High Dividend Yield Stocks - Attractive?

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High Dividend Yield Stocks - Attractive?

RicheHo

Publish date: Sun, 30 Aug 2015, 01:23 AM

Share investment had two types of incomes:

· Capital appreciation

· Dividend income

Every investor has their own method of investing that suits them the most. For youngsters, normally they are more to risk seeker while for elder person they are more to risk adverse. High dividend yields are attractive to investors who desire current income and stability with lower risk. This yield is then reinvested. This process of reinvesting repeats itself for as long as you own the stocks. As the interest on your investment is compounded, it will greatly increase your return over the time.

Dividends are money in your pocket, and after they’re paid they can’t be taken from you. The share price movement of a company is mainly affected by market sentiment and the company earnings. However, dividends are mainly affected by company earnings itself only. No matter how bad the market condition is, as long as the company is still making good profit, they will still declare good dividend regardless how low is their share price! Unless the management is not generous or they want to retain for expansion, then that’s different story.

Last day of July = 1,699.92

Last day of August = 1,612.74

KLCI index had dropped 87.18 points, which is equivalent to 5.13% in August. Many shares had dropped below their support line and some had broken a new low. I not sure whether the market will still going down but investors may start to collect some good undervalue stocks. There are many good fundamental companies with cheap price in the market. Heavy drop in August made those high dividend stocks more attractive. So, for some investors, it is a good opportunity to collect, isn’t it?

High dividend yield is one of the powerful tools which can help us to achieve financial freedom. For example, if you invest RM1million in REITs by retirement age, with average D/Y of 6% after tax, you will get RM60k annually, which equivalent to RM5k passive income a month! By that time, you do not need to do anything, to get RM5k a month. This is what we called financial freedom.

Before I stop here, I would like to share some good consistent earning company and REITs with D/Y more than 6% (as at 28^th August 2015).

No.	Stocks	Price	D/Y
1	Tasek	15.000	11.33%
2	Media Prima	1.050	10.48%
3	SEGi	1.400	9.29%
4	Rexit	0.400	8.75%
5	Perstim	4.210	8.31%
6	Magnum	2.600	7.69%
7	Atlan	4.560	7.68%
8	CCM Duopharma	2.450	7.55%
9	YTL E-Solutions	0.535	7.48%
10	Padini	1.370	7.30%
11	BJToto	2.950	7.29%
12	CYL	0.700	7.14%
13	Star	2.540	7.09%
14	JCY	0.640	7.03%
15	Classic Scenic	1.150	6.96%
16	Uchi Tech.	1.450	6.90%
17	Deleum	1.080	6.48%
18	Yi-Lai	0.805	6.21%

No.	REITs	Price	D/Y
1	Atrium	1.04	8.94%
2	Quill Capita	1.04	8.06%
3	YTL	1.04	7.67%
4	AmanahRaya	0.83	7.52%
5	Amanah Harta Tanah	0.97	7.42%
6	UOA	1.50	7.37%
7	Amfirst	0.78	7.14%
8	Hektar	1.51	6.95%
9	IGB	1.31	6.39%
10	Axis	3.27	6.04%
11	Sunway	1.49	5.86%
12	Tower	1.10	5.82%
13	Alaqar	1.34	5.71%
14	Pavilion	1.51	5.44%
15	Capitamalls	1.33	3.47%

Note: Atrium had just disposed one of its properties and it is giving out higher dividend from its gain on disposal. On the next quarter and onwards, its earnings income expects to b drop and will not be able to pay high dividend. YTL had proposed private placement which expect to be done on beginning of next year. By the time, the company earnings will be dilute and investors will get lesser dividend for each share.

Feel free to comment.

Just for sharing.

http://rhinvest.blogspot.com/2015/08/high-dividend-yield-stocks-attractive.html

Discussions

9 people like this. Showing 15 of 15 comments

citychew_1886

Hi Richeho , yes ,high dividend always be the safe net for us ,especially in the unstable market just like now .
and may i know what is the difference between private placement and right issue ? are they the same ? many thnks .

2015-08-30 07:29

RicheHo

Hi citychew_1886, private placement was issued to third parties by the company itself, normally is up to 10% of the paid up share capital. Right issue was for public shareholders like us. For example if the company has 100m paid up share capital, when its declare right issues 1:1, that's mean they will issue another 100m share capital. Public shareholders are entitle to this and basically they are "force" to subscribe, else they can choose to dispose it before the ex-date.

Both private placement and right issue had the same objective, to raise fund. Hope its help.

2015-08-30 11:50

king36

I wish you can knock your ideas into some CEO's head.
They sit on piles of cash and use them for their own amenities but refuse to pay dividend to shareholders!
What an immoral white-collar cheat!

