Seeking Alpha

Dividends Boom

View as an RSS Feed
View Dividends Boom's Comments BY TICKER:
Latest  |  Highest rated
  • Greif, Inc: A Small Packaging Company With Catalysts, Dividends And A Little Something Extra [View article]
    Good article, thanks for the compliment of including a link. Will follow.
    Oct 9 09:31 PM | Likes Like |Link to Comment
  • Investigating Carnival's Dual Share Classes [View article]
    I wouldnt recommend it, no guarantee that you can predict what way the spread is going, plus the reward for guessing right on a say 3% move doesnt seem worth the cost of borrowing shares + risk of being wrong. Maybe somebody more versed in arbitrage then me could pull it off, but not my cup of tea
    Apr 7 12:24 AM | Likes Like |Link to Comment
  • 'Good Greif'! Investigating 2 Share Classes Of 1 Company [View article]
    It was a long article, with a lot of specifics, but eventually this statement near the end:
    "In fact, as long as the premium remains under 50% for Class B common shares as compared to Class A common shares (and perhaps slightly lower than that allowing for a slight discount due to the extra liquidity risk associated with Class B common shares), one should consider owning GEF.B to be a preferable option to owning GEF."
    Sums up my thoughts on what to own.
    Apr 4 05:41 PM | Likes Like |Link to Comment
  • Making The Case For Which BHP Billiton To Own [View article]
    Thank you Paul, that is truly a great compliment. I too value the exchange we have had, as my thorough research at its core comes from having to fully defend each assertion I make to logical counterpoints made by others.

    The true issue with this is a lack of firm, citable sources as to why it is 0%. This is the main reason why the article didnt go through great lengths to explain the 0%, as I felt 1) it would dilute the message, and 2) building the case for it would create an unnecessary sideshow.

    Thank you again for the kind words, and I hope I am able to keep contributing meaningful articles.
    Apr 4 02:04 PM | Likes Like |Link to Comment
  • Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
    There are about 3 billion shares outstanding, approximately 39 million shares being added a year (102 mil - 63 mil) is 1.3% annual dilution from the scrip program as it stands, definitely not preferable, but fairly minor.
    Apr 4 01:05 PM | 2 Likes Like |Link to Comment
  • Making The Case For Which BHP Billiton To Own [View article]
    Thanks for the follow-up, and I agree BBL is the superior choice. There is an article up above on it ;) You should note, two more posts were made to the bottom of the thread previously, before this post was made. I also would like to thank you for the kind discourse you brought to this matter, and I think I have a few more things of value to add.

    With regards to using a friend as a source, he forwarded me his 1099-DIV forms that spelled out every dividend received, and all foreign withholding. Actually, this was very compelling source evidence for the years that I had it as this is a IRS-mandated form from a SEC-governed reporting company. This did not provide evidence for any years outside of what I had the statements for, and was evidence of a result, rather than a process. So this was purely used from an exploratory standpoint. I was merely narrating to you the course of my research.

    With regards to using financial sites as a source, this was purely exploratory, not the basis of my findings. Again, I was merely narrating to you the course of my research.

    With regards to "After reading your comment to me I thought of many potential exceptions to the text you cut and pasted from the 2009 20-F Filing." Feel free to read the filing. Just scroll down a little bit, and there will be a table of contents. Click on "taxation" and the amount you have to go through is drastically reduced (page 234-235 area).

    Continuing on, the text that was cut and pasted was a statement of fact. It was not written in such a way as to be followed with disclaimers, and the end of the selected text was the end of the statement. What the text was not stating as fact was that every dividend paid out was ‘franked’ under Australia’s dividend imputation system or are declared by BHP Billiton Limited to be conduit foreign income. This is where the pooling of evidence from other sources was necessary, in order to reach a conclusion.

    With regards to "My reference to you doesn't confuse. Very simple to read and understand." Your reference includes in it this statement: "the gross amount of each of those payments is subject to a final withholding tax rate of...30% for dividends" and this statement:"fully franked dividends are not subject to withholding tax" Since it distinguish any further, your reference was simple to read, but did not provide a full understanding of whether or not there is withholding in this case. All it did was state the general rule (30% withholding), and then the exception to the rule (fully franked dividends are not subject to withholding tax). As clear of a source as it is, it still does not settle the issue. This is what makes the additional research I did necessary for the article, as your source merely stated that there were two possibilities.

