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Yesterday, 07:23 PM
#2381
![Quote](images/misc/quote_icon.png) Originally Posted by Entrep
Now approaching COVID lows around $3.45
Who woulda thunk it at the start of the year pushing $5.50 and with interest rates peaking.
This should work. It stopped the share price slide of another share I owned, when it got down to insane prices. Spark at $3.60!
SNOOPY
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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Yesterday, 07:55 PM
#2382
![Quote](images/misc/quote_icon.png) Originally Posted by Bobdn
Investing in "dividend" stocks and thinking of dividends as free money (they're not) is fine in the early part of ones investing journey. We're all making mistakes and learning.
Thankfully, however, most people see the light and come to realize that investing for a dividend is no way to build wealth over the long term.
Let's think total return "going forward". We all owe it to our future selves.
Hey, thanks for reading!
The problem with investing in growth stocks on the NZX is that by the time they have a five year track record of 'growth', they are often close to saturating the NZ market. Thus unless the business plan has a multi-country reach, you end up paying top dollar for a share that then suffers 'share price multiple deflation' as it occurs to shareholders that the easy days of growth are over. That means you, as the newbie investor once 'growth is proven', lose money, even as underlying company earnings continue to grow - at an albeit more modest rate.
Spark are efficient and laser focussed at what they do. But to suggest they should cut the dividend and use that money to reinvest in the business? There is no grand plan on the books that needs a bomb load of finance. They would probably just fritter the money away on something like, I don't know - 'Spark Sport 2'? How would that work out for shareholders? If the grand plan is not there, sometimes it is the right thing to do to give any excess free cashflow back to shareholders. Shareholders can then simply reinvest any such money as they wish.
SNOOPY
Last edited by Snoopy; Yesterday at 07:56 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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Yesterday, 08:50 PM
#2383
![Quote](images/misc/quote_icon.png) Originally Posted by winner69
From Market Close report you have an ally
ister said Spark probably didn’t deserve to drop as much as it had, and that the volatility during reporting season could provide buying opportunities
Better go for it eh …. And get in before Snoops lol
The funny thing is Winner, Spark always rallies as the ex-dividend date approaches, then the share price drifts away, as the 'market makers' turn their dividend harvesting attention to other opportunities. Spark shares always behave like this, -except- when they don't! I am quite happy with the dividend yield as bought on my Spark holding. I am also quite happy to 'look through' FY2025 and the dividend reduction, I mean dividend non-reduction. It is no chore at all to wait while you are being paid handsomely to do so!
Unfortunately I can't by any more Spark shares right now as, caught by my own rules, I have to find some other company to put my hard preserved cash to work in first. I am not allowed to invest in the same share twice in a row. Darn it! But then again, if investors are selling cum dividend now, what is going to happen, however irrational that might be, when Spark goes ex-dividend?
SNOOPY
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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Yesterday, 10:13 PM
#2384
Member
My rational for buying more shares today was as follows. I bought at $3.66. There is a fully imputed dividend next month of 14c so effectively I am buying shares at $3.52 (when I take account of the 14c dividend cashback). Next year they are projecting a dividend of 27.5c (75% imputed). Divide 27.5 by $3.52 gives you a 7.8% yield. But lets assume they reduce the dividend to the imputed amount - so a 25% reduction to 20.625c fully imputed. 20.625c divided by $3.52 gives a 5.8% dividend yield fully imputed.
Try putting the money on term deposit - ANZ will currently pay you 5.2 percent before tax for a one year deposit. Already the Spark dividend is better than money on deposit but next year deposit rates are expected to be even lower.
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You must be my brother from another mother kiwikeith…
Your logic was pretty much how i came to buy yesterday.
Only difference is i look at the gross dividend of 0.194 vs cash in hand of 0.14
I had some money looking for a home in the fixed interest space.. I was looking at bonds vs perepetuals vs Spk and decided on Spk.
Snoopy point below was also playing on my mind when I pressed buy button but I managed this by not spending everything available to spend in the one buy….i took a nibble and will now wait…may buy some more before x date or wait till after…just see what overall market does in next couple of weeks as reporting season still in play…looking at you NVidia …lol
But then again, if investors are selling cum dividend now, what is going to happen, however irrational that might be, when Spark goes ex-dividend?
