High dividend stock pool

đź“Š Investing
1

Hi everyone,
I am new to 212 but not new to investing.
Over the last couple of years I have started to invest in high dividend companies, in some cases successful, some not so.
This has taken a lot of searching, investigating, risk, pain, losses and a weeding out process to get rid of the chaf, and to eventually get some (or at least what I think are) good stocks.
I would like to share the basics of my experience, and the names of the stocks that I like that give a good yield.
In return I would like other investors to share what they have been doing and share their “golden” stocks.

Of course with high yields there is the risk of the trade off

  1. The share price might fall, which may not be bad if the high yield outweighs the fall over time.
  2. The company may not be able to cover the promise of the high yield (too much debt, shrinking revenue etc) and you see it soon drastically reduce as they cut it.
  3. A combination of the two, or even worse the share price not only falls, but the yield is cut to virtually zero and you’re left with a white elephant.

I do my research, I always check out the companies, EPS, Debt, consistant dividends over the years, etc, but it doesn’t always work, for example, I didn’t know interest rates would go up so much, but I bought some Real Estate Investment Trusts, oh dear!
I have kept the stocks, but the dividends have been cut, some by a third, and in one stock, Invesco (IVR) I have lost a third of my equity (for now). I still keep getting a fairly good return from all the REITs combined, about $550 every 3 months, but that should have been $700 at least.
I have had a few more disasters, but enough said.

My journey also gave me some good opportunities.
I have my fav stock, it is a fund, UBS GLOBAL ENHANCED EQ INCOME, the price has stayed around 30-32 UK pennies per share since I’ve had it. I have owned this for a couple of years and the historic price hasn’t been much different for the last 5 years, just a dip because of Covid from a constant 42p per share, it pays 10% p/year and pays monthly. Unfortunately it isn’t available on 212 yet, but I suggested it.
The others I like are:
REACH PLC (RCH) a UK media company 10%.
VANGUARD FUNDS PLC FTSE DEVELOPED EUROPE UCITS ETF (VEUR) a steady rise in price over the last 10 years and 3%.
Some Spanish stocks;
MAPFRE (MAP) an insurance company 11%.
BBVA (BBVA) a bank 6%
PROSEGUR (PSG) a security services company 11%.

So, I hope you can take something from my thoughts, please share your fav stocks.
And remember, if you like what I said, don’t take my word for it, do your own research.

Happy trading and good luck.

2 Likes
2

Vaseline normally helps to avoid chaffing in the first place!

Funds would be awesome on 212, but the cost to enter the market / run I dont think fits with 212’s model so you are unlikely to get such a big change.

3

I don’t have that stock, but it has a good yield, thanks for the suggestion;

4

Wish me luck, and suggest it yourself, you never know. If not we can access it from other places.

5

I think I’ll buy some;

6

Lets get back to basics. I would ignore click bait sources like TMF and SWS. Track record(variance), moat, dividend cover are probably 3 good metrics to use for dividend specific stocks.

I’m a big advocate of investing in your own country, so for me that is the UK. Because of the actions of some in the past 5/10 years, the UK market hasn’t had a lot of investment, but that doesn’t meant there aren’t good companies. LGEN or MNG for example, are companies that manage assets of others amongst a few other things. So the more assets they manage, the higher the revenue. They are UK stocks, but yet they invest globally for their investors and take a fee for doing so.

LGEN has a current yield of 8.9% and a dividend cover that has averaged in the 1.6-2.4 range over the past 5-10 years.

Total return, to me is ideally what you are looking for. The total return on LGEN has been resilient despite the market turmoil in the last 10-20 years.

I’m not saying it will continue to be in the future, DYOR, but it can pay, long term to buy value where others do not see it.

Another source I do like that has accurate data, is Morningstar or the AIC website. Investment Trusts generally carry market sentiment, and they have never been at a higher discount. Take my favourite UKW for example. It has a target 8-10% total return per annum, and pays a 6% yield. The energy markets are high, so its been more profitable, yet its trading at a 14% discount last I checked. Is it a good entry point, or the best way to get exposure to the energy sector, I’m not sure but I do think it might pay to be a contrarian investor right now.

2 Likes
7

Seen this? Interesting take (from a failing manager) on how ISA’s should be forced to invest more in the UK to keep their tax efficiency status.

1 Like
8

They told me they can’t add it. :neutral_face:
In my case never mind, I already have it on another platform, but it would be a nice edition to 212.

