Back in 2006 when we first bought Microsoft, the market was concerned about the future of the company’s consumer division – even though it represented only five percent of total sales. We saw great long-term potential for Microsoft to transition its enterprise software business to a subscription-based model, which would... Show More
In the last few days Opposition Labor Leader Bill Shorten has proposed a radical transformation of dividend imputation. Putting aside his mistaken belief that his voters are “Aussie Battlers”- when in fact they are hard-working small business owners and contractors, many of whom receive franked dividends from their business endeavors... Show More
This will be short and likely controversial. There’s a lot of vitriol about dividend imputation these days. Much of it is misguided. However widely practised around the globe, double taxation of corporate earnings is unfair. Most countries acknowledge that fact indirectly by having low tax rates on dividends. Our dividend... Show More
On average, companies in the top 10 per cent of expected dividend yield deliver negative earnings growth, negative dividend growth and underperform the market over time, our analysis suggests. To find the companies with genuinely sustainable dividends, you need to dig much deeper than these simple historical measures. Show More
Want to know the biggest yield trap of 2017? Each year there are dividend plays that turn out to be yield traps. In 2012, it was QBE. During 2012 to 2014, we saw several consumer stocks turn out to be yield traps including Seven West Media, David Jones and Myer.... Show More
Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t, pays it.” We tend to agree – compounding returns over time can lead to some great results. So how does this play out in the world of small... Show More
The recently released Economic outlook from the Carlyle Group, titled “The search for yield and business investment”, focused on why corporate investment has been so weak in the past few years, despite record low interest rates. With income streams from “safe” investments (cash and government bonds) at record lows, it... Show More
Here are three things to focus on if you’re finding the rough and tumble of investing a little, well, rough. Show More
Leading into the earnings reporting season, a lot of analysts are questioning whether AUS companies will hold their dividend yields... Credit Suisse has come out with the report recently that the dividend yield (DY) strategy has not been working in the last couple of years. We believe this is usually... Show More
Mass contraction in global bond yields has led to yield convergence in the Australian share market where most stocks, whether they be industrials, financials or commodity producers, are now yielding between 4-6%. Probably the biggest surprise is that this convergence has attracted so little commentary, analysis and attention to date.... Show More
Spotless is a leading provider of integrated facility services in Australia and New Zealand. Spotless has dominant market industry positions, good revenue visibility driven by long term contracts of 5-10 years and very low customer concentration with no single client representing more than 5% of turnover. We are attracted to... Show More
Revisiting our Dividend views for the ASX200 With 50% of returns from the local share market coming from dividends over the last 20 years, it's not difficult to understand why Australian investors are correctly focused on dividends. The unprecedented low interest environment now clearly appears to have a few more years'... Show More
Australians are heavily reliant - dividends. Investors are clearly becoming concerned that weakening global economies will lead to the world's big banks being hit with a significant jump in problem loans. Banks have recently reached yields of about 6% fully franked compared to negative real returns on cash held on deposit.... Show More
Engineering and property services company UGL has been struggling with the mining downturn. The company isn't paying shareholders a dividend, but with the sale of its property division that is about to change. Shareholders can look forward to a capital return, and a reintroduction of dividends, from what should once... Show More