Wednesday, February 23, 2011

The Straits Times on iPad

SPH poised to launch products for iPad
It has been waiting for Apple to come up with a better policy for publishers


THE renewed popularity of tablet PCs presents a lifeline for the newspaper industry to survive in the digital age, but key to the equation is ensuring that the content provided remains compelling and unique, said Patrick Daniel, editor-in-chief of the English and Malay newspaper division of Singapore Press Holdings (SPH).
Mr Daniel: 'Success in the digital space will not be easy, but we can look forward to a challenging and exciting future'
Speaking at the division's annual awards ceremony yesterday, he revealed that SPH would soon be launching products for Apple's iPad. The group will also introduce applications for the iPhone, and is looking to launch Android products using Google's OnePass scheme.
'I'm excited . . . tablets are an ideal form to engage a younger, more sophisticated audience. The key will again be the quality and uniqueness of our content, as well as the way we bundle our print and digital products in a winning strategy,' said Mr Daniel.
While many newspapers across the globe had quickly launched iPhone and iPad editions of their products following the popularity of these gadgets, SPH had refrained from doing so, preferring to wait until Apple came up with a better policy for publishers, he said.
'We are clear that we won't give our products away for free. We want to sell subscriptions, not applications at US$1.99 a pop, and we want to bundle it with print,' he added.
That dream can now come true. Apple recently rolled out a new subscription service to all publishers of content-based applications that allows them to set the price and length of subscription for their products.
Apple also made clear that publishers will be able to sell content outside the application store - which will allow publications to bundle their print, iPad and iPhone products.
Part of the reason that SPH could afford to be patient was that its print business is still alive and kicking, unlike that of many of its counterparts in the US and Europe. The print business continues to be the main profit and dividend generator for SPH.
Last year, total revenues from the group's newspaper and magazine segment rose by almost 10 per cent from a year earlier to $974 million, accounting for 71 per cent of the group's overall turnover.
'The sun has not yet set on us,' said Mr Daniel.
Still, there is no doubt that in an increasingly digital world, newspaper companies need to have a presence - and a strong one at that - outside the print medium.
On top of launching applications for tablet PCs and the iPhone, SPH will also be relaunching its online products, said Mr Daniel.
The Straits Times, for one, will integrate citizen journalism website Stomp (Straits Times Online Mobile Print) and online television service provider RazorTV under a revamped website.
The Business Times, too, will freshen up its website and launch a financial portal that will see it ride on synergies with stock portal - a subsidiary of SPH.
'Success in the digital space will not be easy, but we can look forward to a challenging and exciting future,' said Mr Daniel.

Check out my review/predictions of SPH back in December 2010.

Well, looks like my prediction is coming true. SPH is finally pushing out content for the iPad. Better still, the company is focusing on more profitable subscriptions, not apps at cheap prices. I must also thank Apple for creating this better subscription service for publishers.

I also predicted that SPH will gradually focus more on web-based, digital news. The company did something better than my prediction. STOMP and RazorTV will be merged. Business Times and will be merged into a financial portal. 

SPH is trying hard to diversify its revenue sources even though the print business is still doing fine. As a shareholder, I am assured that the company is moving in the right direction and it is well-prepared for future challenges.

Peace Out,
Dividends Warrior

Saturday, February 19, 2011

The Potential Risks to Dividends

So far, I have been advocating the advantages and rewards of dividends-investing. However, like all things in the universe, there is always a flip side. Investing in dividends-paying companies carries certain risks too.

If you think dividends are all rainbows and sunshine, think again.

Risk 1: Dividends are NOT guaranteed

There is absolutely no hard written law that compels companies to pay dividends to their shareholders. Absolutely none. The decision to distribute dividends depends with the board. During an economic downturn, dividends can be drastically cut or even stopped. During the 2008/2009 global financial meltdown, many companies that historically paid huge dividends stopped doing it. Banks were the worst hit.

Personally, I try to select companies with a long, proven track record of paying dividends. Take Starhub for example. This telco company not only paid attractive dividends throughout the 2008 sub-prime crisis, it even increased the payout from 4.5 Singapore cents to 5 Singapore cents in 2009. This is even more impressive given that it lost the exclusive broadcast rights to the Barclays English Premier League.

Risk 2: Low Growth

Dividends-paying companies are usually not associated with high growth. A company that is growing rapidly will retain its earnings and re-invest in R&D, attracting/retaining more talented staff. Simply put, the company is expanding aggressively. 

