the bursa journey that worked for me. 2000-2019
How Warren Munger beat Ben Graham or WHEN 10% DIVIDEND YIELD IS BAD.
Philip ( buy what you understand)
Publish date: Fri, 25 Jan 2019, 12:22 PM
Hi all,
Just a short one, a quick idea for fellow investors to chew on before I catch my flight.
Which is better? Buying a company with high dividend yields or buying a growing company with low dividend yield.
Let's do real world math.
If you bought topglove in march 2010 at its highest price of 6.95
, By today you would have 3 bonus issues and share price right now of rm4.97.
Each of your now 8 shares would give you 12 cents dividend, giving you a total yield of 96 cents per year from your investment price of rm6.95.
Lousy 1% dividend indeed.
Compare that to hektar reit. Back in 2010, you were getting yearly dividend above 10%, at a share price of around 0.98 dollars and 12 cents dividend.
Today your share price is rm1.14, and you can expect to get around 12 cents dividend per year.
Awesome 10% dividend yield, yeah!
Now think long and hard on the fallacy ofof prime concept.
Is HIGH DIVIDEND YIELD always a good thing?
Hope you learned something.
Philip
More articles on the bursa journey that worked for me. 2000-2019
THE GROWTH STOCK OF THE FUTURE - HOW TO INVEST IN MALAYSIA
Created by Philip ( buy what you understand) | Dec 07, 2022
(Philip) 3rd & 4th Quarterly Report for The Borneo Bikers Gang
Created by Philip ( buy what you understand) | Mar 02, 2020
2019 2nd Quarter Report for the BORNEO BIKERS GANG - Part 1 & 2
Created by Philip ( buy what you understand) | Jun 30, 2019
Does technical analysis really work? Discussion.
Created by Philip ( buy what you understand) | May 20, 2019
Discussions
1 person likes this. Showing 21 of 21 comments
How am I misleading? It is a given fact that REIT company's are being sold today to uneducated investors by spouting high dividend yields of 10% even today.
I am only being fair and not causing another ruckus by not comparing QL Vs INSAS dividend yields.
As some investors seem to have a mindset that high dividend paying companies are better than low dividend paying companies.
And they keep comparing that Nestlé and QL is a bad investment because it pays a low dividend.
2019-01-25 13:05
Wrong. I am comparing between 2 companies that generate 10% dividend yield and 1% dividend yield.
Then I add in backstory so you can have some business sense.
After I explain then it is clear to see.
Those who know, they know lo. Good for you.
But my article is not meant for people like you.
2019-01-25 13:13
Btw, I visited dynaquest before long long ago when they were releasing the spg. I bought the first edition at mph. I've even met the analyst team before. I know their analysis is not always right.
2019-01-25 13:29
I think reits serve a function mah....!!
If u r a fd depositors enjoy interest fixed 4% pa...u may decide to be slightly more adventurous buying to reits giving u yield 5% to 7.5% pa with a view of long term capital appreciation keeping in line with inflation.
To be fair Nestle is definitely is better than QL loh....bcos it pays better div and have a better focus moats loh...!! Eventhough both are overvalue with PE above 50x mah...!!
Posted by 10154899906070843 > Jan 25, 2019 01:05 PM | Report Abuse
How am I misleading? It is a given fact that REIT company's are being sold today to uneducated investors by spouting high dividend yields of 10% even today.
I am only being fair and not causing another ruckus by not comparing QL Vs INSAS dividend yields.
As some investors seem to have a mindset that high dividend paying companies are better than low dividend paying companies.
And they keep comparing that Nestlé and QL is a bad investment because it pays a low dividend.
2019-01-25 14:07
Topglove performance depend which period u compare loh....!!
If u compare going fwd comparison 1 yr agst insas...raider think topglove hard to beat insas mah...!!
Posted by 10154899906070843 > Jan 25, 2019 01:05 PM | Report Abuse
Posted by cheoky > Jan 25, 2019 12:42 PM | Report Abuse
dont mislead. u picking best company of low dividend with growth category vs so so company of high dividend with min to non growth category.
just follow dr neoh advise. buy dividend paying with growth element companies. we will do well in long run.
How am I misleading
? It is a given fact that REIT company's are being sold today to uneducated investors by spouting high dividend yields of 10% even today.
I am only being fair and not causing another ruckus by not comparing QL Vs INSAS dividend yields.
As some investors seem to have a mindset that high dividend paying companies are better than low dividend paying companies.
