4096 days ago
Robert Sutherland Smith started his City career the year before I was born. He is, I think, 157 years old. He and I have worked together for almost eight years at t1ps.com . He is my friend and he is a very funny and intelligent chap. He is now branching out to celebrate his 158th by doing some freelance writing over at TradingResearchPoint on FTSE 350 Income stocks. Robert is a speaker at the UKInvestor Show on April 13th. He is a great one for focussing on yield. RSS today looks at RBS ( or Royal Bank of Scotland as it was in my day).
The share price of RBS (RBS) has headed due south since my bearish comments on the company last month. Reviewing the share in terms of its future dividend paying capacity in the light of recent history, I observed that in the different world and circumstance of 2007 ( when bank capital adequacy was seemingly almost inconsequential and some banks were running on low or dubious capital or both ) RBS had distributed only 30% of its earnings as dividends. That implied on a totally theoretical, best expectation 30% dividend payout from 36p of earnings per share, a dividend of 11..9p; translating into by way of academic exercise, into an annual yield of a mere 3.3%.
