Investment Trust Dividends
HENDERSON FAR EAST INCOME LIMITED
1st Interim dividend for the year ending 31 August 2024
The directors have declared the first interim dividend of 6.10p per ordinary share in respect of the year ending 31 August 2024. The dividend will be paid on 23 February 2024 to shareholders on the register on 26 January 2024 (the record date). The shares will be quoted ex-dividend on 25 January 2024.
Thursday 18 January
Custodian Property Income REIT PLC ex-dividend payment date
Invesco Bond Income Plus Ltd ex-dividend payment date
Invesco Select Trust PLC ex-dividend payment date
JPMorgan China Growth & Income PLC ex-dividend payment date
JPMorgan Japan Small Cap Growth & Income PLC ex-dividend payment date
Pollen Street PLC ex-dividend payment date
Premier Miton Group PLC ex-dividend payment date
Once the price stops rising it’s often time to take some cash off the table.
If it then continues to rise u can either buyback or just take some
more cash off the table.
Around the Covid low 3i was yielding nearly 5%.
Belt and Braces.
The Motley Fool
Warren Buffett has turned Berkshire Hathaway into a formidable business empire. And dividend stocks, such as Coca-Cola and American Express have been a big part of this.
When it comes to stocks, a central part of Buffett’s approach involves exploiting opportunities that can be found in times of extreme stress. American Express is a great example.
Back in the 1960s, the company was facing significant losses due to loans made during a major fraud by the Allied Crude Vegetable Oil company. It became known as the salad oil scandal. Buffett took advantage of the downturn in American Express stock to buy 5% of the company.
The results have been spectacular – Berkshire’s stake now returns over $302m per year in dividends. And this continues to grow as the firm reduces its outstanding share count.
The stock market can often overreact to short-term news – both positively and negatively. And seizing opportunities when share prices are irrationally low is a core part of Buffett’s approach.
His strategy isn’t just about buying cheap shares though. There have been plenty of chances to buy stocks at discount prices that the Berkshire CEO hasn’t looked to take advantage of.
That means companies that generate impressive returns on the capital they use in their operations. It also means businesses with a ‘moat’ that protects them from competitors.
Buffett’s investment in Apple is a great example. The company’s services division generates huge cash flows and switching costs for customers help the firm defend its market position.
In terms of Berkshire Hathaway, Buffett’s aim is to grow the value of the business. But I think the same principles are applicable to investing in dividend stocks for passive income.
When share prices fall, dividend yields rise. And that can create some attractive opportunities to lock in high yields by buying shares when others are concerned about short-term headwinds.
Equally though, a high dividend yield is no good if the company won’t be able to maintain its payouts. That’s why focusing on quality companies is key to recurring passive income.
By sticking closely to these ideas, I’m hoping to make investments today that can help me earn passive income for years to come.
ROOF
That’s how Chair Juliet Davenport described full year: “This has been a transformational year for the Company. We have assembled a highly diversified solar portfolio, offering one of the most secure income profiles in the UK listed renewables sector. We are now the partner of choice for some of the largest blue-chip corporations in the UK to help them deliver on their net zero targets. This has been a driving force behind our significant pipeline. We are delighted that our origination and installation strategy has continued to bear fruit, delivering significant valuation upside for shareholders.” As for the numbers: “…we have committed more than £149 million into clean energy solar assets generating an additional 120MW of solar PV capacity and increasing our GAV today to £215 million…Overall NAV per share declined 0.8 pence, driven by a 7.7 pence per share decrease as result of increasing the valuation discount rate to 7.4% from 6.6% (March 2023: 6.2%) as well as dividends paid of 5.0 pence per share…”
In terms of outlook: “…the renewables sector continues to benefit from strong tailwinds, namely energy security and net zero targets both at the corporate and government levels. The Company is experiencing very strong demand and has a strong potential pipeline of value-accretive opportunities totalling £410m. The Company now has a best-in-class reputation for delivering flexible solar solutions, evidenced both by the increasing number of new customer enquiries and feedback from its existing customers…It is our ambition to grow the Company…and in the short term the Company has access to a £20 million accordion which will be used to fund near-term commitments and pipeline. The Investment Adviser is monitoring opportunities to recycle capital from operational assets into installation assets which provide greater opportunities for capital growth. The Company is also working with its advisers to identify potential strategic investors who could provide capital to the Company through a variety of different structures.”
Winterflood notes: “NAV per share -0.9% to 92.0p. Key drivers were: (i) £15m gain from installation assets signing PPAs or reaching energisation (operational assets increased over the year from 62MW to 147MW) (+10.0p); (ii) adjustments for new contract pricing (+3.0p); (iii) net cash generated minus fund costs (+0.6p); more than offset by (iv) increase in unlevered discount rate from 6.6% to 7.4% (-7.7p); (v) reduction in inflation forecasts (-0.9p); (vi) lower power price forecasts (-0.9p); and (vii) dividend paid (-5.0p)…Electricity generation was 36.3GWh over the year, +0.7% above budget…”
Liberum is a buyer: “ROOF made some good portfolio strides in the FY and post-period, growing to become the UK’s largest commercial and industrial solar platform. The long-duration contracted cash flow model is an ongoing differentiator, with c.80% of revenues contracted over 10-years, which is c.25 percentage points ahead of peers and this effect leads to ROOF’s relatively low sensitivity to power prices (-4.6% NAV impact from a 10% decline in power prices). 92% of income is subject to annual inflation or fixed uplifts, with 47% benefitting from uncapped RPI or CPI uplifts. 79% of the portfolio is fully operational and 21% is in the installation phase, with full energisation expected by Q1 2024. In addition to increasing the distributions received base, this should provide a catalyst for NAV uplifts. We are BUYers with a 100p TP on ROOF’s shares.”
