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I thought it would be interesting to look at LGEN's dividend history, so I did a bit of analysis in Excel. The basic dividend figures are from dividendmax.com, and they go back to 2006. I'm not sure what the table data will look like when it's pasted here as text, so I'll comment on it in a separate post.
Year Dividend Annual % Total % Annualized
2024 20.34 5.01% 0.00% N/A
2023 19.37 4.99% 5.01% 5.01%
2022 18.45 5.01% 10.24% 5.00%
2021 17.57 0.00% 15.77% 5.00%
2020 17.57 7.00% 15.77% 3.73%
2019 16.42 6.97% 23.87% 4.37%
2018 15.35 6.97% 32.51% 4.80%
2017 14.35 7.09% 41.74% 5.11%
2016 13.4 19.11% 51.79% 5.36%
2015 11.25 20.97% 80.80% 6.80%
2014 9.3 21.57% 118.71% 8.14%
2013 7.65 61.05% 165.88% 9.30%
2011 4.75 23.70% 328.21% 11.84%
2009 3.84 -5.42% 429.69% 11.76%
2008 4.06 -31.99% 400.99% 10.60%
2007 5.97 7.57% 240.70% 7.48%
2006 5.55 N/A 266.49% 7.48%
To clarify, the columns are:
Year
Dividend (amount in pence)
Annual % (% increase from the previous year)
Total % (total % increase from that year up to 2024)
Annualized (annualized % increase from that year up to 2024)
I note that dividends have grown about 5% per year in recent years, but the rate of growth has been much higher in the past. It would be interesting to compare with the CPI (or RPI) increase over this period, but I haven't got those figures to hand. I'll have a look for them if I have time. I think we can safely say that the dividend has fallen behind inflation in the last 3 years (with inflation being very high). My main concern is whether it can keep up with inflation if we are going to into a period of significantly higher inflation than pre-Covid.
One thing that's encouraging is that the dividend did very well in the aftermath of the Great Financial Crisis of 2009. Will it do well if we have another big crisis?
Dividends are fine with lgen they have one of the best dividend cover ratios in the FTSE 100.
Currently standing at 1.8
"I note that dividends have grown about 5% per year in recent years, but the rate of growth has been much higher in the past. "
I think in the last couple of years particularly there was a deliberate aim to grow dividends by 3-5% while growing earnings 5-10% to strengthen the cover. It wouldn't surprise me to see something like that continue, particularly if inflation falls to around its long term levels and the share price remains around the same levels as an 8-10% yield is already attractive. It might open the door too to the start of a share buy back scheme which the funds seem to be forever calling for. However, the downside to that for those of us still building up our investments is that we will probably see a decline in the yields we are buying as the share price rises.
Some of you may think my way of looking at this is a bit strange and unjust, but i look to see how high the sp will go before exdiv each April, ideally i would like it to be the same as the previous year plus an increase inline with inflation, for instance if the sp was 8% lower than the previous year, then you have not gained anything from an 8% dividend, this does seem to be struggling lately whether that's just down to inflation and high interest rates i'm not sure, Aviva on the other hand has had a very good year just falling short of £5 before exdiv, still think this is a good share to hold for income, but if it rises a bit more before exdiv will probably sell some off and put the proceeds into mng
Robleo
That's a fair enough strategy. It also spreads the risk. I'm not reinvesting my div into Lgen this time, rather than sell, and it does have the effect of providing cash for investment elsewhere.
Will hold, as usual, and still doing well with this share. Since the market always knock down the price by the value of the dividend on the Ex-date (14.63p in our case) regardless of whether the share price is 300, 200 or 100p, I feel that when you are starting from already a very low evaluation the upward pressure on the price after the Ex-date will be much greater.
Likewise, happy to hold and add should it drop to 220. I'm just about breaking even at this price but the 8.3% yield I will be accruing this year is the main reason I'm invested.
Fatherjack that is my strategy also. If SP follows last year I will reinvest divi at sub 220p, easy money. There is also a faint possibility there could be a take over of Lgen at them low prices which will be missed if not owning shares. just a thought and not advice.