Retail investors should invest in companies that have paid out dividends, been ahead of new trends or been able to push pause during the Covid-19 crisis, reports Dan Brunskill for BusinessDesk.

Picking the next round of gains is a difficult challenge in a market that has been reordered by the pandemic, but humanity’s ability to turn itself right-side up seems to be prevailing, in financial markets at least.

Government support and a healthy dose of optimism has just about led the S&P/NZX 50 back into the black — it was up year-to-date until the closure of Tiwai Point pulled it back down last week.

However, this recovery has been uneven. Fisher & Paykel Healthcare and A2 Milk Company have seen their share prices rise by 50% and 30% respectively. The two stocks together comprise more than a quarter of the benchmark, explaining why the index level is high despite only eight of the top 50 firms trading higher year-to-date.

For retail investors who took the opportunity to buy into the sharemarket as everything fell hard, choosing which names will continue to recover and perform in the long-term is the next challenge.

Daniel Kieser, managing director of independent equity research firm Shareclarity, said that, in theory, investors had priced in the various downside risks still posed by the pandemic and that the market could be expected to continue edging upwards.

A forever company?

The way to know which companies will drive that movement is to consider whether they have terminal value, Kieser said. His strategy is to ask: what companies will last forever?

This has been made more difficult than usual as central governments around the world have stepped in to “backstop” companies with wage subsidies and credit supports that have prevented a wave of bankruptcies. “In normal circumstances, a big correction like this would start to wash out companies that probably weren’t on the most stable footing,” said Kieser.

To identify investment prospects that have terminal value and are not just “short-term focused stuff where people try to make 50% in three-and-a-half minutes,” Kieser looks for three indicators.

“The first question is: who rode through the storm and maintained their dividend?” If a company can go through a once-in-a-hundred-year shock without suspending dividends, then that is a company that is likely to still be around on a 20-to-50-year timeline. In this way, dividends can be used as a proxy for resilience.

Examples of locally listed companies that have held their nerve and paid dividends include Meridian Energy, Mainfreight, Argosy Property, Infratil and Sanford, among others.

Fisheries companies like Sanford, as well as others such as New Zealand King Salmon, fall into Kieser’s second category for sound investment prospects: companies that were impacted by a drop in consumer demand but can bounce back quickly with low costs.

Inventory overload

This is especially relevant to those primary industry producers who can delay or stall harvesting products. They may lose revenue from sales, but don’t take a hit to their inventory. This makes those brands less affected than those with perishable products, or even a retailer such as Kathmandu which can potentially miss a fashion season and have to write down unsold, out of fashion stock.

As lockdowns unwind and consumer confidence bounces back, these companies will be able to draw on built up inventories to recover.

Kieser’s final category for investors to watch is companies that were ahead of the curve on trends that have accelerated because of the pandemic. These include health stocks and anything related to the internet. For example, Pushpay has grown its share price more than 100% as every church in the United States suddenly needed an online service management tool.

Brands that are positioned to benefit from sudden surges in online demand are companies that will have long-life spans and terminal value.

“These are trends that we’ve all known about: online shopping is not new, but this has fast-tracked it,” he said.

Webjet and Kogan in Australia were examples of stocks that were online businesses ahead of the trend, he said. Some of New Zealand’s retailers, such as Kathmandu and The Warehouse, are both seeing a boom in online sales but have still been focused on in-store sales that make up the majority of revenue.

This article originally appeared on BusinessDesk. Their team publishes quality independent news, analysis and commentary on business, the economy and politics every day. Find out more.

Competition for customers is fierce among telcos, but which mobile plans offer the best value for money? We compare them to find out.

When I was in high school more than a decade ago, mobile plans were about as simple as you could get. There were just two providers (Vodafone and Telecom, née Spark) with a handful of plans offering calls, texts, and very little else. Smartphones and data were a massive luxury, dial pads and flip phones were still the norm, and the thought of unlimited calls and texts still seemed very far away.

