Highlights

THE INVESTMENT APPROACH OF CALVIN TAN

Author: calvintaneng   |   Latest post: Sat, 15 Jan 2022, 1:26 PM

 

DEFENSIVE DIVIDEND PALM OIL SHARES: TAANN & BPLANT NOW GIVING 6.3% TO 9.1%: THPLANT MIGHT RESUME DIVIDEND PAYOUT, Calvin Tan

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Dear Investors

These few days due to Omicron fear many markets have swooned. Now Calvin thinks if there is fear then go For Defensive Dividend Stocks

First read this

 

WHY IS DIVIDEND IMPORTANT? From Dr Neoh Soon Kean's STOCK MARKET INVESTMENT (Reposted by Calvin Tan)

Author:    |    Publish date: 

 

 


 

WHY IS DIVIDEND IMPORTANT?

Dividend is important for many reasons. The most important reason has been explained a chapter earlier on, that is, dividend is the only benefit which a shareholder can obtain from a company under the normal circumstances. Profit, per se, is hardly of any use to him directly and the assets are only of value if the company is liquidated which is unlikely in a great majority of cases. Apart from this reason, dividend is important for the following reasons:

1) Dividend is a sure thing.

All too often, investors and speculators pay too much attention to profit forecast. It is amazing that so many malaysian companies have the courage to make profit forecast for many years into the future. What is even more amazing is that so many of the investors seem to believe these forecasts absolutely. It is difficult to make a profit forecast a year ahead, let alone five years or even ten years. Such profit forecasts can only be regarded as extremely shaky.

Let us take a recent example. During 1981, when the "property injection game" was at its height, many of the companies which were first getting into property development business gave very rosy forecasts of future earnings potential, as a result the price of these shares naturally went up to tremendous heights. Since then, the housing market softened considerably and the office rental market has declined 40-50 per cent. In just three years, the profit picture of just about all land development companies has changed considerably. I wonder how many of those forecasts made in 1981 can still stand up to scrutiny today.

Dividend is real and it is something which the shareholders can put to some use. Most companies keep dividend at a level they can afford to pay out irrespective of whether it is a good or bad year and is hence a great deal more certain than profit forecast.

 

2) Dividend provides a link with reality.

When the market is truly 'hot',  few of us can keep truly rational and we tend to be swept along in the general atmosphere of optimism. But the dividend yield of a share keeps us in close touch with the real world. As in the earlier example of OCBC, anyone who keeps his eye on the dividend yield of that share would have realised that the price level was totally unreal. Most people would agree that at a dividend yield of 0.4 per cent it would be better to sell a share and invest the proceed in houses or leave the money in fixed deposit.

In the established stock markets of the world, the dividend yield (ie dividend per share/price per share) usually has a steady relationship with the fixed deposit and its interest rate. It is normal for dividend yield to fluctuate at around 1/3 to 1/2 of the long-term deposit interest rate. This means that when fixed deposit interest is around 10 per cent per annum, stock should sell at a price to provide a yield of 3 per cent to 5 per cent. Taking a look at the yield provided by local shares during bull markets, the dividend yield is usually so low as to be meaningless. Futhermore, one should not forget that fixed deposit of 15 months or longer and fixed deposits in National Savings Bank are interest free in Malaysia while dividend has a witholding tax of 40 per cent applied at source.

 

3) Dividend provides a 'floor' for shares during bear markets.

Stock markets of the world, especially the Malaysian/Singaporean market is not readily predictable. They can collapse so easily into a 'bear pit' with little warning. If we wished to protect our hard earned capital, we must be defensive in our investment approach. One of the best defense is to buy shares with reasonable dividend yield (i.e. a yield of between 1/2 of deposit interest rate). If we buy a share because it pays a reasonable dividend, our loss is likely to be small even during periods of sharp market decline.

For example, we can buy a share which pays 30 cents dividend at Rm5.00 a share and this gives us a dividend yield of 6 per cent. If the share market goes into a sharp decline, the amount this share can fall to is limited by the fact that it pays a 30 cents dividend. If the price is to fall to as low as Rm3.00, it will be giving a dividend yield of 10 per cent which is about as good as what one can get from fixed deposit but with the additional opportunity to capital gain thrown in.

Most people can see that at that price, the share is probably a good bargain and it is therefore unlikely to fall any lower. It has been my experience that with the exception of mining counters, a dividend yield of 12 per cent seems to be the floor below which most stocks will not drop. In sharp contrast, shares which pay low or no dividend at all do not seem to have any bottom and price decline can hit 90 per cent or more.

 

4) Dividend yield prevents investors from being side-tracked by irrelevant events.

