Thursday, 14 August 2014

August Share Purchase - Carillion






Update 26.08.14: My monthly order went through, eventually, getting me another 29 shares, bringing my total to 136. This is great, because I now have reduced my overall cost basis (the shares were about 6% cheaper). This means I am adding at least £1.62 in interim dividends, payable before the end of this year, and ca. £3.55 in final dividends for next year. I should therefore receive about £24.50 in dividends from Carillion for the calendar year 2015 from my entire holding of 136 shares.


What I'm Doing

I am hoping to pick up some more shares in Carillion (ticker: CLLN on the LSE). I already own 107 shares and am hoping to get some this month, before they go ex-div, which I think is in early September.

Their price had gone a bit haywire recently, there were potential takeover/merger talks going on, but it seems to be that Balfour Beaty are holding out for a better deal, CLLN's price shot up and down by around 10-15% in a day or two. Anyway, that is good for me, as the shares are now around 10% less than what I paid for them, so I can hopefully pick them up for less than last time.

So, who the hell are Carillion? Well, you may have seen their name around boards sectioning off building work at railway stations and that sort of thing. They are in construction and support services, have a diversified business, and are globally diversified too.


Why I Like Them

Their fundamentals are pretty good. They have a <15 PE and a highish dividend, so they pass my strategy methods. They have increased their dividend for several years in a row, which also passes my methods, although their operating profit was down a bit last year so their recent dividends have been slightly under the rate of inflation.

They're a useful business and a slightly 'boring' business because of that. By boring, I mean necessary, not a fad, not the kind of thing you take wild speculations on, etc. This also passes my methods.
Reactions:

10 comments:

  1. Hi TV,

    First of all welcome to PF Blogging. I really like the Template you use for Blogger. It's very easy on the eye!

    Thank you for stopping by on my Blog, and adding me to your Blogroll. I feel honored.

    Similarly to your comment on my Catlin Group purchase, I've got my eye on this company. Their dividend yield is over 5% and consistently high over the last 5 years. I hope they turn out to be a nice investment for you.

    All the best
    Huw

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  2. Thank you, I hope Catlin pays off too. I like reading your blog and I loved reading your story and about how you were lucky with your girlfriend being so supportive and awesome - that makes a great and positive difference to have a supportive partner.

    Cheers :)

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  3. That's a very interesting company. I never heard of it before. There are some very high quality companies outside of the United States, I wish there were more info available for US investors.

    But good purchase! Quality at a good price is good.

    Cheers.

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    1. Hi Henry! Thanks for popping in. Do you use morningstar? You can try their .co.UK instead of .com address to research UK shares. You can also try digitallook.com or iii.co.UK

      There's only one thing lacking in our dividend investing scene_which is we do not really have an equivalent of the 'dividend aristocrats/champions/contenders' list. I know there is a UK etf which supposedly consists of our top 30, but when u look into it, it's not all British, not every company has raised its dividend every year, and the timescale is only 10 years... What does do you use for your research?

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    2. I use morningstar, but only the US version. I mainly dig through the 10-k filings to get my info. And calculate the 10 year financials ADVFN. I guess I can look into opening an international brokerage account, not sure if Schwab offers it. Thanks for the info, cheers.

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  4. it is quite likely that your broker already offers foreign shares. most of ours offer a few of the biggest markets in the world e.g. London, Frankfurt, New York, Toronto, etc.

    you could also look into using http://www.ukvalueinvestor.com/ or www.dividendmax.co.uk

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  5. Interesting company, never heard of it before!

    Boring businesses often are established and profitable businesses, so I think you made a good call here. Let's hope they can bump up their operating profit in the next couple of years to provide you with some nice dividend growth!

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  7. Hi TV

    There is a UK dividend list here http://ukdividendkings.com which has a list of companies who have raised dividends.

    I am also looking at Carillion for my next re-investment purchase (probably in November). I would also love to buy US shares and keep the dividend money in dollars or DRIP, but this option does not seem to be available in the UK.

    Best Wishes
    FI UK

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    1. Hi FI UK,

      Thanks for your comment, and thank you for the link. I found that site fairly recently as it was referenced by another PF blog, however there were some errors in it.

      Which broker are you with? Because I have my dividends reinvested automatically, although unlike the American system, I sadly cannot get fractional shares, although I can get fractions of funds...

      I do not believe there is a system to keep the dividends in $ and I think the only way to get around that is to have an American trading account. Some of the brokerages will let you sign up as a foreigner, you just have to sign a tax form when you register with them. If you sell anything, you can use your UK capital gains tax allowance.

      So nice to hear from a fellow Brit,

      Best Wishes,

      M

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