Fast forward to 2020 and consumers today are spoilt for choice. Not only do we have more mobile providers to choose from – spurred by the launch of 2degrees in 2009 followed by Spark’s prepay sub-brand Skinny three years later – but better technology, faster connections, and more affordable pricing. It’s meant our mobile usage has not only skyrocketed but diversified in the last decade – so have our phone plans have managed to follow suit?

Whether you’re just looking to save money or get the biggest deal money can buy, we’ve picked out some of the best-value plans on prepay and monthly to help you get the best bundle for your buck. Obviously this doesn’t cover everything (ie: shared plans), but for most people, this should hopefully be a good place to find out if you should be switching or staying put.

Prepaid 

As the name suggests, a prepaid plan means you pay for your phone service upfront. Sometimes these plans are called “bundles”, “combos” or “value packs” which you purchase using credit loaded onto your account. Prepaid is good if you’re the type of person who likes to know exactly what you’re paying for and don’t like to run the risk of incurring extra charges at the end of the month. 

Under $20 (1.25GB data, 200 minutes & unlimited texts)

When it comes to getting the most for your money, Spark’s $19 plan just about edges out the competition. While Spark, 2Degrees and Vodafone’s $19 packs all offer data and call minutes that roll over and last for up to one year, Spark’s offers some slightly more persuasive “perks” with 50% off Spotify Premium (saving you $7.50 per month) and data stack (giving you an extra 100MB of stackable data for every month you stay on the plan).

But if Spotify isn’t your thing, 2degrees might be your next best bet with its $19 bundle offering one hour of free data per day and unlimited calls to other 2degrees numbers. Also, it’s worth noting that while 2degrees and Vodafone’s minutes include calls to Australia, Spark’s doesn’t.

But if you just want the cheapest deal, then Skinny’s $16 plan is absolutely the one for you. It’s pretty much got everything the $19 bundles have (including rollover and calls to Australia), but instead of perks, you save an extra $3 per month, which isn’t enough to buy you a coffee but hey, if you’re trying to save, every dollar counts. 

$30 and under (2-2.5GB data, 300 minutes & unlimited texts)

These plans offer all the same perks as their $19 counterparts but with more data and minutes for a little bit more money each month. Arguably, Spark’s $29 plan offers the best value for money with its 2GB of rollover data as well as an extra 2GB of “socialiser” data which applies to Facebook, Messenger, Twitter and Spotify use.

Obviously, if you don’t use these apps, it’s worth considering Skinny’s $26 plan instead which gives you an extra 500MB of rollover data (2.5GB) compared to Spark and Vodafone’s $29 bundles (2GB). And while 2degrees’ equivalent also offers 2.5GB, its plan costs $30, which means you have to decide whether the perks (ie one free hour of data per day) are worth the extra $4 a month. 

Under $50

If you want to stick to prepaid and you’re willing to spend more than $30 a month, forget about looking elsewhere and just go for Skinny. Its higher-priced plans offer unlimited minutes, texts, and data at reduced speeds (more on this later) for $36 and $46 depending on how much maximum speed data you’re looking for.

Postpaid (open term)

With postpaid plans (aka “pay monthly”), payment for your phone service is made retrospectively at the end of the month. While it’s a fixed amount, the idea is that with postpaid you can exceed your plan’s limitations if you need to and pay for it later. Postpaid will generally be suitable if you need a lot more data and minutes than what prepaid plans offer or prefer to have the option to always be able to use your phone, even if you go over your set limit. It’s also good for those who travel a lot since roaming rates tend to be cheaper. 

Some providers out there will also offer postpaid plans as contracts. Unlike open term, contract plans will tie you up for anywhere from 12 to 36 months in return for a brand new phone – often sold at a discounted rate – that you can pay off over the period of your contract instead of upfront. It’s a tempting offer if you want a new phone pronto, but for the most part, it’s best to steer clear of deals like these.

“Our very general advice is don’t get locked into a term contract,” says Hadyn Green, senior technology writer at Consumer NZ. “The amount you save on a phone isn’t really worth it over time, especially if it’s a plan that’s way too large for your usage. Often you can find a cheaper phone, not to mention that that phone’s going to drop in price radically after that first year.”