Therefore, you will seldom see a company having high growth with high yield. In most cases, a company that has reached a peak, with little room left for expansion, will have a stable dividend yield.

Risk 3: High Yield

Some of you must be scratching your heads. "What? High Yield is a risk? Surely not!"

Well, it is a risk. High yield could be the result of a One-off, Special distribution. Therefore, it will probably not happen every financial year. This is considered bad for the dividends-investing strategy because income investors like me want consistent, stable and PREDICTABLE dividends year in, year out.

I also analyse the company's past financial reports to make sure there is sufficient cashflow to sustain the current dividends. Select companies that have strong, increasing cashflow. Please do your due diligence.

Think you have other risks about dividends to share? Please leave your comments below.

Peace Out,
Dividends Warrior

Sunday, February 6, 2011

Rabbit Origami Better Than Gambling

I have been gorging myself silly with all the Chinese New Year goodies. It was fun visiting my relatives and friends over the past few days. Lots of catching up was done. 

However, I have never been a big fan of gambling during Chinese New Year. Unfortunately, gambling has always been part of my family's Chinese New Year itinerary. Black Jack, Poker and Mahjong sessions are the norm. We even played with real money. In the past, I will only play a few rounds just to placate my seniors. Otherwise, they will call me a spoilsport.

This year, I decided to make a stand. Why should I do something which I resent? Worst still, the young children (some of them are primary school pupils) also want a piece of the action after watching the adults gamble. The adults are setting a bad example for the children. I certainly do not wish to see my nephews and nieces turning into gambling addicts when they grow up.

I came up with the brilliant idea of making rabbit origami. My little nephews and nieces love origami. I also teach them the value of recycling magazines into origami. This tactic successfully distracted them from the gambling tables. In fact, it worked so well that I faced another problem. They could not stop folding the rabbit origami. OMG! 

Well, I guess it is a "good" problem to have. Lol - -"

Alright, let me present some of the masterpieces! 

The black and white rabbits. They are a loving couple. ^^

The purple, yellow and orange rabbits. Three musketeers!

A lovely family of rabbits. Guess who is Papa rabbit? ^^
Mama rabbit has a longer right ear. Dun ask me why. That's the handiwork of my niece. Lol!

The children enjoyed folding the origami and I also enjoyed teaching them. I think I am gonna continue using this tactic next Chinese New Year.

Peace Out,
Dividends Warrior 

Thursday, February 3, 2011

January 2011 Dividends Portfolio Update

No.  Stock Lots Dividends Collected Average Price
1.  SPH 3 $600.00 $3.71
2.  Starhub 6 $850 $2.27
3.  M1 3 $0.00 $2.210
4.  UOB KayHian 2 $0.00 $1.67
5.  Singapore Post 2 $0.00 $1.15
6.  Capitamall Trust 3 $278.40 $1.70
7.  Suntec REIT 2 $296.86 $1.33
8.  CACHE Logistics
3 $73.00 $0.950
9.  CitySpring
 Infrastructure Trust
3 $94.50 $0.61
10.  K-Green Trust 3 $0.00 $1.087
11.  First Ship Lease 10 $61.55 $0.455
12.  Parkway Life REIT 1 $0.00 $1.620
13.  First REIT 3 $0.00 $0.675

*Note: Blue-coloured stocks are blue chips on the Singapore Straits Times Index 

Total dividend collected (since Jan 2010) $2,403
Total Invested Capital $60,910
Dividend over Capital (%) 3.94%

The market rallied between December and January. Therefore, I decided to take a little profit off the table. I sold 1 lot of UOB KayHian at $1.97 as I feel the price is peaking. The Kim Eng take-over news also helped to push up the price. This reduced my total invested capital to $60 910. I did not sell off my entire holdings in UOB KayHian because I still want some exposure in the banking/ financials sector. This was the only change in my dividends portfolio in January.

All my counters performed within expectations in January, no major, scary price fluctuations. First REIT performed exceptionally well, rising steadily from $0.675 to $0.760 after Ex-Rights. Good Stuff ^^ 

I received $34.46 from Suntec REIT, thus increasing my total dividends collected (since Jan 2010) to $2 403.

Looking Forward:
Cash will start to flow into my coffers in February. I will receive dividends from CapitaMall Trust, Suntec REIT (again), First Ship Lease, CACHE, SingPost, Parkway Life REIT and First REIT. It feels like a belated Chinese New Year ang bao. ^^ Heee

I will like to wish all my readers a Happy and Prosperous Rabbit Year!

Peace Out,
Dividends Warrior