I raised this issue before, but a lot of people don't understand the stories behind.

Most taught it is 'tax free' as there is no show up in the tax deduction in the dividend voucher.

I got some Shell shares, but it is not a direct O&G counter, it is just a refiner, whereby the rising crude oil can hurt Shell profitability or profit margin if gasoline price does not go up as same degree of crude oil which happening now.

Shell's current magnificent financial result is much due to its stock piles valuation goes up rather than higher profit margin, instead operating profit is so so and slightly decline. As market price of crude oil surge, it will register some profit because of its stock piles of crude oil.

Consistently through operating business dividend is about 50 cents, but recent few years, due to high cash position, it tends to declare some special dividend which make its total dividend around RM1.00 annually. Special dividend is a bonus, can't expect it to be the same over the long term. What matter most is the consistent dividend through operating business.

If you look at its PE (it is about 7x - 8x), it will easily mislead one, due to signficant profit registered because of high crude oil price.

This post has been edited by cherroy: Mar 15 2008, 05:41 PM

I had checked the Uchitec history, seems like its high dividend yield is because of special dividend, quite similar to Shell case.
Its normal dividend is 12 cents (final + interim), 8 cents come from special dividend, so total 20 cents for lastest financial year.
One needs to look more in depth where the special dividend come from and where is the EPS come from.
J
ust like I had mentioned in Shell case. On paper, Shell's profit looks very good, but if one study more in depth, one will find out, things doesn't look at good as on the paper. That's why Shell share price does shoot to sky, even though reporting EPS of RM 1.50-2.00.

I don't know much about Uchitec, can't comment much about it. So better find out more on it, if interested in it.
Look in depth, don't just look on the surface. Always focus on dividend that come from operaing business one which will be consistent over the long term.

Search through its P&L in details as well as cash flow statement to determine where the special dividend money come from to justify.

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Added on March 15, 2008, 5:57 pmBased on its last year dividend of 27 cents, at 1.80, that's correct.
This year, 20 cents.

This post has been edited by cherroy: Mar 15 2008, 06:05 PM

Look at its financial report, (CD or the 'book' send to you one) but not the summarised one which is on mostly online trading portal.
I believe KLSE site should have it. Will check it later. If it is really good, I also interested in it.

This post has been edited by cherroy: Mar 15 2008, 06:17 PM

It is impossible to have a stock with 21% of dividend without anyone notice it. Market is quite efficient one, everyone is monitoring each time, it won't be only you knew it while others (professional traders or long term investors) don't know.

Even if it does, people already chase the stock which lead to higher price eventually lower down the dividend yield around 7-10%.

The special dividend of Hapseng won't be repeatable and is one-off. So don't take the special dividend into consideration for future dividend estimation.

Interim is meant they give out the dividend in the middle of their financial year calendar. Final mean the dividend is the last given out for the financial year calendar.

Gross mean haven't deducted the tax yet. If it is 27 cents gross (with 28% corporate tax, this year 26%) then your paid cheque is 27 x 0.72 = 19.44 cents. But you can claim back the extra income tax paid according to the tax bracket you are in.

Just remind, beginning of 2008 financial year calendar, company has to give out dividend based on single tier system already aka in net amount. No more gross or net like previously.

There is no restriction on how many times company can give out dividend. Some do quarterly, some semi-annual, some one shot final in lump sum. The ability of company to give dividend is based on profitability and cashflow situation of the company. You need to scrutinise where the dividend come from before judging the company. Company only can give consistently dividend throughout years after years through profit generated and cashflow generated from the operation.

Company cannot pay tax-exempted dividend for the dividend that derive from operating business profit.

One must find out why company can give tax-exempted dividend in the first place. Like Maybulk, they make lot of profit from disposable of their old vessel. As capital gain is tax exempted, the profit generated from the capital gain which will be given as dividend can be tax exempted.

Also, if company got plenty of tax credit, then company can use the tax credit to offset when giving out dividend time.
But after 2012, all unused tax credit will be forfeited, so everything will follow single tier tax system.

