The current cash, after the capital return from ADIG of £3,7333 is £5,855.17. The return has not been included in the Snowball as it’s not a repeatable payment.
The funds are going to be re-invested in the RGL share subscription
59,100 shares at 10p
Now, u don’t need to use a calculator to realise that is short of the entitlement amount but the dividend tomorrow of £331 from RGL will take the Snowball over the line.
The closing date for subscription is the 14th of July.
The Snowball will be overweight with RGL but the intention is still to pay a reduced dividend, so the position will be sold into, overtime.
The subscription shares are trading around 13p but this price may fall after the share consolidation as the newly issued shares find a new home. One option is to sell some shares in the market and replace them with the subscription shares, when issued.
Here’s how I’d turn FTSE 100 dividend shares into a second income for life Provided by The Motley Fool
by Harshil Pate
There’s a lot to like about dividend shares. For one, they can make an excellent source of passive income.
Once the shares are bought, there’s very little left to do except wait. Long-term investments require a long-term mindset, after all.
Doing so can have a snowball effect after several years, due to the compounding effect.
Finding the best dividend shares
I’d begin by searching for quality shares that offer both growth and income. After all, dividends need to be paid from earnings. So growing earnings can lead to growing dividends.
I’d also look for a long track record of consistently paying dividends. This shows a company’s long-standing approach to distributing cash to shareholders.
Of course, there’s no guarantee that earnings will grow and no certainty that dividends will continue to be paid. But a substantial dividend history can reduce this risk.
Risk can also be lowered by owning a selection of shares, across a variety of sectors. Doing so avoids putting all my eggs in one basket.
Digging for growth
One large-cap share that meets this criteria is Footsie mining giant Rio Tinto (LSE:RIO). It has consistently paid dividends for over a decade.
Bear in mind that it’s a cyclical business though, and demand for its iron ore can fluctuate. But as a low-cost producer, I reckon Rio could withstand such swings in demand.
Also, more than half of its sales are from China. When China expands construction projects, it can have a material effect on Rio’s earnings. But of course, the opposite is also true.
Future growth is likely to come from metals needed for the energy transition and ongoing urbanisation. Rio expects demand to grow by 3.9% per year for the next nine years.
It’s all about the dividend
For shares like Rio Tinto, dividends can have a weighted effect on total returns. For instance, over the past decade, its share price has risen by around 5% a year. If that sounds mediocre, I’d probably agree.
But by factoring in dividends, its total return amounted to a healthier 10% a year. That significantly beats the FTSE 100 average of 6%.
Right now, Rio has a dividend yield of 6.5%. It also ticks some boxes when it comes to business quality. For instance, it offers a return on capital employed of 16% and an operating profit margin of 27%, both meeting my double-digit requirement.
Just like Rio Tinto, I can find several other FTSE dividend shares that tick my boxes. IG Group and BP come to mind. If I had available cash, I’d buy all three to target a solid second income for life.
££££££££££££
remember to leave some of your retained capital to those wee cats and dogs.
Menhaden Resource Efficiency recommences its share buyback programme, Riverstone commits a further £20m to its buyback programme and Tritax Big Box gets a rating upgrade.
By Frank Buhagiar 09 Jul 2024
Menhaden Resource Efficiency hits the buyback trail again
Menhaden Resource Efficiency (MHN) put out a short and sweet press release announcing that it was recommencing its share buyback programme in light of the Company’s wide share price discount to its net asset value. The shares have been trading at around a 40% discount to net assets, not far off the 52-week high discount of 42%.
Riverstone Energy tacks on another £20m to buyback programme
Riverstone Energy (RSE) announced it is committing a further £20m to its buyback programme. That represents around 9% of the fund’s market cap. RSE no stranger to buying back its own shares. Since October 2023, the company has acquired 110,407 of its shares at a total cost of approximately £0.7 million ($0.9 million). But that’s nothing compared to the 15,047,619 ordinary shares acquired via the tender offer earlier this year at a cost of £158 million.
Tritax Big Box gets a rating upgrade
Tritax Big Box (BBOX) noted Moody’s Ratings has upgraded its credit rating outlook on the logistics REIT to Baa1 (positive) from Baa1 (stable) and reaffirmed its long-term corporate credit rating. BBOX puts the upgrade down to growing scale, increased portfolio diversification and ‘a continued focus on high-quality logistics assets, which are supported by the recent acquisition of UK Commercial Property REIT Limited (UKCM).’
Dividend Watch
Artemis Alpha’s (ATS) total payout for the year came in at 6.8p a share, a 9.7% increase on the previous year’s 6.2p a share. That comes after the 4.26p final dividend was announced alongside the latest full-year results. ATS has a policy to “deliver growth in dividends at a rate in excess of inflation”.
