Dow

Generali

StevieJ wrote: »

Don't forget the dividends :beer: The point being even after a disastrous run it will not be far off outperforming cash.

Really? Any idea what average dividend yield on the FTSE 100 has been since 1996? Given the tech bubble (those companies weren't paying dividends and they ruined the dividend paying potential of insurance companies for a year or two) and the collapse in bank dividends more recently I would guesstimate it at about 2% or thereabouts. Long term average is 3.5% from memory.

Dividends are (or should be) an important part of returns from stock market investments I agree.

StevieJ

Generali wrote: »

Really? Any idea what average dividend yield on the FTSE 100 has been since 1996? Given the tech bubble (those companies weren't paying dividends and they ruined the dividend paying potential of insurance companies for a year or two) and the collapse in bank dividends more recently I would guesstimate it at about 2% or thereabouts. Long term average is 3.5% from memory.

Dividends are (or should be) an important part of returns from stock market investments I agree.

For a rough idea
Dividends to 2005
http://www.fool.co.uk/news/Comment/2005/c051220e.htm
Today 5.58%
1yr ago 3.88%
2yr ago 3.03%

So roughly 3 to 3.5% tax free to a basic rate taxpayer.

sabretoothtigger

5.58% today but no one seems to believe that will stick or they'd invest

2-Yr Benchmark Govt Yields - Germany vs Other Nations

Current

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Spread in Basis Points

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Yield Today Prev Day Week Ago Month Ago Year Ago

Germany 1.445 %
Australia 2.745 % 130.0 132.0 164.4 140.4 311.0
Austria 1.242 % -20.3 -9.6 1.9 -5.2 22.4
Belgium 1.225 % -22.0 -17.0 1.0 -3.9 28.7
Canada 0.996 % -44.9 -46.9 -26.4 -46.6 -58.6
Denmark 2.169 % 72.4 72.6 84.3 106.7 55.5
France 1.688 % 24.3 24.1 26.9 10.3 20.7
Italy 2.163 % 71.8 71.8 83.0 76.9 59.5
Japan 0.415 % -103.0 -103.5 -78.6 -100.0 -261.6
Netherlands 1.674 % 22.9 23.8 35.1 28.9 21.9
Portugal 2.360 % 91.5 103.7 112.3 40.5 43.0
Spain 1.997 % 55.2 49.3 77.7 79.7 25.9
Sweden
U.K. 1.368 % -7.7 -7.5 -6.0 22.4 76.9
U.S. 1.000 % -44.5 -42.9 -29.2 -42.5 -155.9

Generali

StevieJ wrote: »

For a rough idea
Dividends to 2005
http://www.fool.co.uk/news/Comment/2005/c051220e.htm
Today 5.58%
1yr ago 3.88%
2yr ago 3.03%

So roughly 3 to 3.5% tax free to a basic rate taxpayer.

Interesting, I'm surprised it's as high as that.

Anyone with access to a Bloomberg terminal who can give us an idea going further back?

sabretoothtigger

Generali

sabretoothtigger wrote: »

So in the US at least, dividend returns have been lower than the long-term average for the past ten or so years.

sabretoothtigger

Yea which I think supports the whole overvalued market adjustment we're seeing

I might have got the graphs from this site:
http://www.marketoracle.co.uk/Article8065.html

Stock Market Investment Screening for Top Yielding Dividend Stocks

StevieJ

sabretoothtigger wrote: »

5.58% today but no one seems to believe that will stick or they'd invest

I should imagine you could put together a fairly defensive high yield portfolio.

Generali

StevieJ wrote: »

I should imagine you could put together a fairly defensive high yield portfolio.

You can easily find stocks yielding 5-6% which are massively defensive.

I mean why the hell is the National Grid paying 6% dividend? From the FT website:

National Grid has a Debt to Total Capital ratio of 4.69%, little changed from the previous year's 0.01%.

So no debt problems then.

In 2008, cash reserves at National Grid fell by 1.42bn. However, the company earned 3.19bn from its operations for a Cash Flow Margin of 27.73%. In addition the company used 3.02bn on investing activities and also paid 1.59bn in financing cash flows.

Ok, so cash balances fell. Looks like it was to finance investment rather than going to the markets. Sensible in the current climate.

Year on year National Grid grew net income 129.27% from 1.39bn to 3.20bn primarily through revenue growth (8.78bn to 11.50bn). For while the costs associated with cost of goods, selling, general and administrative and debt all increased as a percentage of sales, the 30.99% growth in revenues contributed enough to still see net income improve.

Revenues and average costs moving in the right (opposite) directions.

I'm a bit out of touch, clearly. I guess it's just that foreigners don't want to be in the UK right now - this is a function of that trillion quid that has been withdrawn from the UK. The yield is good in sterling terms but if the pound drops by 10% this year, your dividend is wiped out in capital losses.

StevieJ

Dolly Day for the Dow :j