ASX Shares Dividends

Discussion in 'Shares & Funds' started by Silverson, 29th Mar, 2020.

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  1. Silverson

    Silverson Well-Known Member

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    I know this varies vastly from company to company and index to index but... what impact should we expect to see here on dividends?
    Some of the LICs with large cash holdings may be able to smooth payments but may also use this time to aggressively accumulate hence also cut dividends.
    I know historically dividends have not been hit anywhere near as hard as price. I however think we could see dividends cut but 50% or more.
    Take VAS as example. It distributes the income it receives from the ~300 companies it holds to its unit holders. Many of these 300 companies may drastically cut or even completely cut dividends for the foreseeable future.
    What’s everyone’s thoughts on this?

    Also for those living off dividends and not ‘actively’ accumulating now would be when those few years living expenses/cash buffer (rainy day fund)would be worth its weight in gold, something that all Investor’s should have regardless the asset class (and renters).
     
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  2. Trainee

    Trainee Well-Known Member

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    The weightings matter. e.g. Flight centre cancelled its latest dividend. But FLT is only 0.1% of VAS. Even if 100 of the smaller holdings cut dividends, thats not a huge impact.

    The Big4 + BHP make up 28%. Cuts to these dividends would have far greater impact. Some dividends are in US dollars, so the lower AUD might mean more dividends.
     
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  3. Silverson

    Silverson Well-Known Member

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    Absolutely!
    I can see the big 4 cutting div by at least 30% and bhp may also snip a tad.
     
  4. datto

    datto Well-Known Member

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    Yeah I reckon divi's will be cut'

    Investors may have to go back to work.

    Coles and Woollies are taking on heaps of casuals filling shelves. Mind your back and make sure the correct product is in the correct place.

    Nothing worse than thinking you found the cheapest deodorant only to find out later at the check out it was in the wrong spot.

    Also, no munching out in the lollies section just because a packet of Snakes has somehow "opened up".
     
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    It will be interesting to see what happens. Dividends will not, hopefully, drop by the same amounts as the drop in value of the shares.
     
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  6. willair

    willair Well-Known Member Premium Member

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    Tomorrow morning the div for Cba will be in the accounts,even during the dark GFC times most never went below 25 percent of the norm but this doesn't reflect reality and the way we will experience the outcomes as a lot of businesses are finished ..imho..
     
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  7. SatayKing

    SatayKing Well-Known Member

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    I've put my general view in the LIC thread.

    Work on worse case scenario of how much do I need to keep roof over my head, pay bills and buy food. Have worked numbers on 12 month rolling basis with current funds but I can stretch that. Assumed 50% reduction in distributions from ETF.

    LICs will be impacted by A-REIT holdings depending on particular weightings as well as the change in the mix of their holdings and exposure to financial shares. They have mostly reduced exposure to bank holdings in different ways. Yes they may have reserves but I don't assume they will necessarily be used to support dividends which may be reduced according to income received. Ain't no safe bolt hole if some are looking at shares for the joy of income.

    And when we get through this I don't envisage the past normal will return.
     
  8. Fargo

    Fargo Well-Known Member

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    You know what is going to happen, share prices follow earnings, even if dividends are paid from capital.
     
  9. Silverson

    Silverson Well-Known Member

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    So are you saying this time it’s different?
    If so how, will we return to past normal in 5 years?
     
  10. SatayKing

    SatayKing Well-Known Member

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    No, it isn't any different to any other economic shock except there is a health issue as an overlay.

    Just there seems to be a flavour in six months time it'll all be over and everything will be sweet again. Going to take much longer than that but that's only my view.

    I've been pondering what will happen to businesses with large debt. Trillions of it out there. Also our universities have a large industry for overseas students. That will take time to recover, if at all, so that will impact on accommodation requirement and all associated with that.

    Seems there is the movement to work from home has gathered pace and it wouldn't surprise me if many decide to continue with it. So why pay rent for big office space? Even Government organisations are now starting adjusting to it.

    Anyways there are now so many espresso coffee making machines bought recently the local coffee shop will be pushing it to sell at $4 - $5 a pop. Down goes turnover.

    My simple view is some companies will continue to make profits and give me some but I think it will be subdued for quite a while.

    But bear in mind I not only know nothing, I know SFA.
     
  11. willair

    willair Well-Known Member Premium Member

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    Maybe just buy a food coffee-van and park it in the back yard because the price on those set-ups have gone value wise have gone down a massive amount over the past few weeks in Brisbane..
    COFFEE VAN / Mobile CAFE / Mercedes Benz Sprinter MWB high roof AUTO. | Cars, Vans & Utes | Gumtree Australia Caloundra Area - Moffat Beach | 1218714180
     
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  12. Speede

    Speede Well-Known Member

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    I think coles and woolies ...taking on qantas workers....so dividend investors are out of luck...
     
    Last edited: 30th Mar, 2020
  13. Casteller

    Casteller Well-Known Member

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    Bank of England considering blocking all banks from paying dividends in the UK. Maybe same thing could happen in Australia if government has to support banks.
     
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  14. wilso8948

    wilso8948 Well-Known Member

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    Which LIC is this? Can it be found on the ASX?..
     
  15. MTR

    MTR Material Girl Premium Member

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    From what I have read on PC... I got the impression that There was no need to worry about the dividends. In other words If the shares tanked, dividend would only marginally drop? Does not seem the case
     
  16. Silverson

    Silverson Well-Known Member

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    I think in this instance anything is possible regarding dividends, in previous bear markets we had job losses and downturns, people however were not limited to their homes and if you had a job you had places to spend. A friend sent me some photos of King st, Bourke st, Tullamarine fwy, and a few others at 6pm-7pm on a week night.....ghost town
     
  17. SatayKing

    SatayKing Well-Known Member

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    Not an LIC but an ETF for the entire global market.

    Which may have consequences for toll roads, airport corporations. Exciting isn't it?
     
  18. Silverson

    Silverson Well-Known Member

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    Generally in times gone by yes, however, you also would have read have a cash buffer as in life anything can happen and sometimes it does. No different to your property investments I’m sure?
     
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  19. Speede

    Speede Well-Known Member

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    yes ...some are in denial ...
     
  20. MTR

    MTR Material Girl Premium Member

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    Yes I understand, all asset classes are at risk

    i expect property prices to fall as well as rents. I am not delusional about this
     
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