5 Dates for Your October Diaries
LONDON -- The FTSE 100 has been held back in September by worsening economic conditions in Spain and rising unrest both there and in Greece as austerity measures start to bite. But underlying U.K. company performance in many cases seems to be strengthening. And while we have a relatively quiet October from a company news point of view, there are certainly some worth watching out for during the month.
High-street strength -- Oct. 11
WH Smith (ISE: SMWH.L) is one of those rare beasts -- a high-street business whose performance has held up well during the recession. In fact, earnings and dividends have been rising steadily, and the share price has more than doubled to 638 pence from a 2008 low of 295 pence. And part of that has been due to a recent surge that has seen the price gain 35% from around 470 pence in June.
But even after all that, full-year forecasts put the shares on a modest price-to-earnings ratio of 10.4 and a dividend yield of 4.2%, changing to 9.4 and 4.7%, respectively, in 2013. Those results will be out on Oct. 11. A pre-close update in August told us that the firm expected its performance to hit the top end of then-current forecasts.
Stopping the slide -- Oct. 24
Home Retail Group (ISE: HOME.L) , the troubled owner of Argos and Homebase, is due to release interim results on Oct. 24. It's been through the wars over the past couple of years: No sooner had it managed to put a stop to the slide at Argos than bad weather hit Homebase sales, which were down 6.2% at the time of the firm's Q2 statement on Sept. 13.
The shares have slipped by about 20% over the past 12 months to 90 pence and are way down on their 4 pound levels of 2008. But even after that, they don't look cheap by traditional measures: They're on a P/E of more than 15, with a fairly modest dividend of 3.5% expected. The current glitch at Homebase was beyond the firm's control, but we really should want to see, over the next six months, that the rot has been halted and that there's been an evident upswing in business.
Department store progress -- Oct. 25
While other high-street retail shares have floundered, department store Debenhams shares have soared by 75% over the past 12 months to 102 pence -- yet they're still only on a P/E of 11, which seems modest. Mind you, the shares did slide from around 1 pound in 2009 to a low last year of 51 pence, so what we've seen is a recovery -- but it's a better recovery than many others have managed.
On Oct. 25, the company will present us with its full-year results, and according to the recent trading statement, we should be seeing "strong like-for-like sales growth," with pre-tax profit ahead of last year and in line with forecasts. Debenhams is also reducing debt and buying back shares, so we should look for further details on those when we get the figures.
Important third quarters -- Oct. 25
Oct. 25 is also a big day for third-quarter updates. There are others the same week, but I've picked this day to watch because we will be hearing from both AstraZeneca (ISE: AZN.L) and Unilever (ISE: ULVR.L) , both of which are key components of many a long-term portfolio.
AstraZeneca shares have had a rocky ride this year, slumping from January but then picking up again from June to stand today at about 29.60 pounds. Earnings are expected to fall this year, but there's a dividend yield of 6% forecast from the shares on a P/E of eight. What's needed is for confidence in the firm's research pipeline to return, so any news along those lines will be welcome.
Unilever, meanwhile, has climbed nearly 15% over the past 12 months to 22.70 pounds and is currently on quite a high valuation, with a forward P/E of 18 for the year-end. It's often bought as a safe long-term share, but it could be going through an overvalued phase right now.
Puffing away -- Oct. 30
Smoking might be a mug's game, but investing in Imperial Tobacco (ISE: IMT.L) certainly hasn't been. Since 2009, the shares have risen from 14 pounds to today's 23 pounds for a 64% gain, and that's been topped up with nice dividends -- although the price has been higher, at 26 pounds, as recently as July.
Oct. 30 is expected to bring us more of the same when the company releases its latest full-year results. We already know from last week's trading statement that things are in line with expectations and that total revenue will be up around 4%. We should see a dividend of around 4.5%, and that's expected to rise to 4.9% next year. At 11.5, the P/E looks undemanding, so the fall from this year's peak share price might well be a buying opportunity.
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