3 Shares the FTSE 100 Should Beat Today
LONDON -- The FTSE 100 is up further today, gaining 0.22% to reach 6,443 as of 8:30 a.m. EST -- a little behind the intraday 52-week high of 6,461 points set yesterday. A week of generally strong company results has helped boost the FTSE indexes despite a couple of disappointments this morning.
We look at three companies that are falling behind the FTSE today.
Aviva shares crashed 11.5% to 318 pence after the insurer slashed its final dividend by 16 pence to 9 pence per share, as some investors had been fearing, echoing what RSA Insurance did a couple of weeks ago.
The "rebasing" has lowered Aviva's full-year dividend by 27% to 19 pence per share for a yield of 5.2% on yesterday's closing price of 360 pence. With the next interim payout expected to be similarly lowered, the forward yield for 2013 is looking to be around 4.8%. The cut, according to the company, was done in order to retain funds for strengthening risk-provision and reducing debt.
Final results from Balfour Beatty sent the shares down 4.2% to 275 pence this morning. A slight fall in underlying earnings per share and a 2% rise in the full-year dividend to 14.1 pence did not match market expectations, as chief executive Ian Tyler told us of "continuing challenging conditions in the construction markets in the U.K. and USA." Difficulties are set to continue into 2013, though Tyler believes the company is well-positioned for the medium term.
Forecasts for this year suggest a 10% drop in earnings, but that puts the shares on a price-to-earnings ratio of nine, so could the shares be oversold at the moment? That's for you to decide.
Today was results day for Inmarsat as well, and the result was a share price fall of 3.6% to 642 pence. Revenue rose by 6% to $1.3 billion, but pre-tax profit fell 20% to $294 million -- although that was pretty much in line with City expectations. The satellite communications firm lifted its full-year dividend by 10% to $0.44 per share, again as expected.
Looking forward, chief executive Rupert Pearce told us, "Significant technical and commercial progress with our Global Xpress program means we expect to begin network deployment in 2013 as planned."
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