The Telegraph says investors should put Alliance Witan on their watch lists, while MoneyWeek believes the combination of HarbourVest’s very strong performance record and ‘inexplicably high discount’ is hard to beat
By Frank Buhagiar 09 Jul, 2024
Questor: Keep a keen eye on this investment trust about to hit the FTSE 100 The Telegraph’s Questor Column takes a closer look at the latest headline-grabbing deal in London’s investment company space, the proposed combination of long-established global trusts Alliance and Witan. As the article explains, the idea behind the deal is to create a one-stop shop, where investors can gain all their equity exposure via the new trust which will be known as Alliance Witan. Certainly, the two trusts appear a good fit with both adopting a multi-manager approach, whereby external fund managers are mandated to run the bulk of the two funds assets.
With both Alliance and Witan having market caps of over £1billion, the combined £5billion plus fund will likely be a shoe-in for inclusion in the FTSE 100. Promotion to London’s top-tier index not just a nice-to-have. The fund’s profile will be raised, making it easier and likely cheaper to trade in the shares. FTSE 100 inclusion will also put the fund on the radar of a deeper pool of investors. Those investors will also benefit from lower costs as management fees are to be reduced so that total ongoing charges will fall to under 0.6% a year, compared to Witan’s current 0.76% level and Alliance’s 0.62%.
As for performance, Alliance has the upper hand. Since April 2017 when Alliance adopted its multi-manager approach, the fund has grown assets by 102%, or 10.2% a year. That’s comfortably above Witan’s 60% return or 6.8% per annum. All of which leads Questor to conclude ‘investors should put Alliance Witan on their watch lists. A weakening in the share price before or after the transaction completes could provide a good buying opportunity’.
MoneyWeek: Should you invest in HarbourVest ?
The MoneyWeek article opens with a mystery. Private equity fund of funds HarbourVest Global Private Equity’s (HVPE) NAV is up +251% over 10 years and has doubled over five years. Yet the shares trade at a 40% discount to net assets. Why?
One possible answer is that those net assets are overvalued. Quite possible were stock markets selling off, the world hurtling towards recession and the portfolio’s holdings trading on steep valuations. But as MoneyWeek points out ‘markets have been rising steadily against a benign economic backdrop. The average valuation multiple for a representative sample of the portfolio at year-end was a reasonable 14 times cash flow, average cash flow having increased 15% in the year.’ And on valuations, MoneyWeek highlights that during the year ended 31 January 2024, around 10% of HVPE’s portfolio was sold at an average 24% premium to carrying value, suggesting a conservative valuation approach.
The article then runs through a check-list in an attempt to explain that hefty discount such as lack of buybacks, poor liquidity in the shares and high costs. No lack of buybacks though. Since September 2022, HVPE has bought back 2.9 million shares or nearly 4% of those in issue. And with the board allocating $150-$250 million to a buyback pool, more buying appears to be on the table. Nor should the liquidity of the shares be an issue as the private equity fund has a market value of £1.840 billion. As for costs, total expenses in the latest year came in at 1.8% of the average NAV, but as MoneyWeek points out ‘Managing private equity is expensive, with costs more comparable to a listed company than to a fund investing in listed shares, but the returns are significantly higher.’
So, unable to come up with a satisfactory explanation for that HVPE discount, MoneyWeek concludes ‘Within a very undervalued sector, the combination of HVPE’s very strong performance record and inexplicably high discount is hard to beat – especially with the board trying to narrow the discount and add to NAV by buying back shares’.
Times are tough but investing a tiny sum such as £3 a day towards building a second income for retirement is well worth the effort.
Everybody needs a bit of cash in an easy access account for emergencies. But for longer-term retirement savings, I believe my money will work a lot harder in stocks and shares.
Stocks beat shares over time
Over the last 20 years, the FTSE 100 has delivered an annual average return of 6.89% a year. That beats even the very best cash savings accounts. It also gives me a better chance of protecting the value of my money against inflation.
Over the long run, history shows that equities beat almost every other type of investment. Better still, by purchasing them inside the £20,000 annual Stocks & Shares ISA allowance, I can take all of my capital growth and dividend income free of tax.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
If I invested £3 a day from age 25 and it grew at 6.89% a year, I’d have an impressive £453,989 by age 65. That’s not a bad return from £3 a day. This assumes I increase my contribution by 5% each year, to keep pace with prices.
If I was 45, my £3 a day would have much less time to compound. It would be worth just £70,499 by 65. That is better than nothing but it shows the cost of putting off investing. If I had no savings at 45, I’d be looking to invest much more than £3 a day. If I put away £10 a day instead, I’d have £234,831 by age 65.