    (An aside: I also oddly enough couldnt find anything on conduit foreign income on Australian tax sites, perhaps this is because it doesnt apply to Australian tax payers, only foreign investors. Anyway, a large amount of information can be found that is provided by Australian companies with foreign investors.)

    In the end, I still hold that I have enough evidence on hand to make the statements that I did. This again, really isnt the main thrust of the article, nor does it change the underlying argument being made for why BBL is preferable to an American investor.

    However, if anybody has evidence to the contrary, I will certainly do my best to correct the matter.
    Apr 4 01:00 AM | 1 Like Like |Link to Comment
  • Making The Case For Which BHP Billiton To Own [View article]
    Another source on whether bhp dividends are fully franked. I was unsure as to whether or not this was reputable so i didnt source it in the article, make your own determination.

    Appears on list for fully franked dividends on ASX (therefore qualifying for 0% withholding for US investors), for the year 2012: http://bit.ly/YwT9yC

    Of course, being fully franked isnt the only reason withholding tax would be 0, also could be declared as conduit foreign income. (See earlier comment)

    From the FAQ of another Australian listed company:

    "Q: What is Conduit Foreign Income?
    A: Conduit Foreign Income indicates the extent that Amcor's earnings are derived outside of Australia. The extent of CFI affects the amount of Australian withholding tax paid on dividends to non-Australian shareholders."

    Are you starting to see why this part of the article was de-emphasized? lol
    Apr 3 10:14 PM | Likes Like |Link to Comment
  • Making The Case For Which BHP Billiton To Own [View article]
    (Not specifically directed at Paul) On this comments thread the source for what makes shares equal economically equivalent has been questioned. This from the 2011 Form 20-F:

    http://bit.ly/16pN4E2

    "The principles of the BHP Billiton DLC are reflected in the BHP Billiton Sharing Agreement and include the following:

    -the two companies are to operate as if they are a single unified economic entity, through Boards of Directors that comprise the same individuals and a unified senior executive management;

    -the Directors of both companies will, in addition to their duties to the company concerned, have regard to the interests of BHP Billiton Limited shareholders and BHP Billiton Plc shareholders as if the two companies were a single unified economic entity and, for that purpose, the Directors of each company take into account in the exercise of their powers the interests of the shareholders of the other;

    -certain DLC equalisation principles must be observed. These are designed to ensure that for so long as the ‘Equalisation Ratio’ between a BHP Billiton Limited share and a BHP Billiton Plc share is 1:1, the economic and voting interests in the combined BHP Billiton Group resulting from the holding of one BHP Billiton Limited share are equivalent to that resulting from one BHP Billiton Plc share."

    I cited the company website originally because it is much easier for somebody to click through and read than a Form 20-F filing.
    Apr 3 09:26 PM | Likes Like |Link to Comment
  • Making The Case For Which BHP Billiton To Own [View article]
    Hi Paul, please note that a draft update to the Taxes section has been submitted, and I am awaiting for it to be published. This does not clear up everything you have mentioned, but does a much better job of explaining the dividend franking process.

    Here is obviously the main issue, and the quote from your comment, 'You wrote: "Since both listings have United States-listed ADRs, let's look at the tax implications for a US investor." Then, under dividends for a US investor buying dividends of BHP and BBL, your table shows 0% foreign withholding for BHP and BBL.' and then you went on to make a case for why there would/could be 30% withholding.

    Here was my source, I did not expand further on this issue because it was not the main thrust of the article, and I didnt want to dilute the message. This was what led me to putting a 0% in for Australian withholding.

