provide some more information on this?

"The market certainly disapproves of something. Probably the fact that annual dividend growth will now be below the rate of inflation. "

That was my first concern. Very surprised we didn't see a 3% floor for Dividend growth rather than 2% for that reason. Or any reference to possibility of Special Dividends if a bumper year. Is a 1+% buyback enough to move the needle? Given the number of investors calling for one, it is odd to see the drop as soon as one is finally announced.

Has anyone done the sums re: maintaining 3-5% growth of dividend? Feels odd to be getting 3% less dividend growth when earnings growth is targeted for roughly what has been delivered previously - can only think CEO is saving something up his sleeve for later.

No mention that I could see as to how cash from sale of the housebuilding unit would be handled either, but I may have missed it as speed reading.

"The decline in DPS growth from 5%pa to 2%pa is merely a reflection of additional resources being channeled into share buy backs instead.'

Does the 2% growth apply to the entire cash sum put aside for dividends or at the per share level? If the former, will that mean the actual dividend growth we see is higher to account for fall8ng share count or could that already be counted within that 2% figure?

"Do I see Legal & General opting for growth & changing corporate strategy? personally i dont see it as they're well known as a value share paying a healthy dividend & offering insurance & pension products."

There was an article in the Sunday Times this week saying that L&G would be announcing a share buyback this week at it's capital markets day (or that they expect L&G to be announcing it, I can't remember which).

Checked for mine at 2pm and it was there.

"" . . . there is a talk of a very large share buyback being announced . . . "

Really? And where exactly has that information come from?

I was under the impression that they had missed operating profit expectations for 2023!!"

Analysts are always saying LGEN are considering whether to buy back stock so thats no surprise, that has usually been pushed back by the company who have believed they can earn better returns on that cash. However, the new CEO comes from a background where buy backs are a big part of shareholder returns. Furthermore, if he is looking at divesting some parts of the business, then it wouldn't be a surprise to see one initiated because of that. As for affordability, earnings have in recent years been growing faster than the increase in dividends. The most recent figures have been affected because of accounting the need to revalue assets - the underlying business is still very profitable. The company also has a very healthy capital cushion with which it can dip into quite easily to fund a significant buyback without putting the company under any financial risk.