These figures are not guaranteed. Stock markets are volatile, and nobody knows how well they will perform in future.
I like high-yield shares
Either way, I would reinvest all my dividends back into my portfolio while I was working, then draw them as income after retirement
So how much of a second income can a portfolio of shares generate? Let’s say, to keep things simple, that I had £100,000. Placed in FTSE shares that yielded on average 7% a year, I’d have a second income of £7,000.
Next year, the FTSE 100 Index is forecast to yield 4.4%. That would generate income of £4,400 if I placed my £100k into a tracker fund.
Crucially, in both cases I’d still have my capital intact. Its value will rise and fall in line with the stock market. However, history shows that in the long run it should rise and, with luck, so should my second income.
I’ve bought for the blog portfolio 11038 shares in FSFL for 10k.
Declaration of Dividend
Foresight Solar is pleased to announce the first interim dividend, for the period 1 January 2024 to 31 March 2024, of 2.00 pence per ordinary share. The shares will go ex-dividend on 25 July 2024 and the payment will be made on 23 August 2024 to shareholders on the register as at the close of business on 26 July 2024.
The Board confirms its annual dividend target of 8.00 pence per ordinary share for the 2024 financial year.
This is a non-independent marketing communication commissioned by BlackRock. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.
Overview BRSA’s portfolio trades at a significant P/E discount to the US market and is defensively positioned…
Overview BlackRock Sustainable American Income (BRSA) is a value-focused portfolio of largely US-listed stocks, with an explicit ESG mandate. BRSA also makes full use of its ability to invest in non-US stocks when comparable valuations make for an attractive alternative, with for example Shell currently a top-ten holding in the holding in the trust, both on valuation grounds and on ESG grounds, which is explored in the ESG section.
The team’s focus on value sets the trust apart from many of its peer group and the wider US funds’ universe. Over the last five years BRSA has performed in line with its reference index, the Russell 1000 Value Index, but value investing has lagged the wider market and BRSA has lagged the Morningstar North American investment trust peer group, which is on average more growth-orientated than BRSA. This has led to a very wide gap in valuation between BRSA’s portfolio, on an average P/E of c. 12x and the S&P 500 Index on c. 19x. The very narrow range of stocks that drove the S&P 500 Index’s performance in 2023 has exacerbated this gap, and the team have identified a number of sectors on historically low valuations, notably healthcare.
BRSA currently yields 4.3%. Since 2018, BRSA has paid a dividend totalling 8.0p each year, and for the current financial year ending 31/10/2024 the board has guided investors to expect the same. Dividends are paid from a mixture of revenue and distributable reserves.
BRSA currently trades on a c. 12% discount. Having historically traded at a narrower-than-average discount for the peer group, it recently widened towards the peer group average and the board has increased the rate of share buy-backs in response. With the team currently taking a defensive stance within the portfolio, the trust is currently ungeared awaiting an opportune period to re-apply leverage to the portfolio.
Analyst’s View Many investors were caught on the wrong side of the ‘magnificent seven’ trade in 2023, which saw a very narrow group of large-cap technology-focused stocks in the US drive the overall market’s performance to an unusual extent. It’s writ large that BRSA’s value-based approach means that it was never likely to own these stocks, and as the team point out, the overall valuation on the US market is now at what they consider to be quite a stretched level, even as many stocks continue to trade at attractive valuations, with BRSA’s portfolio’s average P/E at 12x compared to the S&P 500 Index’s 19x. BRSA’s value approach did identify some winners last year, with Cognizant Technology Solutions and Cardinal Health. Cognizant, an IT services company, trades at a large discount to its closest peers. Cardinal Health, a healthcare services and products company that specialises in the distribution of pharmaceuticals and medical supplies, has seen some recent management changes that the team view as a positive to further drive value.
Investors wondering whether the US equity market cares about dividends could do worse than examine the positive share-price reaction of Meta upon its recent announcement that it would commence paying a dividend. Meta isn’t in BRSA’s portfolio on valuation grounds, but we think it is perhaps an interesting juncture for the US market. BRSA’s own portfolio has a yield of 2.5% and an historical dividend growth rate of c. 9%, higher than the S&P 500 Index’s yield of 1.7% and growth of c. 5%. Long-term, valuation and dividend growth can really matter for equity returns, and while the abovementioned Meta’s dividend yield is fractional in comparison to its market cap, perhaps this marks an interesting moment for US investors to re-appraise the value of a dividend policy? We think BRSA could perform well in such a scenario.
Bull Portfolio at a significant P/E discount to US equities Consistent record of dividend paying Shares currently trading on wider-than-average discount
Bear The value style has remained out of favour in 2023 Dividend has not grown since 2018 Some investors may prefer 100% North American exposure
