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 High Dividend Counters, Better than putting in FD

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gc68
post Jun 8 2012, 10:59 AM

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I always refer to the dividend yield of the share and compare that with FD rates.

No point referring to dividend paid becuase how much returns you get is always relative to what you put in.

With the exception of REITS, stocks like Digi, Carlsberg give very good and CONSISTENT returns.

The emphasis here is CONSISTENCY i.e. they allocate significant amount of profits for dividend payments and have been doing it for at least 5 to 10 years. If the stocks meet these criteria then only I buy.

By the way, I did not buy AsiAsia for the dividends, it is an interesting and promising business, but no strong div track record.

Personally I don't really like REITs quite difficult to sell, trade volumes are very low.

... my 2 cents ....

gc68
post Jun 12 2012, 12:11 PM

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QUOTE(Kamen Rider @ Jun 8 2012, 08:43 PM)
Some reading on dividend stuff:
a) If a company is not paying a dividend, with Efficient Market Theory, the company is going to pay a dividend eventually, so the price of its share reflects these future terms

b) If a company never going to pay dividend, why would people want to invest into it?

c) It is common for a young company not to pay dividends.

d) The value of company is associated with its activities, and if the company never pay a dividend, why would you care about what they are doing.

e) You care about company activities, as some how, the company going to pay you dividend.
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Whether is there going to be dividend depends on the industry and the stage of the company.

Companies that give high dividends are usually the matured industries and have been around for many many years.

The growth rates of these "old industries" are low but very stable. As such, good dividend policies is used to attract investors.

The important thing is consitency in earnings growth (may not be big growth but consistent in the past 10 years minimum) and good PE ratio i.e. less than 15.

Better still if the NTA is higher than stock price (but rarely happens tho).

 

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