2015-08-30 12:53

citychew_1886

ok, now i get it , thanks so much Richeho .

2015-08-30 17:42

ykloh

I am not too sure if now is the right time to go into reits. Property prices are falling due to oversupply and revaluation losses are to be expected. In addition, rental is at best flattish and not much earning growth in the medium term. Most reits are geared to about 50% and if interest rates are increased, earnings will be severely affected.

2015-08-31 00:42

calvintaneng

THE ONLY THING OF VALUE IS FOUND IN SECONDARY PROPERTY MARKET OF JOHOR

These are the Current Prices of Houses in KL, Selangor, Penang & Kuching

Low Cost House - Rm350,000
Single Storey House - Rm500,000
Double Storey House - Rm1 million

These are the current price of 2nd hand houses in Iskandar

1) Low Cost house - Rm50,000
2) Single Storey house - Rm190,000
3) Double Storey house - Rm290,000

There is an Upsurge of demand for rental houses in Johor due to overwhelming demand. The yield is over 8% to 20% easily. So go for landed houses in Iskandar when they are still Dirt Cheap!

2015-08-31 01:05

Fund_Manager

calvintaneng, why are you promoting Iskandar so hard? Do you receive commission for this? Or you have invested too much money into Iskandar?

2015-08-31 01:58

nokenzo

Buy no brainer share with a premoum in SGX and keep. This, we can recoup the devalued Ringgit and make a profit. Mr Calvin care to recommend a few of Singapore stocks?

2015-08-31 06:41

calvintaneng

Good morning from Calvin Tan from Jurong West, Singapore

Fund_Manager,

Just before the Asian Financial Crisis in 1997 I visited Perth in Australia. There was a property boom in both KL & Singapore then while Australia was in a recession.

My tourist guide bought a bungalow in Perth for only A$120K. It is freehold with 6,000 sq ft land. At the same time my HDB Flat (4 rooms) has appreciated to S$300K.

I could have sold the HDB Flat and bought 2 Bungalows in Perth with Extra A$69K then. Exchange rate then was One Sing Dollar for One Aussie Dollar.

Fast forward to today. The HDB Flat in Spore now worth S$500K But the Aussie Bungalow has skyrocketed to A$1.5 Millions.

So I SEE the same opportunity now in Iskandar just like the year 1997 when Perth's properties were going for a song.

Nokenzo

I like Singpost in SGX. Singpost is recession proof. It is also a monopoly. And it has upgraded into e commerce and distribution of goods. It is also linked with Alibaba of China. Both are taking away sales from Parkson. Best of all Singpost gives dividends several times a year.

Another very good one is Shengsiong.
Shengsiong will benefit greatly when the Malaysian Authority impose Vehicle Entry Fee for Spore Cars this coming September 2015. They will shop in ShengSiong for all supermarket needs.

Shengsiong is hands on & value add to their business. They are even willing to do the dirty and messy job of buying a whole cow. Cut it into pieces and sell them at higher profit of up to 50% more.

My neighbour who operates a mini market said that wherever ShengSiong opens a supermarket nearby all mini mart will have to close shop as ShengSiong can even sell below their purchase price.

Why is it so?

Because every day hundreds of lorries are bringing in goods for ShengSiong from Malaysia. As ShengSiong buys in bulk they get the lowest price for all their products.

2015-08-31 09:56

hsteoh56

hello! Mr Calvintaneng, my house in Tiram will be vacant by the end of next month, if you have ready customers want 2 rent a house there, please email me hsteoh56@gmail.com for further details. Thank you.

2015-08-31 11:52

calvintaneng

hsteoh56

Please sms me at 0146101668

House address and how much you want to rent the house for.

2015-08-31 12:01

nokenzo

Mr Calvin, thank you very much.

2015-08-31 13:17

NOBY

One thing is to avoid falling into dividend traps. Some companies show high yields because their share price has been falling perhaps due to some fundamental problem. Its also important to look at the cash holding of the company and the dibidend payout ratio. If cash holding is low and company is paying out more than earnings, it will likely cut its dividend in future. Look for companies with stable earnings and stable payout ratios. Also look for companies that grow their dividend payments.

2015-08-31 16:35

I_like_dividend

Media Prima ranked no 2 with DY 10.48% is very good buy now with latest EPS 3.96sen and 3 sen dividend next week.

2015-09-01 06:08

Wenyee Chuan

hi dear richeho, may i know is there any effect on dividend if the company earnings decrease? since u say that dividend only depend on company earnings. For example, a company gv a dividend of 6%, will it be forever 6% no matter how low the earnings of that company.

2015-10-11 12:17

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