With cash, bonds and term deposits all offering a yield well below 3%, investors continue to turn to the share market to find income. Peter Quinton has a number of criteria that he looks for to add to the panel of high-yield stocks. In no particular order they are: 1) a market capitalisation above $1b; 2) a forecast dividend yield of at least 4.5% (fully or mostly franked); 3) earnings per share and/or dividends per share growth in 2016 and 2017; 4) a dividend cover of at least 1.2 times, or for infrastructure stocks, a distribution coverage of at least 100%; 5) a strong balance sheet; and 6) a neutral or buy rating from the analyst. These demanding criteria have been used successfully for probably over 30 years. In this video, he explains why 3 out of 4 of the big banks don't make the list and provides the 7 stocks that meet the criteria.
Very useful presentation, thanks for sharing.
I love the logic and transparency of this approach. Great stuff and looking forward to regular updates. Andrew Button
Excellent!!! Clarity and detail appreciated. rr
Much appreciated. Thank you.
Great up date, thanks Peter
Terrific stuff. This is exactly the type of info and data you can make sense from. Clear structured criteria, concise and logical. Thank you, much appreciated.
i dont understand GPT, MGR &APA all have zero franking. AST yield is <3%
GPT, MGR and APA are property trusts and infrastructure vehicles—franking is replaced with tax deferral, albeit APA has virtually no tax deferral in 2016 as mentioned on the first page of our report. AST has said a number of times that the 2016 distribution will be 8.53cents so the yield in our report is correct at 5.9%.
tax deferral is no substitute for high levels of franking, especially in Superfunds and moreso if they are in pension mode. Franking substantially increases the value of dividends .It is superfunds who are most interested in the attributes spelt out by the filters. eg security of dividend cover/lower risk, high yield, franking, etc. A huge proportion of investments is done by SMSFs and industry Superfunds. Tax deferral reduces the cost base so increases the CGT on disposal albeit at the 50% reduced rate (until the budget???). tax deferral is NOT guaranteed eg APA and is really dependant on continuous capital expenditure . it does not usually shelter the whole distribution so much of it is taxed at marginal rate.