High Yield Defensive Stocks

Thrugelmir

DiggerUK said:

EdGasketTheSecond said:

DiggerUK said:

So, a defensive portfolio  is as mystical as a unicorn. No need for complicated portfolios then, just buy defensive.....erh defensive what exactly? 

Enjoy the Unicorn Gymkhana..._ 

Linton already explained above what a defensive portfolio is; no myth about it........

Nobody has explained what the current 'defensive du jour' is. Every dogs breakfast does indeed have it's day.

Nobody can agree what is the appropriate 'jeu défensif' at this moment. 

Nobody can say what they are defending against. 

Nobody has said anything other than present a fine example of 'distinction sans différence'

Nobody has attempted to explain why it would be appropriate to put up defences at this time. Is it different this time.

What's being trotted out is a mantra of gobbledygook without any comprehendible explanation..._

Have you ever read the "Intelligent Investor" ? 

Prism

DiggerUK said:

EdGasketTheSecond said:

DiggerUK said:

So, a defensive portfolio  is as mystical as a unicorn. No need for complicated portfolios then, just buy defensive.....erh defensive what exactly? 

Enjoy the Unicorn Gymkhana..._ 

Linton already explained above what a defensive portfolio is; no myth about it........

Nobody has explained what the current 'defensive du jour' is. Every dogs breakfast does indeed have it's day.

Nobody can agree what is the appropriate 'jeu défensif' at this moment. 

Nobody can say what they are defending against. 

Nobody has said anything other than present a fine example of 'distinction sans différence'

Nobody has attempted to explain why it would be appropriate to put up defences at this time. Is it different this time.

What's being trotted out is a mantra of gobbledygook without any comprehendible explanation..._

I think its fair to say that most equities drop when there is an economic downturn. Some will struggle more than other, some will fail. The defensive companies are those that continue to grow regardless or at least don't struggle much. They are typically in certain industries like utilities and healthcare. Global companies that continue to sell cheap consumables tend to be less affected as does government funded  infrastructure like hospitals or schools. These types of companies don't usually cut their dividends or see their share price drop as much as the rest. 

If you can find them these companies tend to grow when things are good and grow when things are bad. For example Fundsmith is a big play on these kinds of companies and contains Unilever, Intertek, Johnson & Johnson and Pepsi, amongst others. If you look at long term graphs of the share price of these companies it you don't tend to see any sharp drops when the various world wide crashes occurred.

Another_Saver

The ultimate high yield defensive stock is probably tobacco.
Utilities - particularly NG and UU I do like, but beware examples like Centrica and BT. Personally I don't believe NG and UU will fall into those same traps, but it's possible. In the 250 you could try your luck with either of the two solar funds, there's also two wind funds, and plenty of Infrastructure funds to choose from which are perhaps fairly defensive with decent yields.
Insurers - general/non-life tends to be more reliable than life, if you pick the right one (looking at you Aviva you useless conglomerate). In the 250 index Direct Line, arguably a special unique star in the industry, has a 7.5% yield, reset after being told off for extorting loyal customers. IMHO MONY has become a defensive pick now, as we're in a new recession and they're an established brand with a healthy 4.5% yield, but very marketing intensive.
Dividend growth matters too - non-tobacco consumer staples may have more chance to up volumes and prices, and more room to make efficiencies than tobacco.

EdGasketTheSecond

How is tobacco defensive? IMB has lost over 60% of its value in the past 5 years; not my idea of defensive:

https://www.hl.co.uk/shares/shares-search-results/i/imperial-brands-group-ordinary-10p

Tobacco is in an ever increasing tax regime with diminishing sales.

Another_Saver

EdGasketTheSecond said:

How is tobacco defensive? IMB has lost over 60% of its value in the past 5 years; not my idea of defensive:

https://www.hl.co.uk/shares/shares-search-results/i/imperial-brands-group-ordinary-10p

Tobacco is in an ever increasing tax regime with diminishing sales.

*Defensive right now given current valuations (imperial on a 10% yield, bats on 8% based off the latest AJ Bell dividend dashboard) which I would argue the dip of the past 5 years has contributed to.
What you're buying is a very high, imho very safe, very probably inflation-linked dividend yield.
Tobacco is defensive anyway because it has been around for centuries and all the big 5 are rapidly diversifying into "lower risk" products.
Tobacco has been the highest or second highest performing sector in the US and UK since 1900 (credit Suisse global Returns yearbook 2019 summary edition).
The past 5 years is not a sufficiently long time period to assert that tobacco is no longer defensive.
Even including the past 5 years, both BATS and imperial have vastly outperformed the 100 index (trustnet only goes back to October 1996 if I put both imp and bats on).
The UK is ranked #1 for interfering in the tobacco industry and resisting the tobacco lobby, so again the past 5 years underperformance and very cheap valuations may also be partly explained by this. The market has priced in that these companies are domiciled in the least tobacco friendly market in the world, in spite of our current Home Secretary's previous career. The management are well aware of this too and I would expect are planning accordingly

DiggerUK

No, I have never read the  "Intelligent Investor".  As it has a passing association with Buffet I'm sure I will have looked into it in times past.

But having read as many reviews in its favour today as I needed to get a consensus, I've come to the conclusion that defensive picks have nothing to do with bomb proofing ones savings against a financial meltdown, but is just another set of wannabe gurus promoting low risk, passive portfolios and passing off stewing steak as 'prime stewing steak'

It's just part of the general gobbledygook I speak out against. Investopedia also gets in on the act, just a little more honestly.

Now, if anybody wants to talk gold as a defensive play, I suggest you ask MSE's resident, self appointed, unelected expert on gold..._

Another_Saver

DiggerUK said: 

No, I have never read the  "Intelligent Investor".  As it has a passing association with Buffet I'm sure I will have looked into it in times past.

But having read as many reviews in its favour today as I needed to get a consensus, I've come to the conclusion that defensive picks have nothing to do with bomb proofing ones savings against a financial meltdown, but is just another set of wannabe gurus promoting low risk, passive portfolios and passing off stewing steak as 'prime stewing steak'

It's just part of the general gobbledygook I speak out against. Investopedia also gets in on the act, just a little more honestly.

Now, if anybody wants to talk gold as a defensive play, I suggest you ask MSE's resident, self appointed, unelected expert on gold..._

https://youtu.be/EznxQAqMmMw

DiggerUK

So, what would you feed it, stewing steak, or prime stewing steak..._

Thrugelmir

DiggerUK said:

So, what would you feed it, stewing steak, or prime stewing steak..._

Golden nuggets. 

MonroeM

Sue58 said:

Deleted_User said:

Sue58 said:

I’m looking at SSE and other utilities such as NG and UU. However, does anybody know if there is a generic Utilities fund/IT or ETF that I could consider?

EXH9?

How do you compare past performance of EXH9 against the Ecofin Global Utilities and Infrastructure Investment Trust? Are they both relatively new funds?

You go to Trustnet, then tools and then charting to compare both of these options. I would do it for you because I’m also interested to know but my phone is nearly out of charge. Sorry.