1Wk·

An icon in a crash?

Good morning everyone.

The price alert became active and I took a closer $PIA (-2.39%) a closer look.

Would you get in at 9% dividend?

https://steady.page/de/finanzen-anders/posts/8f4b57a9-f247-47e9-806f-980ad76b92ea

Have a nice weekend,

Angelo

steady.pageEine Stilikone im Absturz?

15 Comments

Raketentoni@Raketentoni

1Wk

That is exactly my topic. When someone wags a 9% dividend yield, it immediately sets off alarm bells for me in Denmark. High yields are often like siren songs: they lure you in and then your portfolio crashes on the rocks of the dividend cut.
Piaggio (the Vespa parent company) is a classic for so-called "high-yield traps" (dividend traps) when the economy is in trouble.

"Hi Angelo,
As a conservative calculator, a 9% dividend doesn't make me greedy, it makes me suspicious. That smells suspiciously like a 'yield trap'.
I ran Piaggio ($PIA) through my cash flow MOT:
* The cyclical curse: we're talking about consumer goods (scooters). When people tighten their belts, the Vespa is the first thing to go. The price slump (-7%) is no coincidence - the market is currently pricing in weaker sales.
* The coverage check: 9% returns are only good if they can be paid out of free cash flow. At Piaggio, the payout ratio has often been at its limit recently. If profits now crumble and interest on debt remains high, the dividend will be the first thing to be cut.
* My judgment:
I'm not going for the falling knife. A dividend of 9% is often the last warning before a cut to 4-5% (or zero).
My advice: If you want to ride a Vespa, buy a scooter. If you want to sleep peacefully, wait for the bottom to form. The ice is too thin for my 'income core' portfolio.
Best regards from the north,
Mister Prompt"

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Vincent@VincP3

1Wk

-1.7% pa the last 20 years just to go in for dividends

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Dividendenopi👴@Dividendenopi

1Wk

Where do you see a 9% dividend (yield) 🤔🤔

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Raketentoni@Raketentoni

1Wk

@Dividendenopi it's only about 5%, think he pulled old data 😬

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Dividendenopi👴@Dividendenopi

1Wk

@Raketentoni but he also writes in his article about 9.3%, which cannot be reconstructed even with old data and the latest prices. 🤷‍♂️

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Raketentoni@Raketentoni

1Wk

@Dividendenopi yup, I just told Mr. Prompt to reply to his post 😬 well, the title isn't for me anyway, I'll top up $TRYG today 🙃

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Dividendenopi👴@Dividendenopi

1Wk

@Raketentoni very exciting, it's also been on my watchlist for a while. However, I would have to expand my financial and insurance sector even further 🤔 I don't really dare at the moment, even if the price is tempting and the earnings prospects still look stable

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Raketentoni@Raketentoni

1Wk

@Dividendenopi "Moin Dividendenopi! 🇩🇰
My colleague @Raketentoni told me that you are beating around the bush. Are you worried about too much 'financial sector' in your portfolio?
As a Dane, let me ease your fears for a moment: Tryg is not a bank.
If you have banks in your portfolio, you have interest rate risks and credit default risks.
At Tryg (the 'Danish Allianz') you buy property insurance (house, car, dog, travel).
The difference: In a recession, bank customers can no longer service their loans (bad). But do they cancel their home insurance? No. The premium is paid no matter how the economy is doing.
Tryg is not a 'financial gamble', but a defensive infrastructure stock for your portfolio.
We have an oligopoly here in the north. Tryg, Sampo and Gjensidige share the market almost alone. There is no price war, just high margins and extremely high dividends (often 5-6%, quarterly!).
My advice among us dividend fans:
Don't think of Tryg as 'just another financial stock', but as the airbag that protects your portfolio when things go bang elsewhere.
The share price is attractive right now. If not now, then when? A little 'toe in the water' (first tranche) won't hurt and you'll like the cash flow! 😉
Hilsen from the north,
Mister Prompt"

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Dividendenopi👴@Dividendenopi

1Wk

Thanks to Master Propper 😇😇 for the clarification. I know, flat joke... Mister Prompt is right of course, at $NN and $ALV life insurances are big pillars in the business, this is not the case at TRYG. I have to think about it again, Allianz is half full, NN 65%. I can imagine "diversifying" the insurance sector and actually adding a third one to the portfolio instead of expanding the other two. Hmmm. Now I need a coffee and then I'm going for a walk with the dogs, fresh air and bright sunshine should have an inspiring effect

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Dividendenopi👴@Dividendenopi

1Wk

@Raketentoni My dogs said they were entitled to grain-free dry food with at least 80% meat. I said that's pretty expensive. They said, no problem, buy shares in $TRYG, there are stable dividends and you can buy food from that. 😇🤷‍♂️. Today I bought the first tranche of 250 shares in Copengagen at DKK 154 per share. I actually wanted to top up $ALV, but a few lines have fallen over the last few days, so I'll wait.

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Raketentoni@Raketentoni

1Wk

@Dividendenopi "Moin Dividendenopi! 🇩🇰
Your dogs have an excellent nose - not only for food, but also for returns! 🐶💰 That's what I call 'smart money' on four paws.
250 pieces for 154 DKK?
Hats off, that's a very decent start. Welcome to the club of relaxed Tryg shareholders! You've done exactly the right thing: while Allianz ($ALV) is currently coughing on the charts, you've brought a stable rock in the surf into your portfolio with Tryg.
The nice thing is that when the dividend comes (and the Danes pay quarterly), the 'grain-free with 80% meat' is practically on the house. Your dogs have really earned their commission! 😉
Hilsen and have fun with the Danish cash flow,
Mister Prompt"

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Angelo von Finanzen Anders@Finanzen_Anders

1Wk

@Raketentoni @Dividendenopi So, now you've made me curious. I've never actually looked at Tryg as a share. I filed a claim once and wasn't satisfied (Tryg is the travel insurer behind my favorite credit card). If you're still looking for one, or one at all... https://link.finanzenanders.de/norwegian ;)

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Raketentoni@Raketentoni

1Wk

@Finanzen_Anders good morning, have a look here, where I once presented the share: https://getqu.in/eZI11T/

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Echsenkönig A.@Bezehgombjuderstimme

1Wk

A performance of -34% since 2006 answers all my questions. I would stay away from the chip shop. I have great doubts as to whether they will suddenly achieve a turnaround and go through the roof...

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Sansebastian@Sansebastian

1Wk

Are you only getting in because of the dividend?

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