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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.



 

 

This email was originally sent on Friday 14 August 2015

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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