    From the 2009 20-F Filing
    http://bit.ly/XPcOdD

    "Dividends paid to non-residents of Australia are exempt from withholding tax to the extent to which such dividends are ‘franked’ under Australia’s dividend imputation system or are declared by BHP Billiton Limited to be conduit foreign income (CFI). Dividends are considered to be ‘franked’ to the extent that they are paid out of post 1986–87 income on which Australian income tax has been levied. CFI is made up of certain amounts that are earned by BHP Billiton Limited that are not subject to tax in Australia, such as dividends remitted to Australia by foreign subsidiaries. Any part of a dividend paid to a US holder that is not ‘franked’ and is not CFI will generally be subject to Australian withholding tax unless a specific exemption applies."

    From here I talked to a friend of mine who held BHP for 3+ years before realizing that BBL even existed, I asked him to look up his history and he showed 0% withholding for all of his prior dividends. I also snooped around the internet and found similar statements with none to the contrary.

    I looked at Yahoo! Finance which for countries with dividend withholding taxes records the dividends net withholding, and the full dividend was there for BHP. Same for Morningstar.

    Read a few articles with no mention of the withholding. http://bit.ly/10y5ZdF is one of them.

    In the end I probably should have added a disclaimer, but I felt fairly confident in the fact that for BHP, the withholding was 0% on dividends.

    "For dividends, the United States has a tax treaty with the United Kingdom reducing their dividend tax withholding to 0%, and for Australia the 0% still applies."

    Hope this clears up my reasoning. If any long-term shareholders of BHP would chime in on their dividend withholding experiences, it would be greatly helpful. If I am incorrect I will certainly do my best to fix it, but from everything I found BHP witholds at a rate of 0% for Australian taxes.
    Apr 3 09:09 PM | Likes Like |Link to Comment
  • 'Good Greif'! Investigating 2 Share Classes Of 1 Company [View article]
    Thanks for the suggestion! I will look into that.
    Apr 3 01:04 PM | Likes Like |Link to Comment
  • Making The Case For Which BHP Billiton To Own [View article]
    This listing is for the BHP Billiton PLC (BBL in the US) share class. With regards to South African tax law, and whether or not the UK withholding tax is applied, I am unsure. Beyond this I have nothing of value to add. sorry.
    Apr 3 10:02 AM | Likes Like |Link to Comment
  • Choosing Which Royal Dutch Shell Share Class Is Right For You [View article]
    thank you for the follow-up
    Apr 3 12:52 AM | Likes Like |Link to Comment
  • Choosing Which Unilever Share Class Is Right For You [View article]
    Absolutely. Unilever declares consistent quarterly dividends in Euro terms, with a history of raising that dividend in the 1st Qtr every year (since they went to quarterly dividends). Here is a link (http://bit.ly/12dyuid) to the NV shares' dividend history. The fluctuation you see quarter-to-quarter has to do with changes in the exchange rate for Euro-USD.
    Apr 2 05:04 PM | Likes Like |Link to Comment
  • Investigating Carnival's Dual Share Classes [View article]
    Thank you for sharing this. You are 100% correct with regards to the reason that they kept the UK-share class. The biggest hurdle was the concentrated ownership of P&O Princess by a few wealthy UK stakeholders, who incidentally had a very low cost basis in their shares (as well as national pride and other attachments). Doing the deal with this structure, as you said, didn't result in a forced taxable gain on the sale on their part. Originally, I had a large write-up on this in the article, but when editing I took it out as it 1) added another 50+% to the length of the article and 2) doesnt much affect the decision on which share class to buy today.
    Apr 2 04:29 PM | Likes Like |Link to Comment
  • Choosing Which Unilever Share Class Is Right For You [View article]
    Thank you for bringing this up, I should have clarified better. Before the 2006 stock split, UN and UL were not interchangeable on a 1:1 basis. Instead 3 shares of UN was equal to 5 shares of UL. So an investor who held 3000 shares in UN had the same voting and economic share of the combined Unilever as somebody who held 5000 shares of UL (or any other 3:5 multiple). Another way to look at it was UL represented 3/5 of a share of UN. By splitting the stocks at different rates at the same time they were able to create the pure 1:1 relationship that they now have.
    Apr 2 12:35 PM | Likes Like |Link to Comment
COMMENTS STATS
103 Comments
40 Likes