ASX Shares Dividends

Britain make it illegal to pay dividend as they afraid that their bail out or financial stimulus are paid to the share holders, not for running the business. It should happen here in Australia.

 

Ok

imagine if you got no rents

well i read dividends drop in recession/downturn .... not this....

 

I've just received notifications for Q1 distributions for my Vanguard funds. I have the wholesale equivalent of VAS, VGS, VGE, VISM, VBLD, and DJRE.

The distributions are about the same as Q1 2019.

I'm expecting significant cuts for Q2.

I also have a chunk of money in the PL8 equity income LIC which pays monthly. Thus far they have maintained their dividend even as the NTA has gone from $1.20 to $.85. Yield has gone from 5% to 7.5%.

I'm also expecting that rosy return not to last.

 

Stock market doesn't close in a downturn or crisis doesn't matter how bad thing gets, that is one of their priority to keep it open as long as possible so people are free to come and go and access their capital.

It closes on very very rare event like the building get bombed in war or something that physically jeopardises the operation of the market.

Exchange is house in fairly tough security, and bombproof building terrorist and stuff won't be able to get to it so only time exchange close is probably in wartime with a nuclear strike or stuff like that.

They have circuit breaker but that only temporary for minutes or so or aftermarket it will lift when market open

 

Westpac will consider whether to stop dividends in May, says King

Geez it is not that hard, you going to get hit with bad debt it is a matter of how much so just
make the decision now and stopped the dividend

 

You don't want to be the first to announce it in a country obsessed with dividends.

 

The USA stock market closed for several days after 9/11.

 

Like I said it physically damage or nuclear radiation that made it unsafe to be there, New York stock exchange is the tenant in the tower, they don't close for other reasons apart from that

 

The NYSE is located in Wall St and has been for centuries, a different location to the Twin Towers. Both the NYSE and NASDAQ closed for a week or more to mitigate panic, not because of damage . The CBOT remained open to allow option trading .

 

I consider this

What a difference 3 months makes

 

The next one in less then six months for CBA as from what i read post ''BRC'' the risk manage teams have stress tested in a bear market like this and may well be a different number depending on the personal circumstances of each share-holder as the margin calls are long gone..
i think the way Bull markets work as a few within this site who have invested in equities before would know full well the way ''Bear'' market work ..
They make money one month then give it back the next,or the money they make in the morning is given back in the afternoon and forced cutting losses sooner..imho..

 

Outstanding.

 

APRA telling banks to slash/stop dividends now.

BOQ have pulled theirs.

Big four scramble to assure investors

The front page of AFR looks pretty ominous in general, lately.

 

Cutting dividends doesnt mean the earnings disappear. On the other hand, losses have to be paid for even if dividends are paid out.

If it turns out the losses are not as big as expected, the dividend can be increased in the future. If the losses are bigger than expected, better to absorb it with earnings than do discounted capital raisings.

While this is a bad thing for retirees and others who use dividends for spending, a lot of the dividend goes to superfunds for people below preservation age, and overseas investors. So you could argue companies are better off withholding the dividend in these times.

 

Banks paid out most of their earning in dividend, so if there are bad debts coming thick and fast most of their earning will be wiped out or in worse case start cutting into their capital reserve then we start to have issues, it needs to raise equity to shore up the capital reserve.

That is the likely scenario in a recession, it may or may not happen but banks are highly leveraged business despite what they said about their capital base, a few % bad debts to their book would get them in real trouble

 

Link below is APRA's letter to ADI's and insurers regarding capital management matters. Second last paragraph is interesting.

Capital management | APRA

 

Nothing to be shocked. Countless examples of individual companies suspending, cutting dividends and even going bankrupt.

What smart investors do is diversify (buy index funds or LICs) and hence even if some companies reduce or suspend dividends the overall dividends generally are reduced not eliminated. You only miss out on dividends if each and every company in index stops paying dividend. That has never happened in the history of stock markets. Never.

Examples from past show expect around 25%-30% dividend reductions based on GFC.

I guess one of the lessons from GFC was many financial institutes got tax payer funded bailouts hence this time around Government wants to make sure financial institutes don't end up coming back for a bailout.

Only financial institutes have been asked to materially reduce dividends rest of the sectors can pay whatever dividends it wants. With AUD down most companies with overseas export income (miners, healthcare) would have got good currency boost in income.

Property investors needs to be more concerned than share investors because the tenant can stop paying rent tomorrow and there is nothing you can do about it. Can't evict them for 6 months minimum You got any property @MTR ?

Cheers,
Oracle.

 

Its a timing thing like everything, depends when you jumped in same as property.

Returns/yields if you have volume and not highly leveraged wont be a major issue

 

I would rather see they don't pay dividends and keep the company and the share-holders safe for now as it's not all bad news as with any business you can claim the cost incomes deductions against your income