Last edited by Perky; Today at 07:34 AM.
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![Quote](images/misc/quote_icon.png) Originally Posted by kiwikeith
20.625c divided by $3.52 gives a 5.8% dividend yield fully imputed.
Try putting the money on term deposit - ANZ will currently pay you 5.2 percent before tax for a one year deposit. Already the Spark dividend is better than money on deposit but next year deposit rates are expected to be even lower.
Not a lot of additional yield for the added equity risk.
Assuming the central bankers will re start their war on savers then it makes more sense.
Last edited by Aaron; Today at 08:25 AM.
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![Quote](images/misc/quote_icon.png) Originally Posted by kiwikeith
My rational for buying more shares today was as follows. I bought at $3.66. There is a fully imputed dividend next month of 14c so effectively I am buying shares at $3.52 (when I take account of the 14c dividend cashback). Next year they are projecting a dividend of 27.5c (75% imputed). Divide 27.5 by $3.52 gives you a 7.8% yield. But lets assume they reduce the dividend to the imputed amount - so a 25% reduction to 20.625c fully imputed. 20.625c divided by $3.52 gives a 5.8% dividend yield fully imputed.
Try putting the money on term deposit - ANZ will currently pay you 5.2 percent before tax for a one year deposit. Already the Spark dividend is better than money on deposit but next year deposit rates are expected to be even lower.
![Quote](images/misc/quote_icon.png) Originally Posted by Aaron
Not a lot of additional yield for the added equity risk.
Assuming the central bankers will re start their war on savers then it makes more sense.
.......except, Kiwikeith's absolute worst case comparison (there is no plan to reduce the dividend as Keith has very conservatively assumed) the 20.625c 'lowered dividend' is net of tax. But his comparative term deposit rate of 5.2% is a gross figure before tax.
If we look at the modelled gross dividend it comes out as: 20.625c/0.72 = 28.646c
And that implies a modelled Spark gross yield of 28.646c/352c = 8.1%
I would call 8.1% a decent premium on the 5.2% available from a term deposit, particularly as one of the 'equity risks' shareholders face is the SPK share price going up!
SNOOPY
Last edited by Snoopy; Today at 08:43 AM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
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![Quote](images/misc/quote_icon.png) Originally Posted by Bobdn
Investing in "dividend" stocks and thinking of dividends as free money (they're not) is fine in the early part of ones investing journey. We're all making mistakes and learning.
Thankfully, however, most people see the light and come to realize that investing for a dividend is no way to build wealth over the long term.
Let's think total return "going forward". We all owe it to our future selves.
Hey, thanks for reading!
bob you are wise as always.
buying solely based on yield is not very sensible as a high yield may not translate to a high total return
Also one must assume the high yield is it sustainable , in the case of spark which some other posters refuse to acknowledge is that the CFO has said there is a possibility the div will be cut based on outlook failing to provide necessary cashflow.
read bob's statement again if you want real wealth in the long term.
one step ahead of the herd
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Member
![Quote](images/misc/quote_icon.png) Originally Posted by Perky
You must be my brother from another mother kiwikeith…
Your logic was pretty much how i came to buy yesterday.
Only difference is i look at the gross dividend of 0.194 vs cash in hand of 0.14
I had some money looking for a home in the fixed interest space.. I was looking at bonds vs perepetuals vs Spk and decided on Spk.
Snoopy point below was also playing on my mind when I pressed buy button but I managed this by not spending everything available to spend in the one buy….i took a nibble and will now wait…may buy some more before x date or wait till after…just see what overall market does in next couple of weeks as reporting season still in play…looking at you NVidia …lol
But then again, if investors are selling cum dividend now, what is going to happen, however irrational that might be, when Spark goes ex-dividend?
Nvidia looked to post a pretty good result. Revenue, EPS and profit numbers all beat analysts predictions.
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Yeah just as well kiwi K and I bought yesterday….i mean Spk is a play on AI isn’t it?
Spk shares to the moon today ..lol
Nvidia scares me…
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