9

Thanks for the info. That’s all a big help. Thing with those euro stocks is it seems after all the years of the UK market being the default go to, things are swinging a bit. I have MRC and it’s taken a slapping since Covid and Brexit, yet funds like VEUR seem to be doing quite well off the EU economy. And a nice little dividend and low costs. I know that going with individal companies is riskier than a fund, but I don’t mind spreading out a bit, :iraq: :us: :eu: :canada:

10

I use those too :+1:

11

That was an interesting listen, thanks. But, for the love of God, I hope they don’t make me invest 70% of my Isa in the UK. :laughing:

On a similar note, Jeremy *unt has announced plans this week to direct a bigger chunk of people’s pensions into UK private equity.

With growth hard to come by, I think we may see more of this type of policy.

12

Why not SWS? OK they try to get you to sign up, but at least they just give pure data, and the 5 I get a month are enough for me.

13

I agree, please don’t take away my flexibility. I want to invest in what I think is good. Give me good UK companies and I’ll invest without being forced.

1 Like
14

Going back to your opening post, I think focusing on yield can be unhealthy, particularly for those early in the accumulation phase. Equity income investing has been shown to underperform in the long run but if you’re drawing the dividends, or soon to, then it can make more sense.

I see a lot of people chasing yield at the expense of capital when total return is all that matters. For me, a double-digit yield rings all sorts of alarm bells about risk and volatility. Evraz is a good recent example – a lot of folk bought that based on its yield and now they’re up sh!t street.

However, if I did want to build a high-yield portfolio, I’d turn to trusts which can keep revenue in reserve to pay out in bad times as well as good. CTY and BNKR, for example, have increased their dividends every year for the best part of six decades. Some alternative trusts are worth a look too, eg UKW pays 5-6% which I think’s RPI-linked and it’s on about a 15% discount to NAV.

2 Likes
15

Yeah I saw this. Looks to me like taking unnecessary risk with other people’s money.

16

I’ll reply to each of your thoughts seperately.

I suppose my original post is not aimed at newbies, unless they want it to be. I’ve been investing for a few years, but only in the last 2 or 3 have I concentrated on yields. I’ve found it’s a ball ache, like no one wants to share as if we’re in competiton or something, or they aren’t really sure and give floaty advice, or they make 10 grand a month but want more money to share. I started this to help me, and hopefully help others, by sharing what we/they did that went wrong, and what we/they did that went right, to share real experiences. I’ve found that it’s not the five bad stocks that you buy that matter, it’s the one good one that you find that counts. Forget the others, take the hit, the one that’s good nurture it, let it grow. Even then, you could get kicked in the nuts, but no one ever got rich with a savings account.

Of course individual stocks with high yields carry great risk and ETFs with high yields that have a wide stock base spread the risk. UBS Global Equity Income tracks the MSCI ACWI and covers 48 markets and 3000 companies, pays out a constant 10%, and the price has been steady, with the exception of the usual Covid ping that all stocks have from around March 2020, I call it the Covid signature. I would recommend it, but they dont list it on 212. Of course I’ve made booboos, epecially with individual companies that have high yields. I don’t think what I do would suit most people, but I never commit too much % of my Portfolio to anything too risky.
As buffet said “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” It takes some guts to buy when things are falling, and some discipline to avoid getting caught up in the lift off, some of those falls can sting, and some of those lift offs can burn out like a damp firework. But if you don’t create an income, you can’t reinvest,. Waiting for growth so that you can sell is psycologicaly inhibitive, if it’s going up you don’t want to sell, if it’s going down you’ll lose money if you sell, having an income means you can disconnect from the ups and downs, your income comes in, a price goes down, buy some more (if you’ve done the research and it has potential), or your income comes in, the price goes up, buy something else to diversify, or buy whatever you want. But… always do your research.

I’ll look at CTY and BNKR, I don’t know what they are yet, but Google seems to work quite well. This is why I started the post, thank you very much for participating, and… if you trade on another plarform check out UBS Global:

Open the chart to 5 years, there’s the Covid signature, March 2020, but apart form that there’s nothing that I’ve found so far that has a price stability like that, flat as a pancake.

That’s my recommendation, though nothings guaranteed.

17

image
image1148Ă—1150 72.2 KB

There are a lot better funds out there than that UBS thing, or build your own dividend pie. A lot of bargains to be had right now for a patient investor.

2 Likes
18

I was thinking that. 0.77% is pricey. A passive ETF like VHYL has outperformed it for half the cost. If you’re going to pay active fees, I’d go with something like JGGI which has a better record.

2 Likes
19

Hi Dougal, what is the chart of?