All
other things being equal, high-yielders tend to beat the
market. This table highlights the shares with the highest
dividend yields in each index.
The main worry about high-yielding shares is that the dividends
may not be maintained. For this reason, the second column
is devoted to prospective dividend cover and the last two
columns to net gearing and price-to-cash flow.
Fragile dividend cover is an obvious reason for worry. Other
causes for concern are net gearing of over 50% or a high
price-to-cash flow ratio.
The ideal combination is a high and well-covered dividend
yield, a modest PER, positive (even if negligible) 5-year
growth, average to better-than-average future growth, modest
or nil gearing and a low PCF. With any company of interest,
reference should be made to the Companies Volume to double-check
all the relevant statistics.
REFS is
a mine of invaluable information for the private investor.
