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Friday Email: 11 September 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 was having a very good week until around 2pm on Wednesday when it hit 6276, up from 6098 first this on Monday morning. At the open on Wednesday the US was weak and the Dow went on to fall over 200 points. Added to that on Thursday there were significant ex-dividend factors (BHP, Admiral, Glencore & Standard Life)  which resulted in a pullback from the high of 6276 to a low of 6130. The FTSE 100 has since rebounded slightly and is currently trading at 6135 for a rise of about 35 points on the week. So, still volatile after what looked like a promising start to the week.

The past week saw some disappointing dividend increases from the retailers Next and Dunelm with both increasing their ordinary dividends at rates way below those seen in the past 8/9 years. Next increased by 6% and Dunelm by 7.5% compared to an average annual increase from Next since 2006 of 16.6% and an average annual increase from Dunelm since 2007 of 27.4%. (This is probably a reflection of the very poor retail sales numbers that we saw recently) However, we cannot criticise them as in addition to their great dividend track records they both pay regular special dividends or undertake share buybacks. This of course is nothing compared to the woes of the food retailers as Morrisons began the rebasing of its interim dividend at 1.5p (4.03p last time) and promised not less than 5p (13.65p last year) in total for the year. Meanwhile the housebuilders continue to make hay as Redrow doubled its final dividend from 2p to 4p and Barratt Developments increased its final dividend by 46% and will pay a special dividend.

The week ahead is quiet, but there is never a problem with Galliford Try's numbers (out on Wednesday 16th) who on all of the safety metrics in the DividendMax selection process such as Dividend cover, CADI, and FDI always come out near the top. They have a really impressive track record and I would expect it to continue again this week. Since 2008 their dividend has gone from 3p to 72p if our forecasts are correct for this years final dividend. The iron ore price has been rising steadily this week as Chinese stock diminish which is good for holders of BHP Billiton who went ex this week.

This email was originally sent on Friday 11 September 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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