I am not profession in tax stuff, so please bare with me and correct me if my above statement is not accurate or wrong. Thanks
Just my shallow knowledge and as far as I knew.

This post has been edited by cherroy: Apr 29 2008, 04:32 PM

I think they use their tax credit as well.

Yes, after use up tax credit then no more tax exempted dividend.

After single tier system being implemented starting this year, gov will earn more.

As said, my answer is not definite. Just a simple illustration.

Cheers


This post has been edited by cherroy: Apr 29 2008, 05:27 PM

Yes.
But the capital repayment part is still under proposal, not yet finalise.

But the problem is after disposed the core business, it has no core business which violate the KLSE listing rules, that's why it is under GN3 and potentially being delisted. That's the risk.

You get back 98 cents with Rm1.00 pruchased, just like putting your RM1.00 then take back Rm0.98. 2 cents paid for a company that has no core business, whether a blank company or not, need to find out before can comment.

Option B won't work, as you only make the remiser rich only through the commission charged.

I do think JTinter is a bit toppish at the moment after recent run of the announcement of special dividend. Having said that its high dividend policy will sustain the stock around 4 in the near term as FD rate won't go higher than 3.7% at least for this 1-2 years time. Normally, this kind of stock won't go up nor go down much one.

Dividend stock is highly depends on economy situation (more precise is individual company business) and interest rate environment.

Apollo is also a dividend stock but its low liquidity make it harder to judge or determine.
Often no trade at all for the whole day.

Just my personal opinion.

Again and again (as so many posts regarding the dividend from your posts on asking to speculate buy/sell after or before ex-dividend).

There is no way to gain from the point of before or after ex-dividend for short term trade, so better spend the time thinking of other things else.
Before or after ex difference can be negligible most of the times.

Dividend play is meant for long term holding one.

Cheers.

The main disadvatange of low liquidity is when you have many in it then it is hard to dispose the shares without depress the share price.

Buyers will queue far away as they knew you are keen to dispose. In those low liquidity stock, only a few interested players are around.
So a few up to hundreds lots no problem for retailers but more than around 500 hundred or thousand lots onwards one, then one will fund difficulty to dispose.

Look at its trend of its sales, then you will know how popularity of the Apollo confectionery. I don't know also, interest to find out also.

Can't say which one is more risky in your choice given. They are differ in their risk in nature. Can't compare apple with orange.

Reit - basically you are owning the property while getting the rental

Dividend stock - Invest in company that give consistent dividend throughout years.

UT - invest in a pool of money that hire fund managers to invest according to the managers wish that according to the trustee objective or fund objective.

Buy prior before the stock give dividend won't bring you much gain/profit because share price generally creep out before it is giving out dividend, while share price being deducted for its dividend given after its ex.

This post has been edited by cherroy: May 23 2008, 02:40 PM

The problem now is that it is widely known those construction company might facing margin squeezed until to single digit profit margin only which mean high dividend is not sustainable in the future. As lower EPS will mean lower dividend.

Compared to construction play, I would opt for properties stocks that are trading at signficant discount to its NTA while with good management and still able to generate profit (although profit might be down, but still maintain at ok level only, as it is almost impossible for properties sector to register profit growth as last 2 years)

Anyway, just my opinion.

Over the long term, those are well managed one, surely will come back. Economy is always adjusting itself, too few profit, nobody wants to do so weak competitors being phased out, so when situation improves, then with less competitors, profit margin will go back up.

It is part of economy cycle.
Just it takes time (up to years) to from one to another.

Nothing to worry, dump at 1/9 will also get the dividend. That's for sure as share transaction nowadays is fully CDS. Entitlement date is for those non-CDS share cert to register.

They just choose here and there only, not a comprehensive list.

Besides, some big name, like Guiness, BAT, & reits.

Daiman's dividend also not bad,

15 cents, share price 1.5x. NTA arond Rm4.34. But share price always stuck in the region of 1.4-1.8.

Due to low liquidity issue, fund and instituitional players generally won't touch it even though it is undervalued. But dividend wise is quite steady throughout around 10 cents or 10 cents+.

Its share price match the PER valuation.