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01-01-2011, 03:46 PM
I still believe in calculating the yield based on purchase price, and after which, if the dpu fluctuates, you can compare it with the yield based on current price.
For dividend stocks like starhub, why sell the moment the fundamentals don't look so good? Even though they are debt laden, as long as you got it at a substantially cheaper price and they continue to give 5 cents per q, I still think it is good to keep it as long as the divy is constant.
Let's say you got it at $2 where your yield that time is probably around 10% and the divy drops by 20% to 4 cents a quarter, you're still holding onto a yield of 8% which I believe is still higher than most of the counters apart from counters like AIMS or Cambridge. Decided not to hold on anymore? Simple. You can still divest the counter at some profit with the difference in share prices.
For dividend stocks like starhub, why sell the moment the fundamentals don't look so good? Even though they are debt laden, as long as you got it at a substantially cheaper price and they continue to give 5 cents per q, I still think it is good to keep it as long as the divy is constant.
Let's say you got it at $2 where your yield that time is probably around 10% and the divy drops by 20% to 4 cents a quarter, you're still holding onto a yield of 8% which I believe is still higher than most of the counters apart from counters like AIMS or Cambridge. Decided not to hold on anymore? Simple. You can still divest the counter at some profit with the difference in share prices.