Why I bought Air New Zealand as my First Stock
At the time of posting, ASX:AIZ are 2.09. Current value: AIZ 2.08 -0.01 -0.48%
Well, I finally purchased my first stock…. ok so this is a little in retrospect, seeming I have already bought this in October and I’m only just now posting it. I’ve also made another post about another share purchase.
New website, so new posting.
Needless to say, this is a very exciting time for me, I have finally bitten the bullet and bought some Air New Zealand shares. I bought 930 @ 1.67 a piece (plus brokerage fees). I thought this was an absolute bargain…
Air New Zealand Details – Why Did I Buy?
The dividend yield was extremely high (over 10%) which I knew was normal for this airline as they pay out a high percentage of profits. This is only a medium term hold for me. I want to make a certain percentage (20%) and then take my original stake back, effectively giving me 20% “free” shares in the company. With these 20% of shares I will hold on my original stake I will keep them for a long term view, for the high dividend.
Here are some examples of pros and cons when dealing with an airline stock.
- High Dividend Yield
- Low Price to Earnings Ratio
- Quick Small Time Growth
- Price Volatility
- Oil Price Dependent
- Low Long Term Growth
- No Franking Credits
Overall, I believe that Air New Zealand is a great share to own, especially at the price I was handed it. It has limited growth, but pays a healthy dividend yield which should maintain its levels depending on oil price. If oil price remains the same for 5+ years I will be very happy. What happens when oil price blows out to $100 a barrel again. It would be a sell from me then.
Please discuss below if you have had any dealings with the company or their shares, I would love to hear your thoughts.