How to find a sustainable, low-risk, 10% annual yield... Sniff around the stock market and you'll rarely find a 10% yield equity that is low-risk.
There's always a catch. No free lunch, as Kasking often warns us.
BUT, some of the gang here have already uncovered something remarkable about future yield.
Those of you who were buying GH shares during the peak-fear Pandemic Panic, a time when the properties were forced to close their doors and the very reliable monthly dividend was suspended, those brave buyers of shares are much more clever than others give them credit for.
Why?
Their buying of GH during 2020-2021 will be rewarded with an estimated future annual dividend of $0.60/yr.
Let's do some math:
Buyers at $4, their future yields are 15% ($0.60div / $4sp)
Buyers at $5, their future yields are 12% ($0.60div / $5sp)
Buyers at $6, their future yields are 10% ($0.60div / $6sp)
Looks smart to me.
Reward for bravery will be a sustainable, double-digit, cash yield that very few investors will capture in a lifetime.
How long until the $0.60 annual dividend has paid for the original purchase cost?
Buyers at $4, their future yields are 15% ($0.60div / $4sp)
1/0.15 = 6.7yrs the shares are paid for by dividend
Buyers at $5, their future yields are 12% ($0.60div / $5sp)
1/0.12 = 8.3yrs the shares are paid for by dividend
Buyers at $6, their future yields are 10% ($0.60div / $6sp)
1/0.10 = 10.0yrs they shares are paid for by dividend
So we can see how important patience is for value investors. Given enough time, those dividends become powerful enough to pay for your shares in ten years or less.
And here's your river card...............................
Not only did you pay $6 for a share that will pay for itself within ten years, there is an embedded upside in those shares that conservatively offers 100% capital appreciation potential.
Yes, the $6 shares that generate $6 of income in ten years time and a doubling of share price to $12.
200% return on capital invested for a ten year hold period.
You know who else is buying those inexpensive shares?
Gamehost itself!!
NCIB
Whole thing sounds a lot like Kasking's famous hi-limit strategy.
Win big, invest big, earn big, win big.
Recycle the capital.
Win-win-win.