The Malaysian/Singaporean stock market can be characterised by a large number of events which are of little real benefit to the existing shareholders and yet which excite them greatly. I am referring to the large number of bonus announcements, rights issues, property injections, take-overs, and mergers which have made their appearance in recent years. Most of these events are of little, if any, real economic benefit to the existing shareholders of the companies involved.

Despite this, the price of the shares of a company involved in an event of this nature tends to rise sharply. Later chapters will explain in detail why these events are, in the main, irrelevant and some of them may even be damaging.

For the moment, let us consider the following. According to the dividend yield approach to share valuation, a share can have increased value only if there is a likelihood that its dividend will rise faster than originally expected. We ask ourselves in what way events like bonuses, rights, mergers and re-organisations in themselves can improve the future dividend picture of a company. If these events cannot lead to such an increase, the share surely does not deserve a higher valuation.

It is hoped that readers are, by now, at least partially convinced of the wisdom of buying a share for its dividend. In later chapters, the range of dividend yields which is reasonable for different categories of shares will be examined. In the meantime, I leave you with a short ditty that has been popular for years in the US and is still often quoted as advice to first time share buyers.

 

              A cow for its milk,

              Bees for their honey,

              And shares, by golly,

              For their dividend.

 

The above passage is taken from the book "STOCK  MARKET INVESTMENT" in Malaysia And Singapore

By Dr . Neoh Soon Kean of Dynaquest Sdn Bhd (pp 148 to 150) Published in year 1985.

 

Calvin comments:

According to Dr. Neoh, "A dividend yield of 12 per cent seems to be the floor below which  most stocks will not drop".

In the Deepest Depth of the Lehman Brothers' Crisis after Bear Sterns & Lehman Brothers both gone bankrupt Warren Buffet bought into the safety of Goldman Sachs' Preference shares with guaranteed 10% yield.

Now take heed to Dr. Neoh's warning, "In sharp contrast,  shares which pay low or no dividend at all do not seem to have any bottom and price decline can hit 90 per cent or more".

The characteristic of past bear markets like the Tulip Mania, The South Sea Bubble, The Great Depression of 1930s in USA, the Stock Market Rout of Asian Finacial Crisis in 1997/8 and The Lehman Brothers' Debacle of 2007/8 have witnessed many stocks & index crashing up to 90% or more.

 

Now coming back to Palm Oil Dividend Stocks

 

1) TAANN giving 30 SEN DIVIDEND For YEAR 2021 is ABOUT 9.1%

 

At Rm3.27 the 30 Sen Dividend translates to a very nice 9.1%

One more quarter to go bear Year 2021 ends

Chances of TAANN giving one more Final Dividend will Push Dividend yield to Double Digits

 

2) BPLANT at 68.5 sen has a dividend yield of 6.3%

 

Now Bplant will yet give another Good Dividend in the 4th Quarter (Cpo prices at its highest over Rm5,000 can expect excellent dividend to push it near TAANN's Record)

 

And by First Qtr BPlant is disposing A Palm oil Estates in Kulai to YTL Power for another 16.1 SEN PROFIT

At the dividend policy of 6% from Profit

So 16.1 sen X .6

= 9.66 SEN DIVIDEND FOR YEAR 2022

AND THAT NOT INCLUDING ITS HEIGHTENED INCOME FROM HIGH OPERATING PROFITS OF CPO AT NEW RECORD

That means Bplant dividend this year already SO GOOD will SEE EVEN BETTER DIVIDEND NEXT YEAR IN 2022

SUCCESS REALLY BEGETS SUCCESS

 

3) THPLANT

THPLANT HAS RAISED RM313 MILLION CASH IN ITS LATEST QTR RESULT

EITHER TO TAKE COMPANY PRIVATE OR POSIBLE REUMPTION OF GOOD DIVIDEND YEARS

 

 

WARM REGARDS

 

Calvin Tan

 

Please buy or sell after doing your own due diligence or consult your Remisier/Fund Manager

 

DIVIDEND HISTORY OF TAANN

 

 

DIVIDEND HISTORY OF BPLANT

 

 

 

 

 

DIVIDEND HISTORY OF THPLANT

 

 

 

 

A STOCK FOR ITS DIVIDENDS

Dividends: Definition and Impact of Dividends on Stock & Share Prices

 

 

 

 

 

 

 

A COW FOR ITS MILK

Cow Milk Cup Images, Stock Photos & Vectors | Shutterstock

 

 

A hen for her eggs

48,660 Hen And Egg Stock Photos, Pictures & Royalty-Free Images - iStock
 
 
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calvintaneng High dividend example

