Beaten down dividend paying shares that could be good for the long term

[John Doe]

BP today?

[ziknik]

BP today?

1.9% up today... what are you thinking?

[hotairmail]

Do not buy UU. for the dividend. There is a reason why it is so high.

 

The government have it under regulatory review (Nov completion I think) where it has stated that it wants less to go to shareholders and low prices for customers.

[John Doe]

1.9% up today... what are you thinking?

Thought they were going ex-div?

[ziknik]

Thought they were going ex-div?

 

they did. it was 8.503 pence per share to be paid tommorrow

 

http://www.bp.com/extendedsectiongenericar...ntentId=2017253

http://www.bp.com/extendedgenericarticle.d...ntentId=2004288

[John Doe]

they did. it was 8.503 pence per share to be paid tommorrow

 

http://www.bp.com/extendedsectiongenericar...ntentId=2017253

http://www.bp.com/extendedgenericarticle.d...ntentId=2004288

Yes I know, it's great, got nearly 2%, (8% annualised )

 

I was just thinking it was nice going ex-div and rising the same day. Usually, there is a slight drop.

[ziknik]

Yes I know, it's great, got nearly 2%, (8% annualised )

 

I was just thinking it was nice going ex-div and rising the same day. Usually, there is a slight drop.

I suspect there was some shorting prior to the ex dividend followed by longs anticipating the auto dividend re-investment (guessing)

 

 

[John Doe]

I suspect there was some shorting prior to the ex dividend followed by longs anticipating the auto dividend re-investment (guessing)

Maybe.

 

A few years back I used to buy Lloyds etc a few weeks before ex-div, then sell them the day before. Could usually grab a good few % (sometime more).

The drops the next day were usually more than the div.

 

 

[ziknik]

I'm going to have another look at PAA. GTG also mentioned them earlier in this thread.

 

http://seekingalpha.com/article/168555-15-...icle_sb_popular

 

15 Hot Stocks for Increasing Dividends

 

This week, as the weather turns cold the dividend increases heat up. Below are several companies heating up their yields with increased cash dividends:

 

PPG Industries (PPG)

 

El Paso Pipeline Partners L.P. (EPB)

 

Plains All American Pipeline (PAA)

 

Universal Forest Products (UFPI)

 

Stepan Co. (SCL)

 

Shenandoah Telecom (SHEN)

 

Ecology and Environment (EEI)

 

Hanover Insurance Group (THG)

 

Artesian Resources (ARTNA)

 

Visa (V)

 

Brown & Brown (BRO)

 

Eaton Vance (EV)

 

Peabody Energy (BTU)

 

Holly Energy (HEP)

 

Matthews International (MATW)

[littledavesab]

I think JNJ is pretty safe. I believe they have a stash of $13B of cash. They are using the money for acquisitions - it's unlikely they'll cut their dividend. They've also just won a lawsuit of $1.67B against Abbott

 

Did anyone follow this up? Didnt look like such a bad call

[Vicarious]

So water companies up today on regulatory news,

 

From digital look :- United Utilities will have to cut bills by £9 to £364, which is more generous to the firm than the £17 cut originally proposed. Severn Trent’s bills are to fall by £13 to £292, compared to the £24 cut that was previously proposed.

 

Northumbrian, which Ofwat had envisaged being allowed to lift bills by £3 over the period, will now be allowed to lift them by £17 to £331.

 

[No6]

Three worth watching if you are into dividends and income.

 

Tesco, the world’s third biggest retailer, PZ Cussons, the maker of Imperial Leather soap, and Halma, the developer of safety equipment, are not companies you might normally bunch together.

 

But they have a powerful and enduring bond as far as income investors are concerned. They are the only three British companies to have consecutively raised their dividends in each of the past 25 years.

 

http://business.timesonline.co.uk/tol/busi...icle6943584.ece

[No6]

A retailer paying a cracking dividend?

 

Looks like HMV expect to pick up some of the Borders closure fallout just as they did when Woolworths and Zavvi fell.

 

HMV dividend is around 6% right now.

 

Borders collapse is music to ears of its rival HMV

 

MUSIC and book retailer HMV is expected to cherry-pick a number of stores from the collapsed Borders chain.

 

The demise of Zavvi and Woolworths last year has already delivered a sales boost for HMV.

 

Now it has the chance to pick up more stores from Borders, which went into administration last month.

 

WH Smith surprised the market by walking away from a deal to buy 45 UK Borders stores, leaving the administrators open to other offers.

 

Analysts at UBS believe HMV will pick up new business even if it doesn't buy some of the Borders' stores and that its bookshop chain Waterstone's could generate an additional £25m in sales next year.

 

http://scotlandonsunday.scotsman.com/busin...--is.5887527.jp

[John Doe]

A retailer paying a cracking dividend?

 

Looks like HMV expect to pick up some of the Borders closure fallout just as they did when Woolworths and Zavvi fell.

 

HMV dividend is around 6% right now.

Good find, will look into this further for my long term fund.

[No6]

Good find, will look into this further for my long term fund.

