Friday Email: 21 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:
Another torrid week on the markets began on Monday with the FTSE 100 down almost 70 points at one stage before recovering slightly. Bovis homes increased their dividend by 14%, but stopped the huge surge in dividend payouts being seen from the housebuilders. The rot continued on Tuesday Wednesday and Thursday and looks set for another bad day today, so it is now watchlist time as yields are rising rapidly. To put these recent falls into some perspective, with today included, the FTSE 100 will have fallen for nine consecutive days which is the worst downward run since 2011. Since the sell in May adage the market has fallen from over 7000 to below 6300 if this mornings futures are to be believed. The DividendMax model portforlio still remains up 4.4% on the year whilst the FTSE 100 is down 4%. St Legers day is approaching and whilst you can never be certain, now looks like the time for bargain hunting.
BHP Billiton is starting to look very attractive from a yield perspectice as they are expected to payout at least 62 cents when they announce their numbers on the 25th august. That amounts to almost 40p at current exchange rates and they will pay the same again, if not higher in six months time. With the shares trading at just under £11, that is a serious yield, on the optimizer that is roughly 120p in just over 12 months, more than 10%. Cannot be missed.
We have already mentioned Ashtead for its quality earnings and dividend growth.
We also like the look of Aberdeen Asset managment for their quality track record. They are currently trading at a 12 month low and we believe they will be major beneficiaries of the switch from annuities when the taps get turned on next April.
We think that the pullback in ITV shares is also an opportunity as they continue to perform very strongly out there is the real world and for the first time since our inception we are going to mention a bank. We feel that now that Lloyds has returned to the dividend list, they represent excellent long term value. As they will continue to bank as they did pre financial crisis, we believe that they will become the financial powerhouse of the UK banking scene. Remember, that along with HSBC, they are practically the only bank that were nowhere near going bust and were forced to prop up the system by buying HBOS.
In the FTSE 250, we like the look of Murray International trust which is trading at a 12 month low and is in the unusual position of trading below net asset value. They are a top fund manager with a very high yield for a fund and an unsually high rate of growth in dividends for a fund. The best value they have been for years in our opinion.
Lots of dividends coming up for grabs on the countdown, but no really big ones as we are in the interim reporting season and not the finals which tend to be at least twice the size of the interims. There are specials coming from both Next and Michael Page however.
Additions from members this week include the Henderson Far East Invesment trust
The beauty of living in Brockenhurst is that you are only 4 miles from Lymington, so a spot of Sea bass fishing in the Solent with my youngest who is at home from university looks on the cards for me this afternoon. I need to get away from these markets!
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: 14 August 2015
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.
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