3 Shares for the Week Ahead
LONDON -- We have a fairly quiet week ahead of us for FTSE 100 news, but we do have a few key updates from the kind of companies that form the heart of many a long-term portfolio. And we have results from a very successful fund manager, whom many of us emulate.
Here's what to look out for.
Aberdeen Asset Management (ISE: ADN.L)
It's full-year results time for FTSE 100 investment manager Aberdeen Asset Management on Monday, and what a year it's been! The share price has stormed up over the past 12 months, and at 338 pence it's bobbing around a 10-year high. Aberdeen's success has been due to its expertise in emerging markets, but the firm has also been diversifying by acquisition, including RBS Asset Management in 2010, as well as up other Europe-based fund managers.
Dividend-wise, Aberdeen has been paying a yield of around 4.5% to 5% in the last few years, but that drops to 3.7% on forecasts for September 2013, largely because of the rise in the share price. How will the results look? In its pre-close statement, Aberdeen told us that assets under management had reached 184.3 billion pounds by August, and over the preceding two months there had been new business flows of 6.1 billion pounds.
United Utilities (ISE: UU.L)
Utilities companies are often considered good cash cows to stash away in an income portfolio, as they pay a very large proportion of their earnings as dividends. United Utilities, which is due to report on its first-half performance on Wednesday, is one that has been offering a steady dividend yield of around 5% to 6.5%. With the shares currently priced around 670 pence, current forecasts suggest a yield for the year ending March 2013 of 5.3%, rising to 5.6% the following year.
And if that kind of income isn't enough, the share price has done pretty well over the past couple of years, too, putting on more than 50% since late 2009. So what will Wednesday bring? According to September's trading update, "trading is in line with the group's expectations of delivering a good underlying financial performance for 2012/13."
Severn Trent will release interim figures on Tuesday.
Pennon (ISE: PNN.L)
Still on the utilities front, Pennon Group, which owns South West Water in addition to being in the waste management business via its Viridor division, will report its interim figures on Thursday. Pennon has been paying decent dividends, too, but they haven't been as high as the pure utilities', with yields of about 4% mark over the past few years. On the current share price of around 605 pence, City analysts are forecasting a dividend yield for March 2013 of 4.7%, rising to 5.1% in 2014.
But unlike United Utilities, Pennon's share price has taken a rather large tumble after the firm issued a profit warning last week. Apparently due to weakening prices for recyclate products, Pennon now says the performance of Viridor will be "somewhat below the bottom of the current range of market expectations". Group pre-tax profit is expected to be about 111 million pounds, which is up about 3% on last year.
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