November 6th, 2012
AstraZeneca's Results Down - Dividend Safe?
GSK's Results Down - Dividends Up
Dividend Up - But Has BP Turned The Corner?
Shell Profits Fall 15% - Dividends Up
Unilever Results - Dividends Up
It has been a very busy few weeks, with Dividend Income Investor.com exhibiting at the London Investor Show, while, a week later, I also visited a two day event – the London Money Show.
It was great to meet a number of our Dividend Alerts and Dividend Income Investor.com subscribers. I always say, it’s good to talk! And, of course, also a warm welcome to our new subscribers.
During the last few weeks several dividend paying companies have released third quarter results, and, in some cases third quarter dividends, which we report on below.
AstraZeneca versus GSK
Both GSK and AstraZeneca announced their quarterly results. Currently, UK’s pharma majors provide dividend yields of between 5 percent and 6 percent. I have extensively reported on both GSK's third quarter results, which you can access Here and AstraZeneca's which you can access Here.
Though AstraZeneca is not a quarterly dividend payer, it still reported on its third quarter to 30 September. Worryingly, revenue declined further following the loss of exclusivity on several brands which took its toll on profits – resulting in a 14 percent fall in core earnings per share for the nine months.
On a more positive note, on his first day in the job, the new CEO announced that AstraZeneca’s share buybacks have now been suspended. Not a moment too soon I would say as net cash flow has turned into net debt of US$3.8bn compared with net cash of $2.8bn at the start of the year.
Click Here for our take on AstraZeneca’s results and its dividend prospects
Together with its third quarter results, GSK also announced a review of its European operations as sales fell 8 percent in the third quarter. Continued pressure on drug prices in Europe, together with lower demand for vaccines hit overall sales at the group.
The group is expecting fourth quarter sales to pick up, but full year sales are now expected to be flat year-on-year, and that is assuming there is no further deterioration in Europe.
The dividend was up a penny, at 18 pence - going ex-dividend on 14 November and payable on 3 January 2013 - an improvement on last year's third quarter pay-out of 17 pence.
Click Here for more information on GSK’s results and dividend prospects.
BP versus Royal Dutch Shell
Last week, both BP and Royal Dutch Shell announced their third quarterly result. Both reported that results were boosted by higher refining margins, which are unlikely to continue into the fourth quarter.
Worryingly, for the first nine months of 2012 BP’s production was down by 5.3 percent on 2011, while Shell has managed a 1 per cent increase in production so far in 2012. Both provide dividend yields of between 4 percent and 5 percent.
I have extensively reported on BP's recent results, which you can access
Here, and Shell's results which you can access Here.
BP raised its quarterly dividend to US$0.09, going ex-dividend on 7 November and will be paid on 21 December. The sterling value will be announced on 10 December.
Last year’s third quarter dividend was US$0.07 so you could say a massive improvement of 28.6 per cent on that whilst the last three quarters were all US$0.08 for a rise of 12.5 percent on those. While this is great, please be aware that we are still a long way off those great dividend payments pre the Gulf of Mexico disaster when BP was paying US$0.14 per quarter.
Early next year, I think we can also expect much fireworks (and, potentially bad publicity) when BP's Gulf of Mexico disaster court case starts.
Click Here for more information on BP’s third quarter results and dividend prospects.
Royal Dutch Shell
Shell’s quarterly dividend has been increased by a minuscule US$0.01 to US$43 which will be paid on December 20. The shares trade without entitlement to this payment from November 14.
The group’s underlying net profit fell 6 percent but still came in ahead of investor expectations thanks to the strength in refining margins – a one-time reprieve, though(!) – while Shell’s Nigerian problems continue unabated. Shell was also forced to write down its US natural gas assets, due to weak prices in the local gas markets, though not as much as many commentators had feared.
Click Here for more information on Shell’s third quarter results and dividend prospects.
Unilever’s third quarter sales showed underlying growth of 6.6 percent with emerging markets up 11.7 percent. For the full year, they remain confident to deliver a modest improvement in core operating margin.
The dividend remains the same in Euro terms that is, the dividend will be €24.3¢. In sterling this becomes 19.77 pence going ex-dividend on 0 November and is payable on 12 December.
In Euros this is up 8.0% from the 22.5¢ paid for Q3 last year. At the time, that converted to just 19.24 pence due to the weakening of the euro over the twelve months.
Are BP’s shares historically overvalued at these levels
With the release of third quarter results we have added BP to our dividend valuation and financial strength databases at Dividend Income Investor.com to provide our subscribers with information when and whether BP is historically undervalued or overvalued, or, is trading somewhere ‘in-between’.
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