High yeilding shares v LOE
- Thread starter dheath
- Start date
NAB just reported a yield of roughly 4% p/a. Also the ASX200 yield is only slightly above 4% last time I checked.
I will get more yield than that on my 3br house purchased in Brisbane recently.
I have made a note to investigate this further, but I was surprised the yield was so low. You need a lot of shares to live off the dividends when they are only yielding 4%.
There are better yield options out there, but it seems to be an endangered species world wide, the yield hogs are hunting these things to the brink. Where is the value in absolute terms these days?!
Possibly someone can help a bit more on topic than this though.
I will get more yield than that on my 3br house purchased in Brisbane recently.
I have made a note to investigate this further, but I was surprised the yield was so low. You need a lot of shares to live off the dividends when they are only yielding 4%.
There are better yield options out there, but it seems to be an endangered species world wide, the yield hogs are hunting these things to the brink. Where is the value in absolute terms these days?!
Possibly someone can help a bit more on topic than this though.
also don't have the ongoing costs and management issues with a property.
high yielding stocks do not necessarily mean low growth either ... Check out JBM over the past few years
I think over time, a well selected share portfolio will provide the dividend growth and capital growth to enable the living on equity/living on assets, if you target companies with high earnings growth, paying increasing dividends, low debt
OSS
high yielding stocks do not necessarily mean low growth either ... Check out JBM over the past few years
I think over time, a well selected share portfolio will provide the dividend growth and capital growth to enable the living on equity/living on assets, if you target companies with high earnings growth, paying increasing dividends, low debt
OSS
You're right Andrew, yields have dropped considerably. Maybe it's the fund managers going defensive, or getting ready for the baby boomers that are going to need income. Or maybe a sign the bust is just around the corner. It's hard to find value.
TLSCA, TLS, TAH & WES are the only stocks I hold that are yielding > 7.5%. My portfolio (after franking) yields 5.76%. To compare with IP. Next year it's forecast to yield 6.23%, and the following 6.65%. My IPs current gross yield is 2.9%, forecast to be 2.94% next year. So forecast growth in share income is 7.7%pa, IP is 1.4%.
And just to nitpick - NABs div (announced today) is only 90% franked, and the ASX200s is (I think) a fair bit less than that.
Cheers Keith
Hi Trogdor, Wasn't me, it was bort - I got some too - it seems to trade at it's NTA after tax unlike some other LICs. I probably should have added that 3 of the 4 high yielding stocks I mentioned are forecast to have lower (or equal) divs next year
. However, the rest of the portfolio is expected to have much higher growth. I reckon the big boys are probably tending towards yield.Cheers Keith
In ten years time your money deposited at ING will still be the same figure - eroded by inflation.
With a yielding share the return will have grown and the value as well.
Sure the risk seems higher but I think that leaving your cash in ING for the long term is even higher risk.
Risk is not the same over different time frames. If you are talking short term (ie. Days/Weeks/Months) than Cash is clearly lower risk than shares no matter how well selected.
However, if you are talking long term (ie. years/decades) than Cash is clearly higher risk than well selcted shares.
The risk holding cash long term is due to inflation (which is pretty much guaranteed to occur over long term) whereas the risk holding shares over the short term is related to potential for loss of capital (which may or may not happen and the flip side is the potential for capital growth.)
I have always believed that cash is by far the riskiest investment asset over the long term.
Jase
I just did the calcs on NAB and the div yield is 3.86% (sorry about the three significant figures, I hate them too.) on today's closing price.
Had I bought ZFX "recently" (as you describe your Bris property) I would be enjoying a 10.96 div yield. (10/5/06 closing price)
Not really trying to be smart but it is time some sort of rules were set for these comparisons:
Rule 1: Because the Jan Somers program is built on the concept of "being fully leveraged, at all times" quoting gross returns for residential property is a free kick to the other side.
Rule 2: Account for all costs.
Rule 3: Factor in franking when discussing net returns.
Rule 4: Accept that intelligence and application can improve returns in both markets but probably more so on the ASX (the second bit is personal opinion only).
etc
Rule 15: Do your own sums.
In fact, some people here will secretly admit that cash is such a bad thing that they take the exact opposite view, and BORROW cash
from all those people that think its low risk.
Cash is the highest risk. You are guarenteed to lose in the long run.
See ya's.
See ya's.
Ha ha. I reckoned you were wrong. Was gunna prove it. NAB would have a higher yield than that!
You are right. And 4.4% for 08.
Shares have risen a heap eh. Lucky we got in when they were really cheap then I reckon. Might have to take some more profits.
See ya's.
While I was having tea, getting another beer and composing my last reply the concept of "perceived risk" came up.
I could buy two IPs this weekend and would expect them to be duly financed. I wont. In my mind, there is a real risk (greater than 30%) that there will be a credit squeeze before the decade rolls over. For me that is too great a risk. This is not a prophesy and I do not expect anyone else to allow for it in their own decision making. It is how my mind works, is all!
On another thread my habit of buying penny dreadfuls was called "risky". I beg to differ. These are "no liability" or "limited liability" companies so I cannot lose more than my punt. There is no ongoing commitment And oddly, these cos don't go broke, they "languish" so you can almost always retrieve a few cents, unlike HIH. LOL
The "golden years" for picking big winners was early in the decade. It seemed so easy. I even picked a couple (Sadly I had a pisspoor bank). Both shares and property look fully priced now so you may need to be "Smarter than the average bear!" When the going gets tough .............
I could buy two IPs this weekend and would expect them to be duly financed. I wont. In my mind, there is a real risk (greater than 30%) that there will be a credit squeeze before the decade rolls over. For me that is too great a risk. This is not a prophesy and I do not expect anyone else to allow for it in their own decision making. It is how my mind works, is all!
On another thread my habit of buying penny dreadfuls was called "risky". I beg to differ. These are "no liability" or "limited liability" companies so I cannot lose more than my punt. There is no ongoing commitment And oddly, these cos don't go broke, they "languish" so you can almost always retrieve a few cents, unlike HIH. LOL
The "golden years" for picking big winners was early in the decade. It seemed so easy. I even picked a couple (Sadly I had a pisspoor bank). Both shares and property look fully priced now so you may need to be "Smarter than the average bear!" When the going gets tough .............
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