It almost seems like a measurement invented because it looked like it was important, but nobody can really agree on why.
The DPR (it usually doesn’t even warrant a capitalized abbreviation) measures what a company’s pays out to investors in the form of dividends.
A direct calculation of the DPR is by dividing the annual dividends per share by the Earnings Per Share.
DPR = Dividends Per Share / EPS
For example, if a company like PBBANK paid out 55sen per share in annual dividends and had 76.93sen in EPS, the DPR would be 71%. (55 / 76.93 = 71%)
The real question is whether 71% is good or bad and that is subject to interpretation. Growing companies will typically retain more profits to fund growth and pay lower or no dividends.
Companies that pay higher dividends may be in mature industries where there is little room for growth and paying higher dividends is the best use of profits (Beverage, Gaming, Telco & REIT is fall into this group).
Either way, you must view the whole DPR issue in the context of the company and its industry. By itself, it tells you very little.
24 comments:
Just bought back all IGB at 1.98, realize much higher intraday gain :)
Sold some BSDREIT at 1.34.. :)
No wait for its income distribution?
Still keeping some for income distribution, when it drop a bit buy back. :)
horse, are u keeping UOAREITs as well?
UOA is expect to declare income distribution by today (after 5.00pm).
UOA is my biggest exposure in REITS portfolio, follow by BSDREITs and TWRREITs
No, i placed at 1.25 the other day on UOAREIT but not done. :(
UOA just declare income distribution:
FINAL INCOME DISTRIBUTION OF 5.68 SEN COMPRISING 4.76 SEN TAXABLE INCOME AND 0.92 SEN TAX EXEMPT
Date Announced : 15/01/2010
EX-date : 29/01/2010
Payment date : 25/02/2010
can anyone share how a company decide dividends to be taxed or not. And, gains/losses in share trade is tax/deduct-able?
hi neo,
Before i start, need to make clear to you that all dividend are taxable.
Prior 2008, we are using imputation system, where gov impose of tax on profit at corporate level and again at shareholder level. You may find sometime company declared tax exemption on dividend at shareholder level, that doesn't mean that the company don't get tax, just that, the tax is exempted at shareholder level.
After 2008, single-tier tax sys was introduced to replace imputation sys. Under this sys, corporate income is taxed at corporate level and this is a final tax. Companies may declare single tier exempt dividend that would be exempt from tax in the hands of their shareholders.
HOpe it is clear.....
And, gains/losses in share trade is NOT taxable.
Hi horse and hng,
Thanks for the information. :)
I am confused. Is "Share Dividend" nt the same as "Cash Dividend"? In your previous post, I see that you are mentioning "Share Dividend" not "Cash Dividend". So, you mean that PBBANK might be giving "Share" to shareholder as dividend not "Cash"? Am I right?
neo
Just add some information, All listed company have 6yr from 2008 to fully implement single-tier system, by then all dividend received by shareholder will no need to declare in income tax.
Although these single-tier system have some benefit of hassel free to file tax return, but it have negative impact on those who personal income tax rate below corporate tax rate.
In addition, current gross dividend have benefit to be preceived delcare 'higher dividend' at gross compared to single-tier system, even their absolute net payout are the same at company level. This is in turn give rise to preception that stock have higher dividend yield if dividend declared at gross compared to single tier.
However, stock that declared gross dividend have drawback as share price at ex-dividend have to adjust according to gross dividend level raher than net level.
Sold some of my Lonbisc at 1.07... :)
Greenleaf,
Yes, shares div is diff from cash div. PBB might be giving Share + Cash div as they have given previously. Shares div depending on ratio, e.g 1:2 means every 2000units PBB shares u hold u get 1000units from PBB.
Greenleaf
You're absolute right, if PBbank declare share dividend 1 for 20, and if you own 20 share of PBbank, you will receive addititonal 1 share of PBbank free after ex-share dividend date.
In turn of dividend yield, if PBbank trade at RM 11.60, with share dividend 1 for 20, yield will be 5%.
There are pros and cons of share-dividend: pros investor stand to increase stake of PBbank share without incur buy or sell brokerage cost and tax dividend, which may prompt investor to buy and hold PBbank for long term; Have compounded effect if PBbank continue share-dividend in future; Share buyback scheme become normal if company keep practise share-dividend, share price get continue support.
Cons: investor may need to sell share in order to get cash return; shareholder value remain unchange as number of share in market remain
Hi hng and horse,
Thanks again for the information. I really learn a lot from this blog and both of you. :) Thanks a lot.
I am holding BJTOTO and reluctant to sell because I am waiting for dividend in March. Hopefully BJTOTO will give some.
I check the financial detail of BJTOTO, it seems that it is not performing very well this few years. I am afraid that it might not be able to give dividends like previous years.
What do you guys think about BJTOTO?
Greenleaf,
Believe it or not, i get to meet my friend last week. He told me BJTOTO will start its sport gamling business very soon. He say this license given to VT during Dr M time, Pak Lah spoilt it and now reinstatement. Rumors still remain rumor but i personally have kept this baby for ages, no harm keeping it for a little while. Who knows, this rumors might turn out to be true...hahaha
wow, see how PBB runs.. :)
Hope it can break RM12.... :)
thanks very much ^^
I have another question, hope you all can give me a guide.
Based on your opinion, what is the min ROI per year is worth the risk for us to trade in share?
THanks
Neo,
ROI is very subjective, more depend on individual preference. I started off with 7% return p.a till 16% in 2009. To me as long as higher than FD rate of 3% is good enough.
More aggressive type like hng, could have a diff benchmark.
Today manage to swap REITs: sold UOAREITs at 1.32-1.33; bought Quillcapital at 1.00-1.01
Update protfolio
UOAREITs 100%
BsdREITS 73%
Quillcapital 40%
TowerREITs 25%
Trading stock
IGB 8.5%
Neo, horse
My ROI pa have to set at higher beachmark due to fulltimer, solely rely on return from stock investment. As long as ROI can support living and surplus can be compounded, i believe financial freedom can be achieve in future :).
horse
Congrat on your PBbank and Lonbisc super performances. Laughing all D way 2 bank loh.. :)
Hi horse,
That is a great news. I will cntinue to hold on my BJTOTO. hahaha.
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