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All about the Dividend Yield

  1. elit

    13,316 Posts.
    Reflecting on Fridays play for Metcash where had accumulator doing major shorting exercise shortly after open to accumulate at lower prices which was confirmed by S3 XT posted at 4.12 for 2m shares or cash related product (ie closing out short selling position) as then put massive props into the close to have sellers / shorters sell heavily into big stacks at 1.50, 1.495 , 150.5 etc - classic play to play on Friday for number of reasons...but bigger reasons for this become more apparent in reflecting major turn of events occurring in market over the last week which will influence future market focus.

    Reading article in this weekends AFR which made me realise what this is all about to aggressively accumulate on Friday lower priced shares which will no doubt run into this week to chase one of the best high yield dividend stocks, and no that is not based on historical dividends but forecast dividend yields.

    For as stated in the article with the interest rate cut on Tuesday the RBA has effectively driven the market in a "frenzy" (their words) to chase yield stocks. And with property market also cooling off this makes high yield (income) dividend stocks more attractive than ever.

    And doing some research of dividend yield stock by forecasts one year out, Metcash is in top 10 of dividend yield stocks based on stock selector scanner did on highest foreast year 1 dividend yields. So despite reduced dividend forecast still one of the ASX stocks with highest dividend yield.

    And then if you look further out it gets even better as dividend payout ratio (and hence yield) was only lowered at last half year as a temporary measure to fund the transformation program which ends in 2017 and where stated will return to higher previous dividend payout ratio. So on top of transformation program which is to improve earnings, cashflows will also improve with cut in transformation capex expenditure on transformation program from 2017.

    Given number of brokers in last few weeks who have upgraded MTS to buy/strong buy and articles like this in AFR suggest you do your own research before these sort of articles also start to hit the herald sun, daily telegraph etc as funds and other smart money would have been already well set then and share price much higher than is now.

    Good luck with your investing / trading but with low interest rates fueling another mini boom in stock market realising myself now is time to look at stocks to buy and hold and put the trading to one side.

    All the best

    PS if you know of other equally high top 200 ASX stocks with dividend yield like Metcash than please let me know as I am on the hunt for these sort of stocks.

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