SPK- Spark NZ (TELCO)

[Snoopy]

I use SPK and IFT mainly as bond equivalents. Both have growth potential but the main reason for holding is the dividend yield. SPK fully imputed at around 5.6% is equivalent to a gross yield of 9.18% at a marginal tax rate of 39c and at a mtr of 33c a gross yield of 8.35%. I'm not really that concerned about the fluctuations around the capital price as I would not be if the capital value of my properties fluctuated. You may say that inflation is good for property capital values however if that is the case then assuming rental income remains constant then effectively rental yields fall. Why then invest in residential investment property with all the problems associated with tenants, no depreciation and the brightline test (and pay a management fee of 8% of rental income plus something like 2 to 3.5% selling fee off the capital value when selling) for a gross yield of around 3 to 5% when I can sit back and take a half yearly incomes in the form of dividends of around 8.5% gross. Now I am not saying that dividend income will always be the same but I think you can get the drift. The other aspect with defensive shares like SPK is that in inflationary times prices can rise (or costs reduced to keep similar margins)

I am not sure that I would agree with Harrie on the 'bond equivalent' status of Infratil. But it is days like this on the market that remind me why I own what some see as a 'boring income shares'. Carnage on world markets, and even the New Zealand market is hit. But Spark is UP 2c on the day!

SNOOPY

discl: happy holder

[676767]

Hearing about lots of redundancies at Spark and subsidiaries today, looks like they are trimming headcount. Don't envy anyone entering the job market at the moment especially in IT

[Snoopy]

Hearing about lots of redundancies at Spark and subsidiaries today, looks like they are trimming headcount. Don't envy anyone entering the job market at the moment especially in IT

Growth can be achieved by either boosting revenues or cutting expenses. Unfortunately in the incumbent market players telecommunications space, growth invariably comes from the latter method. But this is a 'global thing', not just a 'Spark thing'.

SNOOPY

[bull....]

aug is normally positive seasonally too. but sept not normally

wonder if the high of 4.48 was it ? for the usual seasonally strong aug. under 4.30 wont be good

[see weed]

wonder if the high of 4.48 was it ? for the usual seasonally strong aug. under 4.30 wont be good

Maybe everyone selling to pay Auckland City Council rates due next week. That would have to be over a billion out of the economy wouldn't it, I was nearly going to say stolen. Lucky I didn't otherwise I might be had up for hate speech.