Friday Email: 14 August 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 fallen over 200 points this week to take us back to where we were at the start of the year and so we will pick out 15 big dividend increases to indicate how income outperformance leads to big share price performance. There is nothing on the corporate front today so we will look back over the past 12 months to see who the true stars are. The past week saw a number of dividend reductions from Ladbrokes, esure and Serco and very little to write home about in the way of big increases.
Lets take a look at the dividend effect upon the share prices of companies paying big dividends. This is by no means an exhaustive list
Company Expected Increase in 2015 Price Aug 14th 2014 to date
Howden Joinery Group 36.9% 342 to 490p
Dixons carphone 41.7% 330 to 430p
Betfair 70.0% 1090 to 2801p
Crest Nicholson 28.7% 350 to 570p
Big Yellow 32.3% 524 to 697p
Renew 35.0% 273 to 337p
Bellway 44.2% 1559 to 2455p
32 Red 25% 56.7 to 70p
Ashtead 32.6% 894 to 951p
Easyjet 14.5% 1258 to 1689p
ITV 25.5% 205 to 258p
Unite 38.4% 407 to 672p
Man Group 35.6% 112 to 166p
Greggs 20.9% 557 to 1218p
Rightmove 21% 2412 to 3731p
It is clear that the dividend effect is extremely important, whether driven from earnings or high cover or both. The market has done nothing so far this year and yet these high dividend payers, many of which were predicted have all outperformed the market dramatically. I will once again draw you to Ashtead group which seems to have missed the boat somewhat. They report their 1st Quarter results on the 2nd of September and that could be the catalyst for playing catch up with the rest.
The week ahead sees Bovis Homes, John Wood John Menzies, Persimmon, Glencore, Hochchilds, Admiral, Hikma, Rank,Phoenix, Premier Oil, Costain, New World resources and primary health properties.
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.
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Read next: 07 August 2015
The FTSE 100 continues to travel in a very narrow band and still is lacking any direction as is the norm for this time of the year. We have seen a lot of declarations with the majority being single digit increases mostly in line with our expectations. Unite pulled a big surprise by increasing their interim by 150%. This is that time of the year that I start to bulid up my watch list for the end of August / early September and next week it will be largely complete and published towards the end of the month. I have noticed a big pick up in the use of the website over the past week so perhaps I am not the only one who likes to bottom fish for targets in August.
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