Marks and Spencer is currently focused on international expansion and transforming itself into a true multi-channel retailer, but will that drive enough growth to offset its relatively weak dividend yield?
It’s an interesting question because, after looking at the company’s history, I think it would take a giant leap of faith to assume it can produce any kind of sustainable growth.
Continue reading “Marks and Spencer’s shares may disappoint investors”
In my last blog post, I took a brief look at the market’s defensive sectors and how they might be affected by a bond market crash.
Specifically, I looked at which sectors were most at risk from a valuation point of view. The basic idea is that as bond markets fall their yields will rise, and as a consequence, equity dividend yields will/could/should rise in response.
Therefore, the defensive sectors with the lowest dividend yields (and highest valuations) could be most at risk.
But dividend yields and share price valuations are not the only things that are likely to be affected by a bond market sell-off.
Continue reading “The defensive sectors most at risk from a bond market sell-off (part 2)”
A recurring theme in the news recently has been the global bond market sell-off and its impact on defensive shares, specifically those being branded as “bond proxies”.
There’s a good article on this subject on the Woodford Investment Management blog. In short, their conclusion was that a prolonged bond sell-off was unlikely in the short-term, but that “Credit markets are in dangerous valuation territory where capital losses ultimately look inevitable in the long-term.”
I’m not going to argue with Neil Woodford’s team; no doubt they are all immeasurably more intelligent and better informed than I am. What I will do though is take their basic proposition, that a major bond sell-off or bear market is virtually inevitable in the long run, and use that to investigate the risk that some defensive sectors may not be as defensive as some investors think.
Continue reading “The defensive sectors most at risk from a bond market sell-off”
Here’s a list of stocks you might find interesting. It contains five consistent dividend payers that are debt-free and highly profitable.
Companies like this are often very successful, with competitive advantages that allow them to grow while paying out much of their earnings as a dividend. Their lack of debt also gives them greater flexibility, which means they are less likely to cut their dividend when they run into problems.
These five companies each have:
- A 10-year unbroken record of dividend payments
- No interest-bearing debts
- A FTSE 350 listing (i.e. no small-caps)
- 10-year average post-tax return on capital employed (Net ROCE) above 15%
The companies, in order of profitability, are…
Continue reading “The 5 most profitable, debt-free, dividend-paying shares”
This list of stocks is for investors who are living off their dividend income or aspire to do so. It follows the tried and tested route of selecting big, reliable dividend payers in defensive industries with market-beating yields.
I could blather on about the merits of this particular investment approach, but I’m sure you’re already aware of them so I’ll just crack on.
Continue reading “5 High-yield FTSE 100 shares with progressive dividends”
Back in 2012, I bought a few shares in Greggs for 485p. To me, it looked like a solid, relatively defensive company with a good track record of dividend growth and an attractive near-5% dividend yield.
Continue reading “Shares in Greggs PLC are too expensive according to these metrics”
Profitability measures such as return on capital employed (ROCE) are a useful way to gauge the “quality” of a company. If a company can generate consistent returns on capital far above the cost of capital, that alone suggests some kind of durable competitive advantage or economic moat.
Continue reading “The 10 most profitable dividend-paying shares”
If you’re a keen investor then you will have almost certainly heard of the Fundsmith Equity Fund and its high-profile manager Terry Smith.
To date, the Fundsmith Equity Fund has produced results that are nothing short of spectacular – a total return of 100% in just over four years. But is such rapid growth sustainable?
Continue reading “Is the Fundsmith Equity Fund’s performance sustainable?”
Unilever is almost an obligatory holding for many dividend growth investors. That’s no surprise because the company’s consumer products (including brands such as Dove, Flora and Magnum) are well suited to a world in which a growing number of people are willing and able to buy those products.
Continue reading “Unilever’s slower dividend growth could mean it’s time to sell”