A quick catch up and update on a couple of stocks (Howden Joinery and Jupiter Fund Management) which are held in the Compound Income Scores Portfolio before the month end and the latest performance update on this later this week.
Interserve (IRV) which I wrote up recently and talked about on a Podcast, served up their final results today which were mixed against the consensus. This was because the turnover was slightly light at £3204.6m v £3321 (F) although the earnings did come in ahead at 67.9p v 63.8p which they said represented 15% growth and suggested that margins may have been slightly better than expected. While on the income side we saw 6% increase in their full year dividend to 24.3p which was 0.1p behind the consensus.
...as today we have had final results from Persimmon (PSN), a fruit and one of the largest UK house builders. As with other house builders these are strong, as one would expect, so I won't dwell on the detail for which I suggest you look into the full announcement at their investor website. On the income front worth noting though that they boosted their planned return of capital under their plan to 110p again this year and they boosted the extent of this further by suggesting a similar level of returns for the next five years too. At this mornings price of around 2050p this would give a decent yield of 5.4%.
While on the earnings front the 173p seemed to well ahead of forecasts and close to the 176p currently forecast for the coming year. So I presume we could see some upgrades to earnings and dividend forecasts on the back of these numbers. However, this may be required to keep the shares going as others in the sector have been weak and this one looks a bit expensive on a PE of 11.6x before any upgrades and they are not far off resistance from their highs last September. Thus I probably wouldn't chase it up here and if you wanted a house builder the higher scoring stocks in the sector on the Compound Income Scores are Bellway (BWY), which is in the Compound Income Scores Portfolio and the lower yielding Inland Homes (INL) if you are not so worried about income.
Meanwhile amongst a flood of other announcements and dividend cuts from BHP Billiton (BLT), Ladbrokes (LAD), and Standard Chartered (STAN) I've seen a 22.6% increase in my dividend from Provident Financial Group (PFG) which was about 2% better than forecast. This non standard lender continues to do well on the back of restructuring their home collected credit business, the acquisition of car loan business Money Barn and growth in their Vanquis bank business which includes a credit card operation too. The shares have however factored much of this growth in as they have doubled in the last two years to their current 3300p or so and now trade on a PE of around 18x with a yield of 4% for the current year on the back of a further 10% growth. Thus they seem fairly fully valued to me although they did trade up to 3600p recently. They are probably a strong hold though for income and growth as they continue to fund their dividend and growth from internally generated capital, including their latest venture into on line loans under the Satsuma brand.
....while HSBC is approaching it's 2009 lows. Looks like it will be a busier week for news flow and it will be interesting to see if last weeks rally fails at the 6000 to 6100 resistance level. Today we have had disappointing and flat looking results from HSBC which they described as broadly satisfactory, but which did included a small 2% increase in the dividend from 50c to 51c for the year.
In approving the dividend increase, the Board noted that prospective dividend growth remained dependent upon the long-term overall profitability of the Group and delivering further release of less efficiently deployed capital. Actions to address these points were core elements of the Investor Update that they provided last June and which they expanded on in the statement.
No doubt we will gets lots of column centimetres on this one but it does look good value with a PE of 6.5x with an 8% yield and a price to book value of around 0.6 to 0.7x which seems fair given the 7.2% return on shareholders equity that they reported in these figures. Thus with the shares down by 4% or so to around 430p on the back of these drab looking numbers this morning they are closing in on their 2009 lows around 400p and as such might be interesting for a brave contrarian value investors down here, but the Compound Income Score is only 18 and Stockopedia only ranks it at 45 which both suggest caution and that there might be better opportunities elsewhere. Talking of which we have also had
final results from XP Power (XPP) the £280m market cap power supply solutions business which I have written up in the past. These came in ahead of recently downgraded forecasts as it seems they had a strong Q4. Therefore earnings came in at 104.3p v 98.8p and 106p currently forecast for this year. On the dividend this came in at 66p v 64.9p forecast and 68.9p for the coming year.
In the statement they said: "While early 2016 has seen economic headwinds strengthen in some of our markets, we consider that the Group remains well positioned, with good momentum established as our design pipeline continues to grow and a healthy order book. We are encouraged by the progress made by the Group during 2015 and look forward to another successful year in 2016.”
So this suggests that the current forecasts could be upgraded but should at least be maintained. So taking the current forecast for this year and this mornings 3% higher price of 1524p this leaves them on a fairish looking PE of 14.4x with a prospective yield of 4.5% which seems fine to me and it scores 90 on the Compound Income Scores and coincidentally the Stockopedia StockRank too.
Well Friday turned out not to be so bad in the end and the rally that started then carried on on Monday for a rise of about 5% from the recent lows. Today however this rally seems to have run out of steam as an initial rise has faded to leave the index largely unchanged. Looking at the technical picture for FTSE in the chart below: