Dividend Yield

Australia’s Unyielding Pursuit of Dividends

In today’s ageing environment where super funds are collectively an enormous participant in the stock market, the hunt for yield can be unrelenting. Dividend stocks are highly sought after because they offer a consistent revenue stream of cash that is generally higher than both bonds and term deposits.

Compounding this desire is the availability of franking credits, whereby investors will receive a refund of the tax that has already been paid on the earnings related to the dividend. This is a unique tax law found only in Australia and a few other nations, but it increases the attractiveness of dividends as this tax refund effectively increases the yield of the dividend.

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The Wide World of Equity Investing: Looking Beyond Australia

My colleague Luke Durbin recently wrote a great blog post on how a DIY investor can search for investment ideas on the ASX. It makes a lot of sense for an Australian investor to focus on ASX listed equities (particularly if their time or effort is limited) given that we have much better visibility and exposure to these Australian companies. Because of this we often can understand a company better, how they operate, what their market is and what their growth prospects are.

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Where to find investment ideas for your DIY portfolio

 

As a beginning investor, it may seem daunting as you start to build a portfolio. You have some money that you want to invest but you don’t want to put all your eggs in one basket. So you decide to find a handful of companies and diversify.

Good companies are everywhere. Some you will see in the world daily – like Dominoes or the Banks. But many good companies can go unnoticed by those who are not looking. Equally, just because a company is large and well-known, does not automatically qualify them for an investment.

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Should the ASX be stricter on tech IPOs?

The ASX is currently undertaking a public consultation for feedback on a proposal to place stricter regulations on small companies trying to list on the ASX, particularly those with little or no revenue. While the changes aren’t significant, it creates an interesting debate around what the role of the ASX should be between companies seeking capital, and the investing public willing to provide it.

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NBN Co TPG tin can

NBN Co’s Impact on TPG and the Telecommunications Industry

 

For the last few years the government-owned NBN Co has been busily building and selling their national broadband network (NBN) that is expected to bring Australia up to world internet standards. Whether or not this is accurate is not the point of this article, but to ask the question does the existence of a government controlled entity in a monopolistic position undermine the free market element of its economy?

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4 Things you should know before investing in small cap stocks

Small caps stocks – companies with a small market capitalisation – can present tremendous opportunities to the savvy investor who can determine a fast grower at a reasonable price. But with this comes a particular set of risks that should be taken into account by all who invest in them. Here are 4 things to consider before investing in small cap stocks.

(The definition of a small market cap will vary between investors, but I’ll assume it refers to a company worth less than $100m in market capitalisation. Conversely, I’ll assume a large market cap refers to a company worth more than $1b.)

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Why the Price to Earnings Ratio can be Misleading for Investors

The Price to Earnings Ratio (P/E) is one of the “go to” metrics for most investors, brokers, and funds when in the very early stages of vetting an investment idea. It gives an indication of how much the market is willing to pay for a stock in terms of its earnings. It essentially tells you “How many years will it take for me to get my investment back from earnings?”

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