I would just say that you need to be careful as it is a retailer and as such unloved by the market, there is no telling when this may change. The short sellers have had a party over HMV for some time and I believe that it is one of the most short sold companies on the market. The dividend however has been reasonably stable and maintained. I would say that it is more of a recovery stock, but there could still be a rocky road ahead especially if we have a double dip.

[No6]

Another FTSE350 stock that may be worth a look is Telecoms Plus. I read today that its yield is around 7%.

 

This is from a Smaller Companies Growth Fund Newsletter email so cannot post a link.

 

Telecom Plus – At 302p the September 2010 yield is 7.3% rising to 8.3%. For a profitable company with net cash that is just the wrong price. A widows and orphans banker.

 

 

[No6]

Good find, will look into this further for my long term fund.

 

This is also interesting about HMV. The retailing sector has done remarkable all things considered, but HMV is one of the few left behind.

 

Ker-ching!

 

That’s the sound of the retail sector ringing up its best ever returns for shareholders in 2009. Britain’s quoted store operators have collectively risen 77 per cent in value since the start of the year — far better than any previous year on record (see chart), and a comfortable 56 percentage points ahead of the advance of the FTSE 350 index.

 

Accordingly, retailers are well represented in the roster of this year’s best stock market performers. More than eight of their number have doubled or more in value, including blue chips such as Burberry Group, up 159 per cent. A couple — Debenhams, the department store operator, and Dunelm, the homewares retailer — have risen more than threefold since January. Conversely, only two stores have failed to produce positive returns: Game Group and HMV Group, both of which complained this week about the weakness of the computer games market.

 

For the rest, trading has held up remarkably well. The fillip to consumer spending from rock-bottom interest rates, together with tight control of costs, has meant that most retailers have made more profits so far in 2009 than they did in 2008.

 

http://business.timesonline.co.uk/tol/busi...icle6954131.ece

[No6]

Cable and Wireless also has a 6% yield. I've set up a separate thread to follow the UK telecoms sector.

 

http://www.greenenergyinvestors.com/index....mp;#entry147989

[No6]

I know it's a retail stock but HMV's divi yield is now 7.7% after the latest price fall. They seem to have maintained their dividend over the years, so either the market has got this wrong or bad news is in the pipeline somewhere. It will be interesting to see their Christmas sales as the last few years they have set records every year and normally this is when they make money.

[No6]

From the latest Money Morning free email.

 

Here’s a classic case in point – insurers. Here we’ve already tipped RSA (LSE: RSA), (previously known as Royal Sun Alliance), which is one of Britain’s biggest insurance firms with a market worth of £4bn. At 118p, RSA is very cheap for a leading company in its field. It trades on a p/e of 9.3 for this year, which analysts see falling to around 8.5 in 2010. Better yet, the current year yield is 6.8%, which is forecast to rise to 7.3% next year.

 

By the way, the UK’s largest life and general insurer Aviva (LSE: AV/) looks even cheaper. At 375p it’s on a p/e of 6.7 for 2009. The general view among analysts is that this will drop to just 6.3 next year. What’s more, the current yield is 6.1%, with 6.5% on the cards for 2010.

[Vicarious]

Have RSA and Aviva been involved in the same sort of stuff as AIG? those numbers look pretty tempting but so do the UK banks and I still wouldn't touch them at this moment in time, apart from my work share options.

[No6]

Have RSA and Aviva been involved in the same sort of stuff as AIG? those numbers look pretty tempting but so do the UK banks and I still wouldn't touch them at this moment in time, apart from my work share options.

 

That was from the Money Morning daily free email. They seem to fancy a smaller company called Catlin Group. Still best to DYOR, but here is a fuller version.

 

There are some great dividend payers out there

 

As stock markets have surged this year, most share yields have dropped. The yield on the FTSE All-Share index has fallen to a mere 3.25% - and many shares are looking ‘toppy’.

 

But not quite all. If you hunt around, and you can accept the inevitable risk to your capital that you take when buying shares, you can still find some great dividend payers out there.

 

That’s because investors have largely ignored high-yielding ‘defensive’ shares – those that don’t depend on economic growth to make their money. So there are still opportunities to buy.

 

If the market now recognises the value that high yielders are currently offering, you’ll make money as their share prices rise. But there’s another positive. If the overall index drops, high-yielders could well come back into favour.

 

That’s because shares with higher dividend yields tend to perform much better in falling markets, as the higher payout level protects the share price. So if stock markets fall, investors in the riskier stocks that have driven the rally are likely to take fright, and pile into the big dividend payers to protect their portfolios.

 

In Money Morning we’ve regularly highlighted the great value and high yields to be found in several of the larger defensive stocks and sectors. We’ve recommended big-cap utilities, pharma, telecoms and tobacco firms. That advice still holds good.

 

Don't ignore smaller companies

 

But cast the net a little wider across the range of smaller companies, and you’ll find some even cheaper stocks with yet higher yields around. Of course, if you buy shares further down the market cap scale, you could be taking on a bigger risk. But the trade-off is that you can lock into even better value.

