3 FTSE Shares for the Week Ahead
LONDON -- After a busy month or so for company reports, we're heading into a quiet patch over the next few weeks as the end-of-March reporting season draws to a close. There won't be a lot to keep us alert next week, but we will have a small handful of important updates.
Here we take a quick look at two FTSE 100 companies and one from the FTSE 250 that are bringing us news in the coming week.
We're expecting a third-quarter update from Wolseley on Tuesday, and if things are still going as they were at the halfway stage, announced in March, investors will probably be pleased -- though with the share price up nearly 50% over the past 12 months to 3,353 pence, they're probably already quite happy.
Like-for-like revenue at the plumbing, heating, and building products supplier was up 2.2% for the six months to Jan. 31, and with margins improving, the firm managed to convert that to a 7.6% rise in trading profit and a 3.9% rise in headline earnings per share. The interim dividend was lifted by 10% to 22 pence per share. Net debt was up to £871 million from £470 million at the same stage the previous year, but against revenue of £6.3 billion, that's not a massive sum.
For the full year, analysts are expecting to see a 7% rise in EPS, putting the shares on a forward price-to-earnings ratio of 18.5, which doesn't seem obviously cheap. If the interim dividend rise is repeated, we should see 66 pence per share for a yield of 2%.
Shares in Johnson Matthey, the specialist metals and chemicals producer, have been flat for much of the past 12 months. But the price has picked up since the beginning of April, and at 2,605 pence it is now about 15% up from a year ago. Some of that gain will have been in anticipation of full-year results, which we should have next Thursday.
January's third-quarter update told us that market conditions were continuing to be difficult, but the firm said its underlying performance was steady and should continue into the second half, reiterating the guidance published in its first-half report.
So we should probably expect a small fall in pre-tax profit, but EPS will most likely be close to last year's. The interim dividend was raised by 3.3% to 15.5 pence, and the same for the final dividend would give us a total of about 57 pence per share for a yield of 2.2%.
To complete our trio, we'll be getting full-year figures from KCOM Group on Friday. The telecom firm's share price has had an erratic 12 months, falling at the end of 2012 and then rising steadily again to 86 pence today for an overall increase of more than 25%.
After a couple of years of rising earnings, forecasts suggest that this year and the next two will be pretty flat, with the shares on a P/E of 11.6. That doesn't seem too stretching against a FTSE average of 14, especially as there is a dividend yield tentatively forecast in excess of 5%.
At the time of KCOM's preclose update on April 4, things were going "in line with market expectations," so there should be little surprise on that front. But the firm also confirmed that it will update us on its future dividend policy. At the interim stage, KCOM confirmed its commitment to a minimum 10% rise this year.
Finally, dividends can add nicely to your investment returns -- they can be spent or reinvested, according to your needs. Whether you're investing for income or growth, good old cash is always welcome. And that's why I recommend the brand-new Fool report "The Motley Fool's Top Income Share For 2013," in which our top analysts identify a share they believe will provide handsome dividend income for years to come. But it will only be available for a limited period, so click here to get your copy today.
The article 3 FTSE Shares for the Week Ahead originally appeared on Fool.com.
Alan Oscroft has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.