Description:

The Dividend Letter is a share tipping service by Stephen Bland published by Fleet Street Publications. Stephen states that he focuses on finding shares which claims to offer lucrative dividends using the P-Y-A-D criteria. P = P/E ratio: Finding a maximum 2/3rds of the market but preferably much lower. The rational is that if the share is already rated on a low P/E it is less likely to fall than a highly rated share, because high P/E shares are frequently get marked down sharply for a tiny underperformance in earnings. Y = Yield (the cash dividend income to be expected for holding the share): This should be preferably 50% above the market. A = Assets (the tangible part of a company, property, machinery etc): so P/BV (Price to Book Value) should be under 1. A company trading under a PTB of 1 is also of interest to a take-over, to purchase the company for less than the net book value of its assets. D = Debt: Preferably none, with a good cashflow. The more debt in the company, the greater the share buying risk because the interest on the debt must be paid first. Substantial cash flow is much more attractive. As with assets, a company with a lot of net cash is attractive to a take-over.

Stephen alleges that adhering to the P-Y-A-D criteria practically guarantees that you will not lose any money, but finding a company with these desirable ratios is almost impossible. Stephen also states you should pay great attention to directors’ comments, especially forecasting, and that after doing all of your research you should have a ‘feeling’ about the company. He claims if it ‘feels’ wrong don’t buy the share, however if the figures don’t add up but the shares ‘feel’ good it could be a good deal. Stephen says this is an aspect of value investing impossible to teach, you either have this ability or you don’t. He also states that there has to be an ‘outer’, i.e. a reason for the share price to rise or a belief that earnings will improve. A cheap share without an ‘outer’ may just remain cheap for years to come.

Stephen Bland has been an active private investor for 40 years. He qualified as a Chartered Accountant in 1971 and ran his own successful accountancy practice in London between 1977 and 2001. In 1999 he began writing on investing for the Motley Fool website and a number of other financial publications and since January 2008 he has contributed to MoneyWeek. The Dividend Letter is Stephen’s own investment newsletter which based on his allegedly hugely successful ‘High Yield Portfolio’ (HYP) strategy. The aim of the HYP strategy is to build a portfolio of shares that will provide a substantial income from the FTSE.

Stephen Bland
Fleet Street Publications
Sea Containers House
7th Floor Upper Ground
London
SE1 9JD

020 7633 3600

£99 in your first year

£159 thereafter

Refunds: 2 month refund period