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The market seems to have come to life again, with the DIY Income Investor portfolio hitting new all-time highs. Rising prices mean that my 'sell' signals are flashing all over the place. I've managed to ignore one but I couldn't find a good reason to say no to another one - so it's Bye-Bye BaBY!
The one that I'm holding onto - even though it's price rise is already the equivalent of 5.8 years' current income (in addition to a still-respectable dividend yield of 4.6%) is Carillion (LSE:CLLN). Moreover it's dividend cover is still a very comfortable 2.5 - and this is forecast to continue. So that's a 'keeper' - for now (but its days are probably limited as I'm guessing that the price will continue to rise - but I can't fight the urge to sell for ever).
The one that I'm kissing goodbye to is Balfour Beatty (LSE:BBY). I bought this at the end of March 2013, doubling up my stake when the price fell in the following week. It's showing a reasonable - but by no means spectacular price rise of 26% - just hitting 5 years' worth of current income. The dividend yield is still 4.5%. Although the dividend cover is still very respectable at 2.5, this is forecast to fall. And some of the other numbers don't look good - for example Return on Capital Employed (ROCE) seems quite low. Looking at the price history over the past few years, this is a share that has bobbed up and down quite significantly, no doubt due to surprises it has given to the market. So, I'm grabbing a profit.
There you have it: two very similar dividend shares - but one stays and one goes. The differences are subtle - and it is obviously by no means certain that I've made the right call. But it's a system, of sorts.
[Sale price: £3.1441]
I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.