Do's and dont's of dividend investing

  1. 9

    Don’t Chase the Highest Dividend
    Do Understand the Company You’re Investing In
    Do Study a Company’s Cash Flow Statement
    Do Look for Companies with a History of Increasing Their Dividends
    Don’t Cash in Your Dividends

    Any more points?

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  2. 62.1k

    a big fan of DRP

    extra points ??

    what about an obvious one DON'T chase the div. ( regardless of the stock value )

    as an example .... due to lucky timing i bought WBC around $20.50 a share

    some urged selling when the SP rose above $35 ( nice on paper and for the tax man ) but then you need to replace that div. income with another source .

    i prefer a company the can reliably pay a div. ( even if it retains extra cash in the good times )

    no system is perfect everywhere

    keep some flexibility in your plans ( your golden goose can still be a take over target , and you miss out that way )

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  3. 7.5k

    CUP worries me. They have a three year restructuring plan during which they have reduced their divs from 3c to 2c.

    This sentence from the Chairman's Address of 10/11/16 is a bit concerning to me: "Quarterly dividends are expected to be maintained."

    Three years is a long time and the sp has drifted considerably lower (from $1.96) in the ~2 years since their restructuring began. I would have expected a more positive div announcement such as the time is coming when the divs can be increased again, instead of "Quarterly dividends are expected to be maintained." I never doubted before that they would be maintained, but that sentence implies that they have at least thought of reducing again. I think if they do the stock will dive further.

    I was going to buy more, but now I'm not so sure. I'm sick of being caught.
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    All IMO

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  4. 9

    I would also suggest not looking at what others are doing, except big investors.

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  5. 62.1k

    i suggest looking but THINKING ( carefully )
    CUP spun-off CL1 and i want to see more of CL1 before putting cash into then .

    in all my time of having money in CUP, was in before the CBA acquisition of COU ( when i exited and returned after CBA sold down )

    this has plodded but in such a way worry always nags you , one of my major holdings , but continues to pay regular divs. ( and i average down in some the paper losses to date isn't so horrid )

    not worry-free , but after ARI , UGL , GFF and several big names what is a 'good company any more ?

  6. 7.5k

    Giving CL1 a go, but the bots are really making hay with it today...

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  7. 62.1k

    not in my price range yet

    will wait a bit longer

    good luck

  8. 9

    The stocks that pay monthly dividend are also a good investment, it will be a steady income throughout the year.

  9. 62.1k

    monthly div. payers are hard to find .

    don't let the high frequency of div payments , dull your awareness to other factors

    i hold AOD and HVST ( both pay monthly , but the extra management fees take some shine off )

    both AOD and HVST are DRPed ( by me ).

    since HVST is priced via (portfolio ) NTA ( as are many ETFs ) timing your buying and top-ups is VERY IMPORTANT .

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  10. 62.1k


    Top Underlying Exposures - 30-Dec-2016
    Name %
    1 Westpac Banking Corp 13.8 %
    2 Australia & New Zealand Bankin 12.8 %
    3 National Australia Bank Ltd 12.6 %
    4 Macquarie Group Ltd 10.4 %
    5 Commonwealth Bank of Australia 5.8 %
    6 BHP Billiton Ltd 3.4 %
    7 Telstra Corp Ltd 2.6 %
    8 Wesfarmers Ltd 2.0 %
    9 CSL Ltd 1.9 %
    10 Woolworths Ltd 1.3 %
    As of close of trading 30/11/2016

    The information above shows underlying share exposures of the Fund.

    PLEASE NOTE ' Top Underlying Exposures ' does not strictly mean shares directly held by the fund

    the ETF does directly hold some shares , but the majority of 'exposure ' is via a holding in a Vanguard WHOLESALE fund ( similar to BUT NOT the same as VAS .. a retail ETF )

  11. 7.5k

    I don't know of any on the ASX that pay monthly. What I am doing is gradually filling out the year with stocks that pay quarterly, preferably, or failing that, other stocks that pay 6 monthly. It's hard for a 6 monthly to equal or beat quarterly though. At the moment I have holes in June and December, but I've plenty of time for them now that December has passed.

    The other criteria I have is for them to have a good yield, a high dividend stability, and preferably 100% franking, as well as being in the S&P/ASX 300, 200, or higher.

    CL1 fails a couple of those, but fundamentally it's young yet, and seems fairly strong. If it gets into a good profit for me I will probably sell it and get into something better, but for now it's a good place to park some money that was otherwise just idle.

