Future of tesco, morrisons

planteria

i agree that there aren't many other retailers that would want to use Ocado for grocery deliveries...but i think Ocado will succeed/fail based upon their success/failure of their own business at ocado.com

Morrison and Tesco are now the 2nd and 4th highest yielders in the FTSE100, 7.79% and 5.99% respectively.

Minrich

Looking at the yields of the top 100 , they are all alot higher than they were this time last year , why is that ? The share price of all of them cannot be cheaper than last year can it ?

bowlhead99

Minrich wrote: »

Looking at the yields of the top 100 , they are all alot higher than they were this time last year , why is that ? The share price of all of them cannot be cheaper than last year can it ?

I wouldn't say "all" are higher.

Some are definitely higher, like the two mentioned and others such as GSK, where their share price has fallen significantly due to current weak profits and perceptions about the future, while they have not yet got around to cutting the dividend. The market perceives they will even though the last dividend might have been quite a nice proportion of the current price.

Meanwhile if you look generally at the 100, FTSE index capital value is about 6600 like it was this time last year, while the latest declared dividends are probably higher than they were last year due to general growth of profits and dividends over time. So that changes the yield ratio although I must confess to having not done the maths to see what the current yield or consensus forward yield actually is at the moment for the 100 as a whole.

Minrich

You would struggle to get 4% yield , only with the top ten companies or thereabouts , now look at it . So if its overall value is still 6600 how come so much of a change ? I have been looking every day since i retired July last year .

Scarpacci

Minrich wrote: »

You would struggle to get 4% yield , only with the top ten companies or thereabouts , now look at it . So if its overall value is still 6600 how come so much of a change ? I have been looking every day since i retired July last year .

I think short-term concerns have pushed down the prices of quite a few of the FTSE100's top components, which are also quite often its best dividend players. The short term nature of the concerns mean the companies are still maintaining and/or increasing their dividends, so the yield is pushed up while the index level is perhaps made up for with better performance across other shares. Dividends broadly look to be rising or maintained across the board, so it's not surprising to see the yield push up even as the index stays still.

Off the top of my head, the miners' share prices are on the up recently on the back of steadying demand in China. Though they pay respectable dividends, they're by no means the top payers. So the miners might be up, while Glaxo, Vodafone and HSBC are down year-to-year. Diageo, by no means a dividend giant, is down too. On the other hand, BP and particularly Royal Dutch Shell (the index's largest weighting) are up on this point last year, while tobacco looks stable.

The FTSE 100 is very concentrated so the performance of those large players has a much greater effect than what happens in the rest of the index. I think the recent down swing means a higher yield from GSK, VOD and HSBC, while shares like BP, RDSB and BATS are keeping the index level stable and also contributing rising dividends. The supermarkets yields of course are a result of pessimism towards the sector, but individually they don't have much effect on the index. So some of those high yielders like Morrisons have very little effect on the index as a whole. Of course every stock tells its own story, so it's hard to generalise on all the high yielders.

bowlhead99

planteria wrote: »

Morrison and Tesco are now the 2nd and 4th highest yielders in the FTSE100, 7.79% and 5.99% respectively.

We'll have to see whether Tesco boost the final dividend to 'catch up' the effect of cutting 75% off their interim dividend as announced today:

The Board is focused on maintaining a strong financial position in order to maximise its business and strategic optionality. Reflecting this and our current expectations for future performance, the Board anticipates that it will set the interim dividend at 1.16p per share - a reduction of 75% from last year's interim dividend.

2010

2010 wrote: »

I don`t think tesco`s share price will improve until they show signs of sales increase, which is not happening thanks to Aldi and Lidl.
They`ve now woken up to the fact that it`s all about prices and convenience.

From an investment point of view there`s a good chance Tesco will cut the dividend, which won`t help the share price either.
I think the share price has further to fall.

My post above from 6th Aug 14.

Tesco cuts divi and profits forecast.

http://www.bbc.co.uk/news/business-28978540

200p here we come.

planteria

yes, Tesco 8% down this morning...
so presumably the other grocers will head down too..

Glen_Clark

Well at least they are doing the right thing by cutting the dividend.
Unlike RSA who turned a blind eye to falling profitability and kept paying an unsustainable dividend until they were forced into a rights issue - at huge extra cost.

Glen_Clark

planteria wrote: »

yes, Tesco 8% down this morning...

Must admit I am surprised by the amount of the price fall as I thought this was expected. Perhaps the price will recover a bit.