And they keep comparing that Nestlé and QL is a bad investment because it pays a low dividend.
2019-01-25 14:11
How would you even know that when the result of quarterly report not even out?
Stockraider got crystal ball is it? If got crystal ball how come 2010 never join me sailang topglov and keep buy until today?
Your crystal ball rosak la. If you couldn't predict performance of insas Vs topglov 10 years ago what makes you so sure you know exactly how they will play out 1 year from now?
No one can predict.
Not even me. That's why I keep buying for 40 quarters straight after every quarterly report good results.
Now if only stockraider can predict for me his crystal ball when my plane will arrive.
2019-01-25 15:24
THURSDAY, 1 DECEMBER 2011
How good are the returns from REITS?
Here is a nice table depicting the returns from 22 Singapore REITS. This table was posted in this blog:
http://cgmalaysia.blogspot.com/2011/11/reit-myth-busted.html
18 of these REITS were launched before 2009, 1 in 2010 and 3 in 2011.
Questions:
1. What are the possible reasons for one REIT giving a better return on capital compared with another? For example, the 64.8% return on capital of Suntec Reit (started in Dec 2004) beats the 39.5% return on capital of Fortune Reit (started in August 2003)?
2. By law, 90% of earnings of REITS are distributed as dividends to the shareholders. This leaves little money for reinvesting for growth. How are the good managers of REITS seeking money to grow the company?
3. Note that of those 18 REITS launched before 2009, 14 raised new capitals from cash calls from the shareholders. Only 4 of these 18 (Frasers Centrepoint Trust, Suntec Reit, ParkwayLife Reit and CapitRetailChina Trust) did not ask for any subsequent cash calls. What distinguishes the 2 groups of REITS and their managers - those seeking cash calls and those not seeking cash calls from the shareholders? Are there significant differences between the returns on capital between these 2 groups? How are the managers of the 4 REITS that did not seek further cash calls, seeking growth and growing their earnings?
4. Of the REITS raising cash calls from the shareholders, the amount raised exceeded the dividends paid to the shareholders over the same period in 9 of these 14 REITS. In the remaining 5, the cash calls were a significant percentage of the dividends distributed to the shareholders over the same period. Many of those who invested in REITS are seeking passive income to supplement their living and may not have further capital to reinvest. What is the impact on the return on the capital to the group of shareholders who were unable to take up the rights issue?
5. For those with the money, would taking up these cash calls give them a better return on capital than if they did not?
These are some interesting points to ponder further.
2019-01-25 15:28
Why I don't own REITS for their income?
Reits invest into properties.
Returns from properties are from:
- rental yields
- capital appreciation
What is the rental yield of properties today?
Subtract all the costs?
What is the net rental yield of properties today?
What is the potential capital appreciation for the next 5 years?
2019-01-25 15:37
The issue here is what is the value of the reits mah....!!
Are the buyer overall underperform taking into account his dividend plus the value of his reits he hold v the cost of putting in fixed deposits and cpf leh ???
Furthermore we are looking at outdated 2011 info for assessment mah...!!
THURSDAY, 1 DECEMBER 2011
How good are the returns from REITS?
Here is a nice table depicting the returns from 22 Singapore REITS. This table was posted in this blog:
http://cgmalaysia.blogspot.com/2011/11/reit-myth-busted.html
18 of these REITS were launched before 2009, 1 in 2010 and 3 in 2011.
Questions:
1. What are the possible reasons for one REIT giving a better return on capital compared with another? For example, the 64.8% return on capital of Suntec Reit (started in Dec 2004) beats the 39.5% return on capital of Fortune Reit (started in August 2003)?
2. By law, 90% of earnings of REITS are distributed as dividends to the shareholders. This leaves little money for reinvesting for growth. How are the good managers of REITS seeking money to grow the company?
3. Note that of those 18 REITS launched before 2009, 14 raised new capitals from cash calls from the shareholders. Only 4 of these 18 (Frasers Centrepoint Trust, Suntec Reit, ParkwayLife Reit and CapitRetailChina Trust) did not ask for any subsequent cash calls. What distinguishes the 2 groups of REITS and their managers - those seeking cash calls and those not seeking cash calls from the shareholders? Are there significant differences between the returns on capital between these 2 groups? How are the managers of the 4 REITS that did not seek further cash calls, seeking growth and growing their earnings?
