Wednesday, 12 June 2013 - 20:00
Dividend Aristocrats ? The New Nifty 50?
The original Nifty Fifty stocks from the 1960’s and 1970’s were the type of shares that were supposed to be buy and hold shares. They were characterised as having consistent earnings growth and high PE ratios. A Barron’s article put it as “They were so-called one-decision stocks you were supposed to buy and put away forever because these supposedly elite growth companies would continue to grow no matter what.”
Many of these companies have indeed continued to grow, despite protracted bear markets, especially in the bear markets of the mid 1970’s and the early 2000’s. Some of the names included well known Coca Cola, IBM, McDonalds, and Johnson and Johnson. But then there were others such as Burroughs, Digital Equipment, and Eastman Kodak, which have all long gone.
Standard and Poor’s, which produces the well know S&P500 index, also produce what is known as the Dividend Aristocrats index. This is a subset of the top 500 companies, which have increased their dividend pay-outs for at least 25 consecutive years.
The companies that make up the Dividend Aristocrats cover ten different business sectors with both growth and value holdings. The index of shares is then equally weighted across the various shares and each quarter re adjusted back to an equal weight.
The list declined from 52 companies in 2009 to 42 companies in 2010, as many companies cut their dividend pay-outs. The index then remained steady in 2011 and in 2012 one company was removed and 10 added.
The chart below reflects that over the last three and five years the Dividend Aristocrat index has outperformed the larger S&P500 index mostly because these shares did not decline as much as the broader market in the 2007/2008 financial crisis. Over the last 12 months however the returns from the two series have been neck on neck.
BCA Research have a view that given the scarcity and low quantum of yield available for investors, the dividend attributes of these types of shares could become even more in favour than is already the case, potentially pushing up valuations to inflated levels. These shares are attractive for investors because of their fixed income type qualities.
BCA do point out, however, that while there is a belief that defensive stocks typically weather market shakeouts or corrections, the reality is that they rarely do. I.e. there is investment risk when investors overpay. A lot, however, does hinge on the actions of central bankers with regard to keeping interest rates low and providing liquidity. Over the last few weeks we have seen interest rates rise, once again causing some headwinds for shares, but resulting in losses for bondholders.
Ian de Lange
021 914 4966
Wed, 12 Jun 2013
Further to the announcement released on SENS on 4 April 2013, shareholders are advised that the contractual disputes associated with the final contract close-out in Sierra Leone continue. Despite numerous attempts. . .
AMAP and Bidvest shareholders are referred to the announcement published on SENS on 12 April 2013 and in the press on 15 April 2013, regarding the approval at the AMAP shareholders'. . .
Shareholders are advised that Mr Don Hope will be resigning as a non-executive director of Nedbank and Nedbank-p with effect from 30 June 2013, following his retirement from Old Mutual plc. . .
Revenue went up 35% to R7.6 billion (R5.6 billion) and operating profit grew 47% to R883.8 million (R601.1 million). Profit attributable to owners increased to R693.2 million (R455.7 million). In addition, headline earnings per share were greater at 885 cents. . .
Revenue increased to R918.8 million (R474.4 million). Gross loss was recorded at R27.3 million (gross profit of R14.6 million). Operating loss was R139.4 million (profit of R4.9 million). In addition, net attributable loss was at R84.5 million (profit of R132 million).. . .
World Markets (Spot Prices)
|JSE Top 40||17:00||35401.32||144.92||0.41%|
|JSE Indust 25||17:00||45253.91||429.56||0.96%|
|Rand / Dollar||19:59||10.0218||-0.0462||-0.46%|
|Rand / Pound||19:55||15.6881||-0.0436||-0.28%|
|Rand / Euro||19:55||13.3640||-0.0495||-0.37%|
|Rand / NZD||04:59||7.9814||0.0495||0.62%|
|Rand / AUD||19:55||9.5312||0.0187||0.20%|
|Yen / Dollar||19:59||95.8500||-0.1780||-0.19%|
|Euro / Dollar||19:55||0.7502||-0.0007||-0.09%|
|Dollar / Euro||19:59||1.3325||0.0017||0.13%|
|Pound / Dollar||19:55||0.6377||-0.0013||-0.20%|
Click here for the Sharenet Spot Price page
The JSE Today
* Includes all listed instruments on the JSE
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||47,908.00||356.00||0.75%|
|Oil & Gas ||31,906.00||-532.00||-1.64%|
|Oil & Gas Producers ||17,155.00||-286.00||-1.64%|
|Basic Materials ||24,554.00||-22.00||-0.09%|
|Forestry & Paper ||20,808.00||-197.00||-0.94%|
|Industrial Metals ||23,938.00||-301.00||-1.25%|
|General Industrials ||117.00||.00||0.56%|
|Consumer Goods ||50,814.00||435.00||0.86%|
|Automobiles & Parts ||7,912.00||-1.00||-0.03%|
|Health Care ||62,039.00||406.00||0.66%|
|Index Name||RP||Move||% Move|
|Food Producers ||67,672.00||189.00||0.28%|
|Personal Goods ||888.00||7.00||0.90%|
|Consumer Services ||84,791.00||791.00||0.94%|
|General Retailers ||55,920.00||-909.00||-1.60%|
|Travel & Leisure ||5,398.00||-12.00||-0.23%|
|Support Services ||2,365.00||-22.00||-0.93%|
|Non-life Insurance ||44,025.00||1268.00||2.97%|
|Life Insurance ||28,075.00||-101.00||-0.36%|
|General Financial ||2,744.00||12.00||0.46%|
|SHARIAH TOP40 ||3,296.00||7||0.24%|
|FTSE/JSE SHARIAH ALL||3,422.00||7||0.21%|
|FTSE JSE Fledgling ||5,718.00||16||0.28%|
|FTSE/JSE Alt X ||991.00||1||0.16%|
|SA LISTED PROPERTY ||493.00||0.38%|
|CAPPED PROPERTY ||411.00||0.22%|
|FTSE/JSE RAFI 40||7,842.00||12||0.16%|
|Capped Top 40||18,668.00||82||0.44%|
|Capped All Share||20,131.00||77||0.38%|
|JSE TABACO ||7,018.00||40||0.57%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|ABL||AFRICAN BANK INVESTMENTS ...||BUY||11/06/2013|
|NED||NEDBANK GROUP LTD||BUY||10/06/2013|
|BVT||THE BIDVEST GROUP LIMITED||HOLD||10/06/2013|
|ANG||ANGLOGOLD ASHANTI LIMITED||HOLD||10/06/2013||
|Expected||Company Name||Fin. Date|
|13/06/2013||AFPREFINV||March 2013 (Final)|
|13/06/2013||AME||March 2013 (Final)|
|13/06/2013||CAFCA||March 2013 (Interim)|
|13/06/2013||SYCOM||March 2013 (Final)|
|14/06/2013||TELKOM||March 2013 (Final)|
|ABIL PREF||20/05/2013||07/06/2013||18/06/2013||R 3.2200|
|KDV||KayDav Group Ltd.||13/06/2013||Confirmed|
|MASP||Masonite (Africa) Ltd.||19/06/2013||Confirmed|
|MAS||Masonite (Africa) Ltd.||19/06/2013||Confirmed|
|MASB||Masonite (Africa) Ltd.||19/06/2013||Confirmed||
Stock Exchange News Service
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