....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.