Our Top Dividend Pick

Michael Wayne

So far 2018 has begun just as 2017 finished, with the established ‘more mature’ businesses, as categorised by the ASX top 20, underperforming their smaller cousins. Typically, these larger more mature businesses are synonymous with stable dividends and income, naturally luring those investors whose stage in the investment lifecycle preferences... Show More

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Hi Adisen, Thanks for your comments. I would tend to agree with you. Dividends aren't of the greatest concern if that company is reinvesting earnings that then go onto earn a companies high ROE. However certain investors have different objectives. For instance retirees may require dividends for income. For those investors we feel they should focus on dividend streams that are growing overtime rather then the headline dividend yield.

On One company that passed our nine-point checklist -

Hi Parth, you are right that generally you don't want a high debt to equity ratio. In the article we discuss 'net gearing'. Net gearing is a similar and arguably a superior measure to the debt to equity ratio, as net gearing takes into consideration the cash on a company’s balance sheet. The calculation for net gearing is Debt - Cash / Equity. As you can see very it's similar to the debt to equity ratio.

On One company that passed our nine-point checklist -

Hi Shane, no doubt at this stage SHM hasn't turned out to be some of our best work. The filtering system isn't foolproof and we certainly will never get everything right. In fact we'll get a lot wrong. As mentioned in the article it can just help narrow the focus. Strictly speaking SHM didn't pass the filters as it didn't deliver 2 years consecutive Revenue growth. It met all other filters however. We were more drawn to SHM for its dividend yield characteristics and low valuation multiple, as well as what we feel are underappreciated growth prospects with the BBQ business.

On One company that passed our nine-point checklist -

Hi Phillip, you make some valid points. Based on long term track records it's hard to argue against WAM and WAX. When looking at LICs it is important to examine the composition of the underlying portfolios to determine whether the particular LIC satisfies what it is the investor is looking to achieve. WLE has over 40% of its FUM invested in ASX 20 businesses many of which retail investors would already own directly. Investing in the likes of WAM, WAX and CIE can allow investors to avoid duplicating existing positions and gain exposure to other parts of the market.

On Our Top Dividend Pick -

Hi Peter, thanks for your interest in the article. As pointed out by Ian the $0.016 represents a quarterly dividend payment. In recent years CIE has moved from paying half yearly to quarterly dividends.

On Our Top Dividend Pick -