 

Here’s a classic case in point – insurers. Here we’ve already tipped RSA (LSE: RSA), (previously known as Royal Sun Alliance), which is one of Britain’s biggest insurance firms with a market worth of £4bn. At 118p, RSA is very cheap for a leading company in its field. It trades on a p/e of 9.3 for this year, which analysts see falling to around 8.5 in 2010. Better yet, the current year yield is 6.8%, which is forecast to rise to 7.3% next year.

 

By the way, the UK’s largest life and general insurer Aviva (LSE: AV/) looks even cheaper. At 375p it’s on a p/e of 6.7 for 2009. The general view among analysts is that this will drop to just 6.3 next year. What’s more, the current yield is 6.1%, with 6.5% on the cards for 2010.

 

But look at something smaller, and you can unearth even better value. Catlin Group (LSE: CGL) is a global specialty insurer and re-insurer. That sounds rather niche. But Catlin is widely diversified in what it covers, so as to spread the firm’s overall risk level.

 

Standard & Poor's has recently taken a swipe at Greece and Spain because of their huge borrowings. But the ratings agency has also just said some very nice things about Catlin. This week it has raised the firm’s financial strength score to A, as “the company’s capital position has improved and will prove resilient to the growth expectations of the group”.

 

Last month’s trading update showed that premium growth is good and that “investment returns were exceptionally strong”, says Freddie Neave of Cazenove. Yet Catlin is trading on a current year p/e of just 4.3. Even if that ratio slips to 5.5 in 2010, in line with analysts’ estimates, the current year yield is a three-times covered 7.7%.

 

What’s more, at 326p, Catlin is trading on a huge one-third discount to its tangible net assets. With a dividend yield of well over double that of the FTSE All-Share, this stock really does look dirt cheap.

 

For further advice on solid, long-term, dividend-paying shares, also have a look at what MoneyWeek contributor Stephen Bland recommends in his Dividend Letter newsletter.

 

http://signup.moneyweek.com/MW/mm.html?new...ecode2=X980K904

[littledavesab]

Have RSA and Aviva been involved in the same sort of stuff as AIG? those numbers look pretty tempting but so do the UK banks and I still wouldn't touch them at this moment in time, apart from my work share options.

 

In a word = NO. Aviva is definately only concentrating on bread and butter type insurance risks - home / motor /shops offices etc. They even ditched their liability account a few years ago - think builders liability etc. They still do some major business insurance however. + Aviva is mainly a life and pensions operation although the general insurance bit is important to them

 

RSA is similar but does more liability than Aviva (leads to bumpier results). no longer does life and pensions business I believe it flogged it off.

 

AIG had a specialist london markets division with (from memory something like 12 people in it) that caused all the damage - everything else was profitable (enough) not to be a problem.

 

The major LLoyds players deal with similar risks to rsa/aviva but also might deal with re-insurance & marine/aviation/space risks and this on occasions can cause big losses - but not on the scale of the AIG! I dont think they do the financial risks side but you would need to check each individually.

 

However if you see the markets dropping considerably - less than say 3500 on the FT100 then this would have an impact on the RSA/Aviva solvency margins.

 

If you are a major deflationist of the robert prechter view you would want to avoid - mind you, you should then be out of the markets completely and into gov bonds and a little gold!

 

Insurers tend to be seen as a geared play on the markets.

 

I work in general insurance broking BTW. In my very humble opinion Aviva is a fair bet but I have not downloaded their accounts for ages.

[No6]

In a word = NO. Aviva is definately only concentrating on bread and butter type insurance risks - home / motor /shops offices etc. They even ditched their liability account a few years ago - think builders liability etc. They still do some major business insurance however. + Aviva is mainly a life and pensions operation although the general insurance bit is important to them

 

RSA is similar but does more liability than Aviva (leads to bumpier results). no longer does life and pensions business I believe it flogged it off.

 

AIG had a specialist london markets division with (from memory something like 12 people in it) that caused all the damage - everything else was profitable (enough) not to be a problem.

 

The major LLoyds players deal with similar risks to rsa/aviva but also might deal with re-insurance & marine/aviation/space risks and this on occasions can cause big losses - but not on the scale of the AIG! I dont think they do the financial risks side but you would need to check each individually.

 

However if you see the markets dropping considerably - less than say 3500 on the FT100 then this would have an impact on the RSA/Aviva solvency margins.

 

If you are a major deflationist of the robert prechter view you would want to avoid - mind you, you should then be out of the markets completely and into gov bonds and a little gold!

 

Insurers tend to be seen as a geared play on the markets.

 

I work in general insurance broking BTW. In my very humble opinion Aviva is a fair bet but I have not downloaded their accounts for ages.

 

It would be interesting to get your view on them if you ever do get the time to look at their accounts.

 

I did learn the hard way not to short insurance related companies when the market is going up, because they tend to mirror the move. Probably not all of them, but the one I shorted, Old Mutual, did. Fortunately I got out quick.

 

[Catflap]

Anyone buying PV Crystalox Solar? - I think I read it was coming out of the FTSE250. Currently has a yield of 10% with good dividend cover.

 

http://www.iii.co.uk/investment/detail?cod...ntals&it=le