Irish Dividends v UK Dividends

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Daddy Ireland

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I have to say over recent years the yields on all bar a handful of Irish shares is pathetic. Even our biggest companies are yielding poor dividends. When contrasting this with the UK there are numerous top names yielding over 5%. What is it about Ireland at all that company dividends are in such poor shape and I am excluding the banks here for obvious reasons. The main banks in UK while not being in great shape have yields of approx or better than 5%. Even allowing that sterling could weaken further is it not fair to say that buying UK stocks with good dividend cover and a good yield makes sense. OK sterling could weaken by the dividend amount or more in the first year but sterling will bounce back if it does. Can people see sterling at 90P or worse for very long. Not me anyway.
 
maybe its because we dont have any big dominant companies, no big pharma like GSK, no big oil like Shell, no big tech either they all foreign. The banks if they had of been managed properly should have been the dividend payers but instead they are still recovering from 2008. Also the UK does not have dividend taxes which encourages companies to pay out more in dividends as it goes straight to investors ( irish investors still must pay tax on uk dividends though).
 
UK investments trusts are still the best tip I've got from askaboutmoney. Bought one the day of the Brexit vote, anticipating a temporary fall in both the share price and Sterling. Wasn't disappointed, even though Sterling fell a good bit further (from about €1.24 when I bought), the share is still up 10% in Euro terms since then (20% in Sterling), and has paid a solid 4% dividend. Only wish I'd bought more, and still might.
 
dub_nerd said:
UK investments trusts are still the best tip I've got from askaboutmoney. Bought one the day of the Brexit vote, anticipating a temporary fall in both the share price and Sterling. Wasn't disappointed, even though Sterling fell a good bit further (from about €1.24 when I bought), the share is still up 10% in Euro terms since then (20% in Sterling), and has paid a solid 4% dividend. Only wish I'd bought more, and still might.
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What one did you buy?
 
a prominent poster on this site believes dividend yield is irrelevant in terms of building wealth ( and they seem to be well read on the matter )

all about total return , how has the iseq performed compared to the FTSE this past number of years ?, when you convert sterling to euro , the iseq has outperformed the FTSE by a distance
 
galway_blow_in said:
a prominent poster on this site believes dividend yield is irrelevant in terms of building wealth ( and they seem to be well read on the matter )

all about total return , how has the iseq performed compared to the FTSE this past number of years ?, when you convert sterling to euro , the iseq has outperformed the FTSE by a distance
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Yes but remember the iseq still has not recovered from 2008, I think it's one of the few European indices that has not got back to 2008 levels yet. If something drastic happened the food companies post brexit then iseq would be badly affected again. It's unlikely but the iseq is really too small and undiversified for a buy and forget investor, my own opinion albeit
 
joe sod said:
Yes but remember the iseq still has not recovered from 2008, I think it's one of the few European indices that has not got back to 2008 levels yet. If something drastic happened the food companies post brexit then iseq would be badly affected again. It's unlikely but the iseq is really too small and undiversified for a buy and forget investor, my own opinion albeit
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i know it hasnt regained its all time highs , i was comparing performance ( in euro terms ) in the past five years ( excluding dividends ) , according to google finance the euro denominated etf which tracks the ftse is up only 17% since february 1st 2013 , contrast that with the performance of the iseq this past five years
 
galway_blow_in said:
a prominent poster on this site believes dividend yield is irrelevant in terms of building wealth
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I would agree with the prominent poster.

Ryanair generally does not pay dividends.
Berkshire Hathaway does not pay dividends.

If I sell my shares in Ryanair, I pay 33% CGT on the gains.

If I get dividends I pay over 50% in taxes.

I would be quite happy if all the companies I have shares in stopped paying dividends.

Brendan
 
dub_nerd said:
Not sure if I'm allowed mention it as AAM doesn't discuss particular shares.
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Just to clarify:
11 We don't discuss individual shares
You won't find any messages suggesting investing in CRH or asking if AIB is a good investment. It is not the purpose of Askaboutmoney. We don't facilitate stock tipping or speculation about the future performance of individual shares.

While an investment trust is technically a share, I wouldn't regard this posting guideline as applying to them.

The purpose of the guideline is to stop people pumping shares in particular companies and to stop people who have no idea what they are talking about giving their analysis of shares.

Brendan
 
Which would you prefer?

a) to receive a dividend which is likely to be taxed at 52%?

b) for the management of a great company to reinvest the spare cash in profitable ventures with a view to growing the value of your shareholding and enabling you to take gains whenever you like and only pay 33% tax?
 
galway_blow_in said:
a prominent poster on this site believes dividend yield is irrelevant in terms of building wealth ( and they seem to be well read on the matter )
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Well, I don't agree that dividends are irrelevant - far from it. However, I do believe that it is irrational to look at dividends in isolation.

A couple of points to bear in mind when looking at the total return of the shares in any investment trust (IT):-
  1. The total return of any share in an IT assumes that dividends are immediately reinvested in the IT shares at the time that the share goes ex-dividend. It ignores the fact that an investor will have to pay income tax on those dividends and stamp duty and broker commissions to buy the additional shares; and
  2. Most ITs (including CTY) use leverage to magnify their income and capital gains. Obviously, leverage can also magnify capital losses.
 
I disagree that dividends are irrelevant. A lot of people are yearning for a return on their money and to some extent depend on a return as part of their income. Receiving a 5% dividend and paying 50% tax still leaves one with 2.5% approx net which is a hell of a lot more than a bank would give you. As for your point regarding companies that don't pay dividends well that's ok too but there are a huge amount of income funds that exist to produce a yield that highly depend on dividends. Also, there are plenty if companies that pay dividends whose share price is higher today than a few years ago.
 
Daddy Ireland said:
I disagree that dividends are irrelevant. A lot of people are yearning for a return on their money and to some extent depend on a return as part of their income. Receiving a 5% dividend and paying 50% tax still leaves one with 2.5% approx net which is a hell of a lot more than a bank would give you. As for your point regarding companies that don't pay dividends well that's ok too but there are a huge amount of income funds that exist to produce a yield that highly depend on dividends. Also, there are plenty if companies that pay dividends whose share price is higher today than a few years ago.
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Nobody is suggesting that receiving no return is better than receiving a dividend.

The point is that investors should look at total return rather than obsess about dividend income.
 
I'm sure the amount of great companies about other than the two you mentioned Ryanair and Berkshire Hathaway that one could invest in are few and far between. Also, there are many, many great companies that pay dividends too.
 
There are plenty of publicly traded companies that rarely if ever pay dividends. Amazon, Alphabet (Google) and Facebook are three biggies that spring to mind.
 
Brendan, I think it is very blase of you to say people shouldnt depend on dividend income as part of their income and should in your opinion just sell some shares if they want income. Your opinion to sell some shares if one wants an income is purely a tax driven one. Many people want to park their money in great companies that pay good dividends and in the hope over time that their principal can grow too.
 
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