4. Of the REITS raising cash calls from the shareholders, the amount raised exceeded the dividends paid to the shareholders over the same period in 9 of these 14 REITS. In the remaining 5, the cash calls were a significant percentage of the dividends distributed to the shareholders over the same period. Many of those who invested in REITS are seeking passive income to supplement their living and may not have further capital to reinvest. What is the impact on the return on the capital to the group of shareholders who were unable to take up the rights issue?
5. For those with the money, would taking up these cash calls give them a better return on capital than if they did not?
These are some interesting points to ponder further.
2019-01-25 15:47
In 2008 to 2010 raider was busy chasing other girls who are equally lucrative mah.....!!
Return is something like 40% to 50% return pa mah.....!!
2019 insas is my favorite girlfriend mah.....!!
Posted by 10154899906070843 > Jan 25, 2019 03:24 PM | Report Abuse
How would you even know that when the result of quarterly report not even out?
Stockraider got crystal ball is it? If got crystal ball how come 2010 never join me sailang topglov and keep buy until today?
Your crystal ball rosak la. If you couldn't predict performance of insas Vs topglov 10 years ago what makes you so sure you know exactly how they will play out 1 year from now?
No one can predict.
Not even me. That's why I keep buying for 40 quarters straight after every quarterly report good results.
Now if only stockraider can predict for me his crystal ball when my plane will arrive.
2019-01-25 15:52
Aiyah 3iii I was just about to do another follow up post about this to show how shallow stockraider idea of investing is when you posted it. Now I can't even look smart anymore:
3iii>>>
How good are the returns from REITS?
Here is a nice table depicting the returns from 22 Singapore REITS. This table was posted in this blog:
http://cgmalaysia.blogspot.com/2011/11/reit-myth-busted.html
18 of these REITS were launched before 2009, 1 in 2010 and 3 in 2011.
2019-01-25 15:52
He thinks investing in just simple numbers gain without think about the business sense of how a REIT really makes money. Fixed deposit is worth holding because the rates and benefits are fixed. For REITs they entice you with high dividends then rights issue your ass to the wall. Do you think your earning 10-15% returns, eh? See what happens long term.
Once you catch on to business sense it's addictive, no?
2019-01-25 15:56
come come...but pls lah....don be like 3iii post outdated 10 yrs ago info mah.....!!
Pls do a proper analysis instead of listening to hearsay loh...yes we hear that the reits....getting more cash from rights issue compare to its cash distributions....but point is, are the investors actually worse off by holding on to the reits leh ??
The reasons why reit keep asking for monies....bcos they have found good investment idea loh.....!!
Posted by 10154899906070843 > Jan 25, 2019 03:52 PM | Report Abuse
Aiyah 3iii I was just about to do another follow up post about this to show how shallow stockraider idea of investing is when you posted it. Now I can't even look smart anymore:
3iii>>>
How good are the returns from REITS?
Here is a nice table depicting the returns from 22 Singapore REITS. This table was posted in this blog:
http://cgmalaysia.blogspot.com/2011/11/reit-myth-busted.html
18 of these REITS were launched before 2009, 1 in 2010 and 3 in 2011.
2019-01-25 16:00
Hi klci, I read seeking alpha, I have a subscription to FT and Bloomberg. I also read bursa i3 often for ideas. I also read books from the usual suspects, a book I'm going through right now is market with. Hope that helps.
2019-01-27 20:38
I think the point is how u reinvested the 10% dividend and compound it in the long run..
2019-01-31 09:50
Dividend reinvestment is not as efficient as retained earnings reinvestment. A lot of book keeping, processing fees etc involved. Don't believe
Just look at your next dividend received from stock. You will notice a lot of processing fees, percentage fees etc taken. It is taken from both sides, the company side in taxes, and the service charges to both sides. My belief is if you can find a company that can efficiently reinvest your earnings into more revenue and profits, it is better to just let them do it. In the long run it is better, three dividend I get from ql is far more than what I would get from investing in higher dividend company's, simply from share splits alone, never mind the capital gain.
2019-02-03 15:45
Post a Comment
Featured Posts
Apps
Top Articles
1
Good Articles to Share
2
save malaysia!
3
4
THE INVESTMENT APPROACH OF CALVIN TAN
5
6
save malaysia!
7
南洋行家论股
8
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
MQ Trading Signals
Stock
Time
Signal
Duration
Stock
Time
Signal
Duration
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
cheoky
dont mislead. u picking best company of low dividend with growth category vs so so company of high dividend with min to non growth category.
just follow dr neoh advise. buy dividend paying with growth element companies. we will do well in long run.
2019-01-25 12:42