BAT, Richemont, MTN

Finweek English Edition - - Cover -

“THEIR PROF­ITS SEEM to be hold­ing up pretty well de­spite the global down­turn. Giv­ing up smok­ing is tough: the rich spend, no mat­ter what the cir­cum­stances. And it would seem many peo­ple would rather have cell­phone air­time than eat,” says Shapiro. While his com­ments may ap­pear flip­pant, they’re based on sound logic.

He’s looking for high div­i­dend pay­ers – com­pa­nies likely to pre­serve earn­ings and im­por­tantly main­tain reg­u­lar pay­outs to share­hold­ers. Even prop­erty unit trusts are start­ing to look in­ter­est­ing, Shapiro says, as they ap­pear able to con­tinue rais­ing rentals, with some yield­ing more than 10%.

Though he cau­tions against get­ting sucked into the his­toric 10%+ re­turns of shares like Old Mu­tual, Abil and Metropoli­tan, he re­mains op­ti­mistic about prospects for ce­ment pro­ducer PPC, which re­mains a strong cash gen­er­a­tor with a div­i­dend yield of around 8%. How­ever, his cur­rent favourite as­set class is pref­er­ence shares: they have taxfree yields of be­tween 12% and 15%. “In this mar­ket they’re a gift from above, de­spite the mumbo jumbo sur­round­ing them – which is to­tally un­founded.”

Con­sul­tant, Sas­fin Se­cu­ri­ties David Shapiro

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