“There are people who just want the newest phone but our official advice is: don’t get locked into plans whenever you can.”

$40 and under

For monthly plans on the lower tier, your best bet is between 2degrees and Vodafone’s $40 plans, which are pretty much identical (ie unlimited calls and texts in New Zealand and Australia), except when it comes to data.

Like its prepaid plans, 2degrees offers 4GB of rollover data plus a free hour of data each day. Vodafone, however, has “endless data”, which means if you go over the plan’s 4GB per month limit, you’ll still be able to access the internet but at reduced speeds. According to Vodafone, you should still be able to do things like update social media, send an email and use GPS, so arguably, if you’re garbage at keeping track of how much data you spend, then Vodafone might just be the better pick for you. 

Meanwhile, Spark’s $40 plan pales in comparison, offering just 1GB of rollover data (plus an extra 1GB of non-rollover data for your first 12 months), 300 minutes and unlimited texts. It does, however, include free Spotify Premium worth $14.99 per month. For Spotify users, it’s worth weighing up the pros and cons of this plan compared to Spark’s $19 prepaid plan (both work out to around $25-$26), but if you don’t: big swerve on this one. 

$60 and under 

At this stage, you’re practically splitting hairs, with all three telcos offering similar deals. With 2degrees, you pay $55 per month and get 10GB of rollover data. With Vodafone and Spark, you pay $60 per month and get 12GB of “endless data”. The plan that’s right for you depends on the perks you’re after: with Spark you get half-price Spotify, with Vodafone you have access to free 5G until June next year (after which it’s an added $10 per month), and with 2degrees you save an extra $5 (albeit with 2GB less data).

Alternatively, Spark also offers a non-endless data $60 plan which will get you just 4GB of rollover data (plus an extra 4GB of non-rollover data for your first 12 months) but includes free Spotify Premium. While it might be worth it for the first year since you technically get 8GB of data in total, you’re probably better off paying full price for Spotify Premium and just going for a $40 plan from Vodafone or 2degrees instead.

$80 and under

If you know that 25GB of rollover data is more than enough for you, then you should opt for 2degrees’ $70 plan. But if spending an extra $10 a month isn’t a big deal for you, then Vodafone or Spark’s $80 plans might be the better option with a massive 40GB of endless data per month. 

Where they diverge is like the $60 and under plans, Vodafone will give you free 5G and 2degrees will save you a tenner, but Spark will give you the choice of either free Spotify Premium (rather than just half price) or free Netflix standard (worth $16.99 per month). So again, the best deal is going to be all about what personally works for you. 

Over $80

Honestly, if you can afford to spend more than $80 on your phone per month, then it probably doesn’t matter which plan gives you the best bang for your buck. But if you must know, 2degrees $85 plan is the cheapest and includes a generous 40GB of endless data per month. Spark’s extra-large plan also includes 40GB of endless data and costs $100 but with the added bonus of free Spotify or Netflix and the option to add up to three mobiles for $30 each. Meanwhile, Vodafone’s $100 bundle comes with free 5G until next year and a whopping 100GB of endless data, which is probably enough for a whole village (or more precisely, 200 hours of standard-definition video).

Final advice

For most people, data will be the deal breaker. That’s why it pays to know how much data you actually use since there’s no point in forking out for 12GB of data when the most you’ve ever used is barely half that amount.

“Go into your phone settings and look at how much data you use right now. That way you can gauge how much you actually need so you don’t buy too much or too little,” says Green.

“The things that you don’t care about or don’t use on a phone, then just cut that out [of your criteria].”

Green adds that door-to-door sales can often be a great place to nab a sweet deal, even if they can be a bit of nuisance. He recommends that rather than dismissing these plans outright or signing up on the spot, ask the salesperson to give you their details and ring the telco provider to see if it’s the real deal.

“These things often work really nicely so don’t always think that they’re scams,” he says. “Always get them to give you a written version of the documents and their number because they won’t be selling them just on that day. They’ll have a commission to sell them over a week, so you can say that you can’t a make a decision on the spot but tell them you’ll call them back.”