High Yield Portfolio picks

[Bumble]

For myself, I'm prejudiced against financials, so I wouldn't own HSBC, BARC, or AV.

Any reason not to include GSK?  Also, the house-builders pay fairly well: GFRD, TW, BDEV.

[vand]

12 hours ago, Bumble said:

For myself, I'm prejudiced against financials, so I wouldn't own HSBC, BARC, or AV.

Any reason not to include GSK?  Also, the house-builders pay fairly well: GFRD, TW, BDEV.

haha.. I'm the opposite. I like the financials and think the housebuilders could easily a big downturn. The time to buy housebuilders was in the years after the financial crisis; they are hugely cyclical stocks and have delivered stellar gains for holders, but they also crash heavily when the housing market takes a nosedive.

[Bumble]

Surely the financials will be worst affected if there is another financial crash. If you are just expecting a recession then OK, but then house-builders shouldn't be too badly affected. Having said that, I'm out of house-builders at the moment. Commercial REITS like BLND would also fall in a recession. I like GSK because pharma and healthcare is defensive. I also like RIO, though obviously a recession would reduce demand for industrial metals.

[vand]

18 hours ago, Bumble said:

Surely the financials will be worst affected if there is another financial crash. If you are just expecting a recession then OK, but then house-builders shouldn't be too badly affected. Having said that, I'm out of house-builders at the moment. Commercial REITS like BLND would also fall in a recession. I like GSK because pharma and healthcare is defensive. I also like RIO, though obviously a recession would reduce demand for industrial metals.

The financials are already very beaten down. Bank stocks have been hammered over the last few years. A lot of bad news is already in the price.

[Bumble]

Well just be glad you weren't invested in Eddie Stobart...

[Bumble]

I'm wishing I'd taken my own advice and bought the house-builders. The market seems to think that Boris' win is good for them:

[vand]

Yeah, UK stocks have had a very nice post-election pop. 

I don't like builders but good luck if they're your cup of tea.

Remember US stocks went on a tear after Trump was elected.. wouldn't it be nice if the FTSE now did the same?

[vand]

Interesting to see how it thie portfolio fared.

https://www.cityam.com/10-shares-generate-10000-income-2019/

Overall the portfolio would have been handsomely in profit, with some noticeable winners  in SSE, BDEV, and LGEN also delivering decent capital growth to go along with the dividend.

[DoubleEagle]

Don't you own some of those names? Nice income stream ...

[vand]

23 hours ago, DoubleEagle said:

Don't you own some of those names? Nice income stream ...

Yeah, I've got VOD, IMB and HSBA out of that lot.

I'm going to be filling out my ISA allowance for the next few years to get up to that sort of level. It'll be an awesome compounding machine. 

[Bumble]

Some others worth considering:   Marston's (MARS), Phoenix Group (PHNX), The Renewables Infrastructure Group (TRIG), City of London Investment Group (CLIG).

[vand]

Update on the vand high income portfolio: time weighted return of 32.3% since inception vs 10.4% against the FTSE350.

[vand]

The FTSE100's highest yielding stocks... and their dividend cover level

https://www.fool.co.uk/investing/2020/01/19/what-are-the-top-25-dividend-stocks-in-the-ftse-100/

 

 

[Bumble]

I think BT may be a value trap. I'm also cautious about BLND and LAND, because they are heavily exposed to commercial rents, and these will fall if there is a recession. I like many of the others in the Fool list though. It is quite surprising that the FTSE is so cheap. Why would you own bonds when you can get these kinds of yield from blue chip equities?

[vand]

Beeing waiting for a bit of a selloff in the markets to fill out my ISA allocation for this year, and it has finally come.

Bought RBS.L at @ 218p 

They only recommenced divi payments last year so not much recent history, but analysts reckon 6.5% yield is likely this year. My reasoning for buying is that, having only recently recommenced payments they are unlikely to set their stall out too aggressively and so the dividend should be generous and sustainable given the stock's modest valuation.

 

[vand]

Cineworld CINE.L have made two major acquisitions in the last 2 years to gain a sizeable position in North America. They have loaded their balance sheet with oodles of debt, and their shareprice has been under pressure because of it:

 

However this is an interesting play now. 6.2% dividend yield.

