reports
- Patrick Harrington
- Patrick Harrington
Land Securities - BUY - Stock Market/Investment Market Disconnect
Land Securities' sharesare standing on a 37% disocunt to historic NAV. the company's property assets could fall by 30% bvefore the NAV fell below the current share price. In addition the shares offer a 4.4% prospective yield. The shares are a BUY for the long-term investor.
- Patrick Harrington
SSE - SELL - Demerger To trigger Dividend Cut?
SSE's shares have somewhat surprisingly outperformed many in the utility sector since Labour's strong showing in the general election. The announcement of the retail demerger looks to be a reaction to the looming standard variable tariff price cap but will not protect shareholders from the potential fall in profits. The management has made no commitment to maintaing the overall level of dividend once the demenrger is completed. The shares are being supported by a misplaced belief in the susta...
- Patrick Harrington
Galliford Try - BUY - Value Housebuilder
Galliford Try's profits should grow strongly from here as its contracting division recovers and its housing and urban regenration activities continue to grow. The shares are very modestly rated and offer one of the highest yields in the market. The dividend is supported by a strong balance sheet and is well covered by both earnings and cash flow. Satnding on an 8.4% prospective yield the shares are a BUY for recovery and income.
- Patrick Harrington
Phoenix Group - BUY - Ready To Go Again
Phoenix Group's strong cash performance since acquiring AXA Wealth and Abbey Life has been impressive and should enable the group to fund a further £500m acquisition from internal resources. The group's dividend is sustainable for many years and should grow as the group executes further consolidation deals. Yielding 6.6% the shares are a strong BUY for income investors.
- Patrick Harrington
- Patrick Harrington
FirstGroup - BUY - Deep value
FirstGroup generate £147m of free cash flow in its last financial year, placing the shares on a free cash flow yield of wel over 10%. Cash flow is set to grow further this year and next as FirstGroup's US businesses grow profits and a number of high coupon bonds redeem. The shares are a deep value BUY.
- Patrick Harrington
- Patrick Harrington
SSE - SELL - Looming Political Threat
SSE is a strategically and financially challenged business and its dividend remains under threat from low conventional and cash flow cover. Its share price is little changed over the last five years despite an epic capex binge that has produced virtually no EPS growth. The next five years are unlikely to be any different and the shares are a SELL.
- Patrick Harrington
Aviva - BUY - Strong Business Momentum
Aviva's shares yield well over 5%, which is supported by a strong balance sheet, impressive cash flow and multiple growth opportunities. There are very few companies in the UK stock market offering this level of yield and the prospect of double-digit percentage rate dividend increases. The shares are an attractive BUY for income.
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