Saturday, July 31, 2010

Investment Process- The 10% gain

In continuation of the previous post - Investement Process-The seed for investment , i will elaborate on the 10% gain per annum. A 10% gain in stock market is actually nothing fantastic and probably easily achievable by many. However, my aim is to have a gain of 10% per annum with a very small possibility of losing the initial capital. This can be achieved by buying stocks that gives constant high dividend payout.

The following stocks listed are giving out a yield of ~10%:
(1) Cambridge Industrial (REITs)
Current Price: S$0.505
Estimated DPU: S$0.04952
Yield: 9.8%

(2) SP Austnet (Utilities)
Current Price: S$0.98
Estimated Dividend: AUS$0.08 or S$0.096
Yield: 9.8%

(3) Innotek (Tech)
Current Price: $0.525
Estimated Dividend: $0.05
Yield: 9.5%

(4) Pacific Shipping (Trust)
Current Price: US$0.29
Estimated Dividend: US$0.032
Yield: 11%

All the above stocks have historical records of constant dividend payouts.
Cambridge and Pacific Shipping pay out dividends every quarter, SP Austnet pays every half a year and Innotek pays once every year.

In my current portfolio, it comprises of shipping counters like Ezra, Ezion and YangZiJiang as well.
I am slowly exiting these counters and shifting my funds towards the counters mentioned above.
With these dividend-play counters, I am pretty confident that it should provide me with a consistent ~10% yield.
Of course, close monitoring of each of the companies business results is needed as a change in business model/performance will change its yield performance.

Last but not least, I will continue to look out for counters which can give a yearly 10% payout.

Caution: Although the 4 counters mentioned above has yield ~10%, not all of them are "healthy" or has a good business model. I will elaborate more in later posts.

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