5 Shares for the Week Ahead
LONDON -- It's a relatively quiet week next week as far as the volume of company news goes, but what we do have coming is big stuff, as a handful of FTSE 100 stalwarts tell us how they're doing.
The one big set of full-time results next week comes from Imperial Tobacco (ISE: IMT.L) on Tuesday -- and what an investment it has been. The share price has multiplied two and a half times over the past decade to reach 2,330 pence. But that was interrupted by a slump during the global recession and a recovery that hasn't quite regained pre-crash levels.
To compensate for that volatility, Imperial Tobacco has been paying a steady dividend of around the 4% mark. For the year ended September, the City has forecast a payout of around 4.6%, rising to 5% on 2013 forecasts. What are the chances of that coming good?
They look high, as September's trading update told us that performance is "in line with the Board's expectations," with net revenues expected to be up around 4%. Over the long term, you'd be much better off buying the shares than the cigarettes.
Thursday will bring us a first-half update from BT Group (ISE: BT-A.L) . The shares, having collapsed between 2007 and 2009, have been on a sustained recovery since, rising more than 15% in the last 12 months to reach 217 pence today -- and comfortably beating the FTSE in the process. But the past month has seen a bit of a downturn, so what is the market expecting?
Well, first-quarter figures were good, showing an 8% rise in pre-tax profit and, in the words of the chief executive, "the 11th consecutive quarter of double-digit earnings per share growth."
Current forecasts suggest a full-year dividend of 4.5%, which is pretty strong, even if not up with the 7% that Vodafone is offering. And though earnings per share should fall this year, there's a significant rise expected next year.
On Wednesday, we should have a third-quarter update from pharmaceuticals giant GlaxoSmithKline (ISE: GSK.L) , and as it's a constituent of the Fool's Beginners Portfolio, I'm keenly awaiting that myself. With the blockbuster drugs model losing its steam, and competition increasing from generic substitutes, this year's performance is expected to be pretty much in line with 2011.
But there are dividends of around 5% forecast on the 1,410 pence shares, and for me Glaxo's more successful expansion into new medical technologies puts it ahead of rival AstraZeneca.
GlaxoSmithKline is a favorite of top UK investor Neil Woodford, who manages to beat the FTSE year after year, and his choices are well worth taking a look at.
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British Sky Broadcasting (ISE: BSY.L) will release Q1 results on Thursday, on the same day as its AGM. The shares have had a good run since early 2009, but have fallen back since their peak in mid-2001 to today's 718 pence.
This is another company that pays decent dividends, albeit lower than some, around the 3.5% mark. BSkyB also has a good record of rising earnings, and there are forecasts for further growth in the next two years.
The last full year brought the company a 14% rise in adjusted operating profit, and there is still a share buyback program in operation, so we have plenty to look for in this quarterly update.
My last one for next week is a third-quarter update from Royal Dutch Shell (ISE: RDSB.L) , which is also due on Thursday.
The share price has been disappointing this year, falling nearly 7% over the past 12 months to 2,178 pence. But this is another company with a strong dividend forecast, with 5% penciled in for the year to December and a slight increase expected next year -- and the payouts should be well covered by earnings. In fact, on 2012 forecasts, the shares are on a price-to-earnings ratio of only a little over 8.
As fellow Fool writer Stuart Watson discovered recently, Shell's accounting for underlying figures and exceptional costs, and its valuation of assets, is pretty conservative compared with many companies. That says good things to me about the trustworthiness of its reporting.
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The article 5 Shares for the Week Ahead originally appeared on Fool.com.Alan Oscroft does not own shares of any company mentioned in this article. The Motley Fool has a disclosure policy.
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