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  12. 62.1k



    Aurora Dividend Income Trust (AOD, formerly Aurora Sandringham Dividend Income Trust) is an investment trust investing in Australian listed companies that pay fully franked dividend. The trust seeks to outperform the S&P/ASX200 Accumulation Index adjusted to include franking credits. The responsible entity of the trust is Aurora Funds Management Limited.

    does CURRENTLY ... but due to various control changes , that may not stay in that style nor continue to pay monthly . so extra care should be taken

    ( i hold AOD which is DRPed )


    BetaShares Australian High Interest Cash ETF (AAA)


    Aims to provide attractive and regular income distributions and a high level of capital security, and aims to generate a return that exceeds the 30 day Bank Bill Swap Rate (after fees and expenses).

    Profile - 30-Dec-2016
    Net Assets* ($A) $1,049,587,161
    Units Outstanding* (#) 20,926,333
    Mgmt Fees** (% p.a.) 0.18%
    Distribution Frequency Monthly
    Issuer BetaShares Capital
    Fund Administrator RBC Investor Services
    Custodian RBC Investor Services
    Registry Link Market Services
    Auditor KPMG
    * As of close of previous trading day
    **Certain additional costs apply. Please refer to PDS.****

    Current Deposit Accounts Westpac, Bankwest (CBA), Bank of Queensland, Rabobank, ME Bank
    Top Holdings - 30-Dec-2016
    Name %
    1 Australian Cash 100 %

    DRP status is unknown

    i DO NOT hold AAA basically a tricky/active way to invest in the short-term money ( and term deposit ) market .

    HVST ( mentioned above ) does

    but i am not currently aware of any other monthly payers ( easily traded on the ASX )

    3 monthly is more common , and MVB pays every 4 months ( the odd timing might suit some )

  13. 7.5k

    Sold CL1 for a modest profit, so I have more cash now to put into something better. At the moment I'm considering KMD or RFG.

    KMD would give me some diversification, while RFG would give me a Food Group share. I already have BFC, but it's a bit shaky div wise and I think RFG would be better. RFG (S&P/ASX 200) also has a div stability of 100% and is franked 100%.

    KMD is a bit of an outsider, but has made it to the S&P/ASX 300, and was paying 100% franked divs a while back, so may again.

    Just kicking these things around atm.

    BTW, where has Gwenstacy gone? She/he was good value as far as dividend knowledge goes.

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  14. 62.1k

    you surprise me Recklyn , i thought you might have stayed months longer

    i was looking for an entry price entry but lost patience and picked up some BST instead ( 6 month divs but might grow SP and div return )

    will wait longer for a possible CL1 entry price .

    good luck , it is no easy task picking targets (and getting them at a fair price )

    another LIC that caught eye but not my heart was AQF(Australian Governance Masters Index Fund Ltd )

    seems to pay 3 unequal divs a year

    will need to research more first

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  15. 7.5k

    The return, even for a quarterly payer, was too low Sal. At 1.1% and no franking I thought it better to just use it as a profit taker.

    Your BST looks interesting, but I can't find what shares they include in their basket. I'm a bit picky when it comes to what shares I invest in.

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  16. 62.1k

    at 31 December 2016 104.08c( before AND after tax )

    Name of Company
    Percentage of
    Total Portfolio
    REA Group 11.05%
    Magellan Financial Group Ltd 10.38%
    Aconex Limited 9.27%
    Carsales.Com Ltd 8.23%
    TPG Telecom Limited 7.07%
    Total Top 5 Equity Investments 46.00%

    last month Sirtex Medical 7.66% (has dropped in SP since was No.4)

    INVESTMENT ACTIVITY( share-holders quarterly Sept. 2016)
    During the quarter, we did not add any new names to the portfolio.
    The largest contributors to this quarter’s performance were Sirtex Medical (ASX: SRX),Trade Me Group (ASX: TME) and BT Investment (ASX: BTT),which posted returns of +24.6%, +19.5% and +10.3% respectively.
    During the quarter Cover More Group (ASX:CVO) acquired Travelex Insurance Services which is
    the third largest travel insurance specialist in the USA.
    This acquisition will help CVO accelerate their entry into the US and provide a platform for future expansion.

    PORTFOLIO CHARACTERISTICS (as at 30 September 2016) NTA (before tax on unrealized gains) –total $20,516,338 NTA (before tax on unrealized gains) –per share 112.00
    Concentration of the Top 20 Holdings
    Stocks in the underlying portfolio

    not that special i also hold rival CIE , a similar concept but like different stocks ( might be timing as well)

    picky is OK by me ( but i can't afford to have too much cash in the bank earning pennies )

    i buy these style LICs because i am unlikely to buy most of thesharesin the basket heavily ( or at all )

    i hold TPM (free-carried), BTT( free-carried ) and TME of those mentioned .

    i can't fault you logic , just thought you would have held longer ( to see what happened next )

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