SEE'S CANDY

Warren Buffet Bought See's Candy for Usd25 millions

Over the years SEE'S CANDY HAS PAID OUT 20% DIVIDEND WHICH WARREN BUFFET REINVESTED IN OTHER COMPANIES

TOTAL VALUE SEE'S CANDY GAVE IS USD2 BILLIONS

PALM OIL LIKE SEE'S CANDY IS A CASH BUSINESS

SO PALM OIL HIGH DIVIDEND COULD BE REINVESTED IN OTHER GOOD COMPANIES
01/12/2021 11:21 AM
Intrinsic99 When promoter always so much of sweat talk so much of approach for sure this iddiot spammer (hantu @calvin) wanted to cash out from the stock purchased

Other members also buying valuable stocks but not behave like this iddiot spammer

We all feel ridiculous nonstop posting nonstop promoting

As I said earlier, if you so confidence to wait and if you so confidence what you invest why everyday need to promote, why everyday put up so many blog, why everyday go different stocks forum keep on promoting your palm oil stocks?

This is very obvious you desperately want to cash out your share bought and treat other members as waterfish.

Now all open your eye and see this iddiot spammer sold all MHC stock since this iddiot spammer so confidence about the palm oil sector earlier and keep on promoting to all members everywhere.


https://klse.i3investor.com/servlets/forum/600571451.jsp

>>>

I so pity members here listen to this iddiot end up you can burn you hard earned money and this iddiot laughing at you later.


In the real world, no free lunch to people unless you want to take advantage from others

I don't know why 3iii administrator didn't take any action to suspend this iddiot account to avoid further keep on spamming everyday and every way

I pegging administrator need to take proper action against this spammer in order to strengthen protection more and more victim investors.
01/12/2021 3:27 PM
stockraider Do not listen to Intrinsic99 loh!

His name is intrinsic...but when he invest...he do not based on intrinsic value loh!

He is easily kon by " Mr Market" loh!

Remember loh Taann & bplant have huge margin of safety & back up by business prospect & intrinsic value mah!

Lu tau boh ?
01/12/2021 3:51 PM
pokerpro88 Thank you intrinsic for telling the truth
02/12/2021 7:46 AM
value_seeker Well said.
02/12/2021 7:58 AM
calvintaneng Bplant gave 6.3% dividend

TAANN gave 9.1%

This is the truth

Even if 99 other persons say false it does not change the facts & figures

THE TRUTH IS STILL THE TRUTH NO MATTER WHAT PEOPLE SAY OTHERWISE

And Calvin ALWAYS STAND ON THE SIDE OF TRUTH
02/12/2021 8:02 AM
joerakmo Huge difference between 'NOW GIVING' and "GAVE". eg Topglov...go buy lah 23.76% yield!!
02/12/2021 9:35 AM
pokerpro88 @joe...you are right...now just wait for a silly rebuke
02/12/2021 11:34 AM
PlantBull You must be real ignorant to say that @joe... Look at bplant and taann price before they announced and issued dividend vs topglov... Topglov price was already fried up even before they gave out super dividends. Plantations price was low, and now still low.

Go and see what was bplant highest price la.. 75 Sen?? Even u buy at 75 Sen total up the dividend you still get 4.5 Sen dividend lor... That's still a whopping 6%... Now if you take topglov top price which was 20 bucks... With the given dividend... Topglov got give you 1.20 ringgit as dividend to get 6%??

Do some homework lor before You spew rubbish
02/12/2021 1:40 PM
warrenchok90 long live palm oil counter!!
02/12/2021 2:30 PM
CCWONG All the real fundamentals have been mentioned about Taann & Bplant and perhaps other oil palm listcos.

Always remember this rule:

1. What is a Sun Rise Industry? Always with sunlight - Oil palm.

2. What is a Sun Set Industry? You check it out yourself - Many there.

No argument, it is based on facts, figures & reality.
02/12/2021 2:34 PM
joerakmo @plantbull.

as per calvin's method topglov yield of 23.76% is THE TRUTH.

You go do homework. next div 1.75cents ex div 8dec.You buy 75 cents end Oct onwards, and now 67 cents you just paid yourself the dividend and lost money.
You dont see the message! Who spew rubbish ??

Your money you likes lor
02/12/2021 3:50 PM
joerakmo PS there is a REAL yield of 4.44% within 1 month.......

.... sorry no can tell
02/12/2021 4:00 PM
risktoreward I’m heavy into both bplant and taann. Can sleep well
02/12/2021 4:03 PM
stockraider Very good buy mah!

Posted by risktoreward > Dec 2, 2021 4:03 PM | Report Abuse

I’m heavy into both bplant and taann. Can sleep well
04/12/2021 11:03 AM


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