November 15th, 2011
Company and dividend updates
The last few months a number of companies, which we are following, have announced third quarter results, such as:
Aviva commented on a strong operating performance for the nine months to 30 September in exceptionally volatile markets and state that they remain on track to meet their financial targets for this year.
The “combined ratio” improved to 96%. This is a measure in the insurance industry of claims to premiums. Anything under 100% means a profit is being made on the insurance side. Net asset value improved to 448p from 425p at 30 June and they have strengthened their hedging against euro currency.
Due to the troubles in Euroland, the stock market hasn’t liked Aviva for a long time. The 2011 dividend forecast is 26.9p with even more anticipated for 2012.
AstraZeneca published third quarter results altthough it is not a quarterly dividend payer. The company account in US dollars and for the nine months revenue was up 1% whilst core earnings per share (eps) were up 7%. The dividend forecast for 2011 is 172.4p, plus a higher payout anticipated for 2012.
Astra has embarked on a massive share buyback this year. It proudly proclaims that it already has spend some $3.9bn on this in the nine months, with a target of $5bn for the full year.
AstraZeneca is one of the very few big companies to have no net debt – with a net cash position of about $1.7bn at 30 September. That’s well down from the net cash figure at the start of the year on 1 January.
British American Tobacco
While not a quarterly dividend payer BATS, revealed third quarter figures showing organic revenue growth of 7% at constant exchange rates. The company commented that they are on track for another year of good earnings growth.
BATS increased market share across their top 40 markets though volumes were slightly lower as a result of an overall volume decline in the tobacco industry. The Group is another buyback player, though compared with some other companies it is a minor player ‘just’ £622m in the nine months. BATS is a company with net debt too so in effect they were borrowing to facilitate buybacks, and that’s the situation with most companies.
The 2011 dividend forecast is 127.1p. The share has an excellent dividend growth history, more than doubling in the years from 2006 to 2010. A higher dividend payment is expected for 2012.
Dividend Income Investor.com has launched Dividend Value Profiles, like the one we prepared for British American Tobacco which you can access Here.
GSK issued its third quarter report. The quarterly dividend will be 17p, going xd on 02 November and payable on 05 January 2012. That’s up 6.2% from the previous quarter’s 16p. For the nine months the payout is 49p, up 6.5% from last year’s 46p. The 2011 consensus dividend forecast is 68.9p
Net operating cash inflow was £5.4bn. GSK has allocated £2.3bn for share buybacks for the full year.
HSBC announced a third quarter dividend amounting to US 9.00¢ going xd on 23 November and payable on 18 January 2012.
HSBC’s dividend payment pattern is to pay the first three quarters in the same amount with the fourth quarter to be decided on the annual results. Thus the total so far this year is 27.00¢ and that compares favourably with last year’s comparative of 24.00¢, up an inflation beating 12.5% though in sterling the figure will differ.
Pearson - the world’s leading learning company - issued a nine month management statement with increases in both sales and profits. Things look good and with all of their businesses performing well, they now expect to achieve adjusted eps of about 83p for the full year against previous guidance of about 80p. 2011 dividend forecast is 41.5p with more seen for 2012.
Royal Dutch Shell B
Royal Dutch Shell reported on its third quarter and is a quarterly dividend payer. The dividend will be US 42¢ and its sterling value will be announced on 25 November. The dollar dividend figure has been unchanged for the last 11 quarters since it went up from 40¢ to 42¢ in the first quarter of 2009.
On a current cost basis, third quarter basic eps were up 104% on the comparative. Current cost basis is an accounting term meaning that the present oil price is taken into account when calculating stock, rather than its original cost. Thus if the price has risen over cost, a paper profit is created and a loss if it has fallen. Because the oil price is volatile, oil companies like to show current cost figures as being more realistic to their situation.
Shell B (ticker RDSB) dividend forecast for 2011 is 105.5p - a higher payout is suggested for 2012.
Standard Life issued a nine month report commenting that they have performed well in the period, the outlook is positive and they are confident of future growth opportunities. The 2011 dividend forecast is 13.7p
Direct exposure to the sovereign and bank debt of Greece, Ireland, Italy, Portugal and Spain is apparently less than £50m.
Unilever, the world-wide operating manufacturer of a very wide range of food and household products, revealed higher sales for the nine months in all categories, driven by those in emerging markets which now represent 53% of turnover.
The Group expects operating margin for 2011 to be flat or down slightly as they seek to contain commodity price inflation by constraining price rises to their consumers.
Unilever accounts in Euros and the payout in that currency is 22.50 eurocents which is 8.2% up on the comparative 20.8 figure. Third quarter dividend of 19.24p going xd on 09 November and payable on 14 December.
For the nine months the dividends total 58.82p, up 10.0% on the 53.49p for last year and well ahead of inflation. In Euros, the total was 67.50 cents, up 8.2% up on last year.
And finally . . .
Vodafone published half year figures to 30 September. The dividend will be 3.05p going xd on 16 November and payable on 03 February 2012. In addition there is a special dividend of 4.0p with the same dates, making a total of 7.05p.
The normal dividend is 7.0% up on last year’s interim of 2.85p and this is in line with the company’s stated objective of increasing payouts by at least 7% per annum up to their year ended 31/03/2013.
Against a small increase in revenue, eps was down 8.7%. There is better news on the net debt which at £26.2bn was down from £29.9bn at 31 March. Gearing has also reduced, down to a reasonable 31.3% from 34.1%.
Vodafone commented on making clear progress with market share gained in most markets, together with realising value by disposals of non-controlled assets. A dividend from part-owned Verizon Wireless enabled the payment of a special dividend to Vodafone shareholders.
Until next time.
Early Retirement Investor.com
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