As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Saturday, 15 March 2014

Paying for a premium dividend yield???


Just For Thinking ....



There is no free lunch in investing. It is about risk adjusted rewards.

Paying for a premium dividend yield???

Paying premium for future but uncertain earning growth e.g. dividend-growth stocks.

A case study since Uncle8888 has previously thought of Sabana as passive income too.

Sabana vs Kep Corp


 




Paying 2.8% premium for a blue chip yield that has earning visibility up to 2019.

Worth it or not?












2 comments:

  1. Hi CW,

    I think the expected 9 cents dividend is a bit optimistic.

    Sabana has 3 more master lease up for renewal this year. I use only 8 cents, as I believe they are not able to negotiate a higher rent despite higher cost due to master- leases becoming multi- tenanted. Of course only a few more quarters would be more enlightening after we study in on hindsight.

    Nonetheless, I believe the underlying business of renting industrial spaces and assets are ok, and there is a limit of stupidity from the management. If they do not do any more stupid stunts, I think current low price does give some compensation in terms of risk-reward profile.

    (Vested)

    ReplyDelete
  2. And don't forget which company is most likely to ask for money to replenish their capital. Aka rights issue.

    ReplyDelete

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