“Overall, we enter the new year with the mindset that we are continuing to travel towards the danger, rather than away from it, and we will not let a disappointing 2023 obscure what we see in front of us.” RICA monthly investment report for December 2023 during which NAV/share price rose 2.1%/4.2% respectively.
abrdn Diversified Income & Growth (ADIG)
Annual Report from abrdn Diversified Income & Growth (ADIG) . Chair Davina Walter had this to say: “…our Investment Manager has continued to pursue its strategy of seeking to provide income and capital appreciation over the long term from a genuinely diversified portfolio, providing access to a wide selection of asset classes, an attractive and dependable level of income and defensive characteristics relative to the volatility of equity markets. Despite the Board’s confidence in the investment strategy, the persistent and entrenched discount to Net Asset Value…led the Directors to commence a strategic review in June 2023 to consider how the Company could best restore and deliver value to shareholders.” And as the Chair explains: “In the light of the feedback received and the persistent discount to net asset value…at which the Company’s shares continued to trade, the Board concluded that it was in the best interests of shareholders as a whole to put forward proposals for a managed wind-down of the Company.”
As for how the fund performed over the year, the investment managers reported: “…a total NAV return of 0.4% with 3.6% volatility, a good risk adjusted return per unit of risk taken. This compared with a 13.2% return in equities as measured by the FTSE All-Share Index with 11.6% volatility, and -0.6% in government bonds as measured by the ICE BofA UK Gilt Index with a volatility of 11.5.” Back to the Chair for the outlook: “Global markets continue to be volatile, and, whilst there are some positive signs of recovery as inflation abates, the medium-term outlook for UK equity markets remains subdued, especially in terms of the investment trust sector. This is likely to continue to weigh on ADIG’s valuation relative to NAV, hence the proposals we are putting forward for an orderly Managed Wind Down which seeks to optimise shareholder value.”
Comment from Winterflood: “Under the managed wind-down announced in December 2023 (subject to shareholder approval at 27 February AGM), the Board expects that £115m will be returned to shareholders in H1 2024 at, or close to, NAV. Further returns of cash will follow as value is realised from the private markets portfolio (58.4% of 30 September NAV). c.£107.3m (valuation as at 30 November 2023) of private holdings expected to mature by 2027. Remaining £81.5m expected to mature between 2029 and 3033, and opportunistic secondary sales would be considered. The fund will cease to make new investments but will fund existing commitments. Outstanding debt (£16.1m of secured bonds with 6.25% coupon maturing in 2031) will be repaid in 2024.”
“The challenge for central bankers from here is to thread the needle of holding rates high enough to keep inflationary pressures at bay and bring inflation back to target while at the same time, not tipping economies into recession. The US appears to be treading this path well, while data in the UK and Europe is suggestive of a more imminent downturn.” abrdn Diversified Income & Growth (ADIG) Investment Manager’s Report.
Tip Watch #2: Keep faith in my 2023 investment trust tips – they WILL come good
So says This is Money’s Jeff Prestridge. The commentator opens his above-titled article by highlighting how in 2023 “…equity investing…proved very much hit and miss…” Why? Because of “…a mish mash of factors – from uncertainty over the global economy to continued geopolitical tensions and a toxic mix of persistent inflation and high interest rates.” What’s more “The performance of investment trusts reflects this uncertain backdrop…of the 380 stock market-listed funds covered by the industry’s trade body, the Association of Investment Companies, only 210 (55 per cent) have generated positive returns during 2023 – returns including both dividends and capital gains, but excluding investor costs. Factor those in and the number of positive returners reduces further…Of course, when five-year performance numbers are looked at, the picture changes. Far more funds (three quarters of them) have delivered positive returns.”
As for Prestridge’s 2023 tips: “This time last year, I assembled an investment trust portfolio that I thought could deliver spectacular returns. Not necessarily straightaway, but certainly over three to five years. The portfolio comprised ten trusts…investing in different parts of the world, some for growth, others for a mix of capital and income return…What linked these ten trusts a year ago was the fact that their share prices did not reflect the value of their underlying assets. They were sitting at big double-digit price discounts…My thesis was that these bargain prices would not last forever –resulting at some stage in a performance boost. I thought that maybe the discount propellant might kick in this year.” The ten trusts are listed below:
abrdn New India; Augmentum Fintech; Herald; Seraphim Space; Aberforth Smaller Cos.; Brunner; Invesco Asia; Schroder UK Mid Cap; Templeton Emerging Markets; and VinaCapital Vietnam Opportunity
The article continues: “So what’s happened to these trusts over the year? Have they delivered the stellar returns I thought they were capable of? The answer is no. I know this because I invested £100 in each of these ten trusts at the start of the year via my stocks and shares Isa. Looking at my Isa yesterday, the collective value of these holdings was £845.32. Add in the dividend income I have received of £15.09, and my £1,000 investment is now worth £860.41. In percentage terms, that is a significant fall of 14 per cent.” Despite the disappointing performance, Prestridge is sticking to his guns: “…I still believe that this portfolio will prove itself in time. Tellingly…nine of these trusts still have share prices at a big discount to the value of their underlying assets. These discounts will disappear if market sentiment improves. Maybe that will happen next year, maybe not. But I will hold these ten trusts until they sparkle.”
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