IN mentioning, as I do from time to time, certain stocks offering a somewhat better yield than British Government securities, it must be understood that the prompting comes not from a knowledge that still better returns could not be _ hLtained in some other dir,-...etions but from recognition of the difficulty which now exists in obtaining anything like reasonable security with a yield of over 31 to 31 per cent. I think that some of the Australian stocks are perhaps worth considering at the present time, and New South Wales 4 per cents. of 1942/62 can be obtained at a price giving a flat yield • of £3 17s. per cent., or, even should the stock be redeemed at the earliest possible date, the yield is about £3 6s. 6d. A stock giving somewhat higher yield over a prolonged period ie the Perpetual Debenture Stock of the Grand Trunk Railway of Canada, which at the present price gives a yield of just under £3 16s. per cent., and the principal and interest are guaranteed by the Dominion Government. Reverting again to Australian Loans, New South Wales 5j per cent. stock stands, of course, at a high level, but even at the present quotation of 118, the flat yield is 41 per cent., while if redemp- tion takes place eleven years hence at par, the net yield is still £3 9s. per cent. Another stock of the Perpetual order is the 5 per cent. Debenture stock of the British Electric Traction Company, which at the present price of 131 gives a yield of just over £3 16s. per cent., and, on the latest report, the interest is covered over five times.
* * * * HIGHER YIELDS.
The 6 per cent. Cumulative Participating Preference stock of the British Electric Traction Company is entitled to a further 2 per cent. after the Ordinary stock has received 6 per cent., and for the past six years the Preference dividend has been at the rate of 8-per cent. per annum, on which basis the yield at the present price is just over £4 3s. per cent.
* * * * BANK SHARE YIELDS.
A correspondent suggests that it might be useful to give some idea of the yields on leading bank shares and accordingly I append a few specimen yields. On Barclays Bank £1 B " shares fully paid the yield at the present price is about £3 9s. 6d. On Lkyds £5 " A " shares with £1 paid the present yield is about i. 8 14s. 6d. per cent., and in the case of the £12 shares of the Midland Bank with £2 10s. paid the present yield is £3 13s. 2d. per cent. That yield is based on the latest dividend of 16 per cent. with a bonus of 2 per cent. In this connexion it may be noted that for the five years up to 1930 the dividend was 18 per cent. each time, but from 1931 to 1934 the dividend was 16 per cent. In the case of the National Provincial Bank £20 shares with £4 paid, the (Continued on page 790.) (Continued from page 789.) present yield ,is about £3 14s. per cent. on the basis of the last dividend of 15 per cent. For the five years from 1930 the dividend was 18. per cent. . The latest dividend on the West- minster Bank £4 shares with £1 paid was 18 per cent. with a bonus of 2 per. cent., and at the present.price the shares give a yield of about £3 12s.
Another- correspondent suggests that an enquiry into the yield of Empire and foreign bank shares would be of interest, and I hope to deal with that point at a later date.