However, it's also the 2nd most shorted stock on the LSE with 13.8% of the stock currently out on loan:

https://shorttracker.co.uk/

All in all, as I said, an interesting one. Definitely a higher risk/reward play but if the company gets everything right with the acquisitions and leverages cost savings then it could prove to be a masterstroke. I'm keeping a eye on it.

 

[vand]

Coronavirus has hit the large miners.

RIO taken a bigger than 10% haircut in the last week. Juicy 7.3% dividend.

[vand]

Had some capacity in my SIPP to make an extra purchase so I've loaded up on RIO.L.

[vand]

These type of articles are quite typical, but a nice carrot regardless:

https://www.moneyobserver.com/our-analysis/10-shares-to-deliver-ps10000-annual-income-2020

[vand]

A good breakdown of FTSE100 dividend from IC:

https://www.investorschronicle.co.uk/comment/2019/10/24/can-investors-bank-on-ftse-100-dividends/

I take great heart from the historic record of payouts during the financial crisis. The FTSE100 is a pretty defensive play, but even defensive plays can produce very satisfactory returns.

[vand]

IMB.L took a bit of a haircut today, but I'm not at all tempted to sell. 

 

The Buffett Indicator says UK stocks.... should fare comparatively well in the next decade.

https://www.gurufocus.com/global-market-valuation.php?country=GBR

 

[vand]

The vand HYP is closed to new funds for the next few months as I have exhausted my ISA allowance for this year.

Current holdings and forecast yields

Holding     Exposure     Forecast Yield     Forecast Payout 
AV.L     £2,010     7.40%     £149 
BARC.L     £2,545     4.00%     £102 
BATS.L     £2,409     5.90%     £142 
BLND.L     £2,379     5.50%     £131 
BT.A.L     £1,830     9.80%     £179 
HSBA.L     £1,913     6.70%     £128 
IMB.L     £4,139     11.30%     £468 
RBS.L     £2,151     6.30%     £136 
RDSB.L     £1,823     7.40%     £135 
RIO.L     £2,103     6.00%     £126 
VOD.L     £2,332     5.00%     £117 

            
     £25,634     7.07%     £1,812 
 

I would not be surprised to see dividend cuts for BT and IMB.. the market seems confident that those companies in particular will eventually trim their payouts, while the are still happy to maintain payouts I'm happy to collect.

Very happy I have managed to build this portfolio in the space of the last 8 months since I started the thread, and looking forward to aggressively growing it further when the new tax year rolls around and again maxing out the ISA limit. As previously stated, the aim to build this over the next few years into a fierce compounding machine. Within 4 years I expect it to have exceed £100k and be generating a £6-7k pa income stream which will simply be reinvested every year. Then another 4-5 years after that my expectation is for it to be exceed £250k and be throwing off enough income to live on should I wish to do so.

 

One of the great things that I love with approach (as opposed to index funds) is actually watching the cash hit your account every few days. There are 30 payout dates on my dividend calender.. that's basically a full month where every day some cash is arriving into my account! This week I had 3 interim dividend payouts arrive, and the cash is just sitting there waiting to be reinvested at my leisure.

[Bullionaire]

BT just can't stop falling! Im wondering about buying some more but im trying to stick mainly to index/active funds at the minute. I do enjoy using the income variety of index funds though to see the dividends coming into my account (even though they just get reinvested straight away)

[vand]

Peter Lynch said that the goal of the stock picker is to hit 6 out of 10 selections. If you can do that you can become a successful investor. If you can increase your batting average to 7 out of 10 then you are a superb investor, while 8 out of 10 puts in in the greatest stockpickers, and basically nobody ever manages to bat at 9.0 or higher.

[Notafront4adragon]

1 hour ago, vand said:

Peter Lynch said that the goal of the stock picker is to hit 6 out of 10 selections. If you can do that you can become a successful investor. If you can increase your batting average to 7 out of 10 then you are a superb investor, while 8 out of 10 puts in in the greatest stockpickers, and basically nobody ever manages to bat at 9.0 or higher.

You only need to hit 3 out 10 in baseball to superb. I guess baseball is easier?