You could grow your JSE investments 50% faster - with this simple change to your investing habits

by , 27 February 2019
You could grow your JSE investments 50% faster - with this simple change to your investing habits
Imagine this… You could've bought Capitec shares at R26 a share in 2008.

In the past year, the company paid investors R15.75 in dividends. That means 60.50% growth on your original capital JUST FROM DIVIDENDS.

If you add up all the dividends since 2008, investors received R69.88 in dividends. That's 268% growth from dividends alone.

In fact, a study of dividends and returns on shares on the JSE since 1967 shows that dividends account for 46.9% of the total returns investors make on the market.

So, if you ignore dividends, you ignore HALF of the money to be made on the JSE! Possibly more.

The fact is now, more than ever, dividend-paying shares are super attractive. And, a quick search showed me there are scores of them to choose from.
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This simple strategy beats ANY investment hands down - and to claim R1,558, R1,433 or even R1,342 instant payouts, simply add me to your contacts...
 
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Sceptical? I understand…
 
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These 37 penny stocks pay bigger dividends
than the JSE average!


 
I just ran a filter on my share-trading platform and found a whopping 37 penny stocks that pay larger dividends than the JSE average.
 
It comes as no surprise that out of more than 390 investable shares on the JSE there are only about 10% with higher than average dividends.
 
And even less of them are penny stocks.
 
Simply put – investors don’t typically look towards penny stocks as dividend payers.
 
Looking at this list you’ll actually see 23 shares with dividend yields larger than 5%.
 
Think of stocks like CSG Group, Afrocentric, Metrofile, Alexander Forbes, and Merafe…
 
These are well known companies with strong records of growth and earnings in the past decade or so.
 
Even shares like Wescoal, ARB Holdings, Bowler Metcalf, and Value Logistics are trading on very attractive levels…
 
Just how powerful can dividends be?
 
Here’s an example of a powerful dividend payer I’ve researched for my Red Hot Penny Shares newsletter:
 

 
Here’s an example of a powerful dividend payer I’ve researched for my Red Hot Penny Shares newsletter:
 
In the chart you’ll see the cumulative dividends you’d have received from this company starting 2010 – had you invested R100,000 into it.
 
By 2018 you will have received R144,982 in dividends.
 
That’s a 144% return on your investment – from dividends alone!
 
In fact, in 2018 this share returned 26% in dividend growth and that’s before any capital growth!
 
The share actually returned investors around 300% in capital growth over the same period!
 
 
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Two ways to identify the top dividend payers on the JSE
 
There are countless criteria to apply when you are looking for top dividend payers.
 
But here’s two easy ones every investor should understand:
 
 
  • Dividend Yield: If you were unsure what dividend yield is – it is the dividend divided by the share price. So for instance, a 5c dividend and 100c share price gives us a 5% dividend yield. You can compare this figure to the income receivable from things like fixed deposits and government retail bonds. Shares usually have lower income from dividends than interest based investments would. But that’s made up for by the fact that a company can grow its income, and thereby its dividend. You won’t get growing income from a bond…
     
  • Dividend cover ratio: Dividend cover refers to a ratio that compares the profit a company makes to the dividend it pays. If a company has an earnings figure of R3 million and it pays out R1 million in dividends it will have a dividend coverage ratio of 3. That means it can pay three times its dividend from one year’s profits. If on the other hand the dividend cover ratio is, 0.5 it means the company is paying a dividend that’s bigger than the profits it makes. That’s a big warning sign. You want to look for companies with dividend cover ratios better than 1, even 1.5.
 
 
By looking for strong dividend growing shares – you can increase your gains from JSE listed shares by up to 50%. In some cases, you can even get your entire initial investment back in dividends within a couple short years…
 
I’m currently looking for more opportunities like these – and will give you updates as I find them.
 
Here’s to unleashing real value,
Francois Joubert,
Editor, Red Hot Penny Shares
 
P.S. If you’d like to take advantage of my current top 5 picks for 2019, you can find out how to access them here.


You could grow your JSE investments 50% faster - with this simple change to your investing habits
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