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Friday Email: 23 September 2016

Every Friday morning our lead analyst Mark Riding sends out his weekly run-down and upcoming events in the investor calendar, like this one:

A very strong week for the market; up over 200 points and now looking to challenge the 7000 mark on the FTSE 100. I expect the FTSE 100 to reach record highs this year and next on the back of the yield gap. As always with the stock market it will be a bumpy ride.

The past weeks have shown that those commentators who suggested that the dividend bonanza was over were wrong. There are still a great many companies posting excellent dividend increases. Swallowfield (55%), 32Red (18%), Brooks Macdonald (15%), Saga (23%), Kier Group (17%) and CVS Group (16.7%) (this morning) all posted double digit dividend increases. The rest all posted small increases with the exception of DX Group who have had their issues this past 12-18 months. Nevertheless, they declared a final dividend of 1.5p against a share price of 21p for a yield of just over 7% from the final dividend alone. Their total dividend for the year was 2.5p giving a yield of 12% if they can match it next year. A big if. However it is unusual to get much yield at all out of a potential recovery play, let alone 12%. (witness Glencore and Anglo below)

Ironically, it has been those companies that attracted some of the dividend gloom comments, the miners, that have outperformed the market this year with BHP Billiton up 45% so far this year and Rio Tinto up 30%. For the really brave investor, those companies that actually cut their dividends namely Anglo America and Glencore have massively outperformed. Anglo has more than trebled and Glencore more than doubled. This goes to show that Hedge fund managers are not always right as a number of them were heavily short of Anglo at the start of the year.

The week ahead starts and ends quietly with some reporting activity on Tuesday, Wednesday and Thursday.

Going ex this coming Thursday there are about 15 companies with the biggest yields coming from Kier group and Hansard Global.


This email was originally sent on Friday 23 September 2016

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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