Here is a list of stocks that I generated using the following criteria
1. Market cap more than $50mn
2. Dividend yield more than 4%
3. Past 3 yr average ROE more than 9%
4. Past 3 yr FCF yield more than 7%
5. Past 3 yr EBIT margin more than 4%
Obviously, as with all quant screens, more work needs to be done to refine the results. The first counter definitely look strange. I mean, with dividend of 30%, in 3 yrs you get back your capital. How likely is that?
Chances are something is wrong with the firm or with the data.
The name that I thought might be interesting is Telechoice - which sells prepaid phonecards. With the immigration floodgate opening again, it might see some profit boost in the next few years.
The other safe and well-known dividend names like M1, Starhub, SATS etc, well should always try to buy more of these if you believe in the Singapore story.
Well a small gift to all the teachers reading this blog today!
"The first counter definitely look strange."
ReplyDeleteOn the contrary, you have to accept the fact that it indeed paid out the dividend. If you look at the past 10 years of dividend, you will see that it has surpassed the current market price by quite a fair bit.
To plagiarize, something is wrong with the firm, or with the data, or with the interpretation of the data.
Hi cif5000
ReplyDeleteThanks for pointing out something might be wrong with the interpretation.
I did say "chances are...", not that it must be 100% something wrong with the firm or data.
In fact I did a quick analysis of this firm and would like to share some findings.
But first, I would like to ask if you are a owner of the stock since 2001 or so? Have you received all your dividends and also what is your impression of the the firm and the management?
I must say that I have never looked at this firm in my life. I spent the last 10 min looking at its financials, and I must say it's baffling.
Basically it looks like this is a listed co. doing venture capital and also has a frozen food business.
The dividend yield hasn't always been 30%, it was zero for most of 2008-09. And the average yield over the past 10 yrs is much less than 30%.
Although the firm did pay out about S$180mn in dividends over the last 10 yrs, it also raise money for shareholders, but only to return most of it to shareholders the following yr. And last yr, raised money again.
Looking at the share price, it ranged from $0.8 to $4.5 over the past 10 yrs. I think if you have bought below $1.5, plus the dividends, you would have made good money. Over the last 10 yrs, about 20-30% of the time it traded below $1.5.
Of course if you have bought right after their rights issue in Dec 08when it was back at 80c, you would get 50c in dividend by now and have an unrealized gain of $1.3.
At this juncture, I can say that this is a strange firm that keep raising capital but yet not forgetting to return them to shareholders. It is definitely not as bad as some 100% value destroyers out there.
As to whether the 50c can continue for 3 yrs - my guess is that it is quite unlikely bcos it looks like this 50c was to compensate the rights issue done in 2008. My ballpark guess would be a sustainable 10-15c dividend, which puts the yield to 6-8%, still not so bad.
If you or anyone here knows more about this firm, pls do share!
IMHO, adampak worth taking a further look for both dividend and stock price grow.
ReplyDeleteTheir revenue and profit have been growing steadily for the past 4-5 years even through the period of recession in 2008-09.
I must have sounded rude, sorry for that. I only held the stock for slightly over a year and have not met the people before. This stock is quite simple when there is an opportunity for asset play. What's more is that the manager is obliged to pay out the dividend such that he also gets paid. So as investor, you get paid to wait. If you look at the incorporation information, they allowed the investors to petition for liquidation should the company not return $200m in terms of dividend (or similar) over 12 years. That has lapsed but the spirit is still there (as in the remuneration mentioned above). Of course, as venture capitalist, the return will be lumpy, but if one can get the assets at steep discount, he should do alright. The current price does not have that discount. The important thing is that one should not interpret 30% as recurring yield and "value" the company using that number at all. It's just dividend in one year divided over the current share price.
ReplyDeleteGreat site! Could you link my blog to your site? I have already done so. Thanks!
ReplyDeleteCheers!
FFN
Hi 8percentpa, do you know which other broker offers DCA other than POEMS SBP? Thanks.
ReplyDeleteHi 8percentpa,
ReplyDeleteI would like to enquire on how u arrived at your 12M dividend yield value as I've tried using the following formula:
annual dividends/price of share * 100%
But cant seem to get the same value as yours, kindly enlighten! Thanks in advance~
Hi FFN, will put up a link asap.
ReplyDeleteHi Anon, I do not know whether other brokers provide DCA, sorry.
Hi Newbie,
I use Bloomberg's dividend yield. I believe it calculates the last 12 month of dividend paid divided by current stock price.
The stock price I used for the screen might be different from yours. I did it some time in August.
Hope this helps.
Thanks 8percentpa!
ReplyDeleteHi 8PercentPa,
ReplyDeleteMay i ask what is your evaluation of Transpac ind?
And would it be possible to reveal your portfolio of stocks?
Its ok if you mind.. im just curious. :)
My analysis of transpac is in the comments above.
ReplyDeleteMy portfolio of stocks include Singtel, SMRT, SBS Transit and some other big cap names.
Some of them doesn't make sense now bcos I bought them years ago when they were cheaper.