Podcast: Super cycle or just super dividends?

Simon Brown JSE Direct, Latest

JSE Direct with Simon BrownSimon Shares

  • Wild week for Naspers (JSE code: NPN), Prosus (JSE code: PRX) as Tencent (Hong Kong code: 700) got slapped down by the Chinese government.
  • We’re back at level 3, adjusted. Alcohol sales are allowed and Distell (JSE code: DGH) put out another great trading update. No doubt better if no alcohol bans, but the argument that your industry is under threat wears thin after such an update.
  • President Ramaphosa also announced the return of the pandemic grant to the unemployed at R350 a month until March 2022. This pays to some 9.5million South African and means just over R3billion a month into the economy.
    • How do we pay for it? Dividend tax on these super dividends.
  • Apple $21.7billion in profits, almost doubling the previous year.
  • Alphabet nearly tripled its profits to $18.5billion as advertising revenue grew 69%.
  • Microsoft profits hit $19.1B, up 42% from the previous year.
  • The market capitalization of Amazon, Apple, Facebook, Alphabet, and Microsoft is now over 30% of the entire S&P 500 index and over 40% for the Nasdaq100.
  • Tigerbrands (JSE code: TBS) are recalling 20million tins.
  • Two new ETFs coming to market. Global healthcare from Sygnia and a diverse and inclusive ETF from Satrix.

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Forget super cycle, hello super dividends

  • Anglo Platinum (JSE code: AMS) paid an R175.00 total dividend.
  • Kumba Iron Ore (JSE code: KIO) paid a 7270c.

In both cases, this amounted to a dividend yield (DY) of around 10% at the interim stage.

No share buybacks as Anglo American (JSE code: AGL) own a significant majority of the shares and likely want the dividend back at home.

The question is will other miners be as generous or will they do some share buybacks as well?

If commodity prices stay where they are, we’ll see the same again in six months and into 2022?

If prices remain the same to the end of 2022 (big if?) we’ll get a 40% return from just dividends?

This is what super profits look like.

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JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

JSE Direct Podcast

Simon Brown - Just One Lap founderThursdays are all about hard-core investing with Simon Brown’s famous JSE Direct podcast. JSE Direct started life on ClassicFM in July 2008 and became a podcast in 2011. Every week Simon chats to industry experts, answers listener question (contact him here to send your Q’s) and gives his views on the state of markets and individual shares.

Reach Simon by email at simon@justonelap.com,

or Twitter @SimonPB

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