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The Top40 stocks and their 2017 returns including; dividend yield, historic PE, market cap and percentage move for the year.
Steinhoff not shown, but it would be way down bottom right it is was.
Overall a good year for large stocks with a few winners in the top left corner.
Hi Simon - thanks for this post. I'm a keen student of visual display of information, especially graphs. A key tenet of effective visual displays is to make them as intuitive as possible, that is, more accessible than text - otherwise they lose their intended advantage. As a small investor, I'm puzzled by the above graphic. The catching colours of the graphic do not seem to be matched by the yield of useful information. It is about the returns from the JSE top 40 listed companies by market capitalisation. Fair enough, but does the graph represent that? To begin with, what is the empirically demonstrated relationship between dividend yield and share price movement of a stock? In graphing, isn't there supposed to be a hypothesised relationship between dependent and independent variables, at least? Sorry, I'm just a small time investor. Then comes the P/E ratio which you add in. How does that relate to the dividend yield and share price movement? A cursory look at your graph does not seem to yield any obvious pattern. Companies with similar P/E ratios (for example, FFA, RDF, NED, SBK,OML,SAP,SOL) have widely differing returns and dividend yields. Please, again, pardon this small investor. All this may be above my head. The most important question I ask myself as a small investor at the end of the year is, "Was it worth the sleepless nights (risk in other words)?" A simple plot of the price movements (with or without the dividend payments added in for total return) plotted against (ubiquitously available) share beta values would be a great device for answering that question. This can also be done by sectors as well, since we know that the beta for the index is 1.0. So, relative to the riskiness, which shares were the best investments in financial services sector amongst OML, SLM,SBK, NED, DSY, for example? I hope you forgive me for mentioning the obvious (but I've seen funny plots before), the (total) return is the dependent variable (Y-axis) and the beta value is the independent variable (X-axis). You may well discover in the process that the market cap, dividend yield and P/E ratios don't have very much to do with fair (risk-adjusted) returns. I guess I'm trying to say that your conclusion about "a good year for large stocks with a few winners in the top left hand corner" may have been rather casual, as a summary statement. Then again, long leisurely summer holidays tend to soften our minds. Please forgive me if I have caused any offence, for none was intended. I'm just a small joe with only a few pennies to his name and no race horse whatsoever. But I do love pictures that speak a thousand words. Maybe the ones for 2018 will?
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