Friday Email: 20 March 2015
Every Friday morning our lead analyst Mark Riding sends out his weekly run-down and upcoming events in the investor calendar, like this one:
The FTSE 100 has had a good week rising almost 200 points on the week and hitting record highs on Thursday and again this morning, although it has now fallen back from them. Companies earnings continue to be strong and this will continue to drive the market higher through to the end of the year. There will be some bad times along the way as always, but as a general rule, stick with dividend paying stocks with dividend growth forecast and you will not go too far wrong.
The week past saw good dividend increases from Xaar (12.5%), Savills (21%), Ted Baker (19.6%) and Next (16.3%). They all came on the same day which made the rest of the week dull in reporting terms.
The week ahead is also very quiet but two of our model portfolio constituents are reporting namely GVC holdings and Bellway. GVC likes to pay dividends and paid out a total of 10 dividends in the past two fiscal years. Bellway remains the pick of the housing sector from a dividend perspective being the only housebuilder that manged to pay dividends in the aftermath of the financial crisis. Although, to be fair to Berkeley Group, our other favourite, they only started paying dividends in 2013 and they have been extremely impressive since then.
Additions from members saw Polar Capital added to DividendMax.
Our latest research is progressing well and will be out later today or on Monday at the latest. It looks back at the stars of the recent reporting season and asks if they can do it again. We start with thirteen companies, all of which could sit in any portfolio and reduce it down to a choice of five.
The Friday email is delivered to over 20,000 subscriber’s every week, and remains a widely read run-down of recent events and what investors can expect in the week ahead written by our chief analyst Mark Riding.
It’s included as part of the free DividendMax trial.
Read next: 13 March 2015
The FTSE 100 had a poor week overall falling over 100 points in what was a pretty dull week in general as the reporting season wound down. We saw good increases from Centaur Media, SIG and Cineworld, but that was about it. As we alluded to last week, stocks at the top of the optimizer tend to be about to do something bad with their dividend or are undervalued and we saw that with two of them this week. The worst was Morrisons supermarkets who are promising a dividend of at least 5p next year which ends a proud recent record and takes us back to the level paid out in 2008. We have pencilled in 6p which is slightly higher than the 5.8p paid in 2008. Esure decreased their dividend slightly, which we though was a pretty good effort given that car insurance premiums are on the rise now and with their excellent managment. We added them to the trading portfolio on results day at 212p. The declared dividend is 11.7p, a 12% reduction on last year for a yield of over 5% for that dividend alone.
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