Some more good work from Gotti today reading the market right:
…market fear was highlighted yesterday when Australian shares were falling and the low points of NAB and ANZ gave a yield of 10 per cent after adjusting for franking credits.
Westpac’s yield peaked at just under 9 per cent and even CBA topped 7 per cent.
In today’s low interest rate environment, a stock only reaches a 10 per cent yield (and also 9 per cent) when the market has grave fears that the rate of distribution will not be maintained.
Privately, one or two bankers are shaking their head when it comes to dividend payout rates and might even be grateful that the market is preparing investors.
But no one would dare utter a word.
Yep. Payout ratios are extreme and bad loans are going to rise. There is no fat left and dividend cut are coming.
