Tag Archives: GKN

News, Politics, Government

London shares steady, consolidating gains

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London shares closed flat on Friday as higher inflation data in the US restrained confidence after Thursday’s strong rise, dealers said.

The benchmark FTSE 100 index shed gains posted earlier in the day to close just 1.53 points or 0.02 percent higher at 6,544.94 points.

US producer prices rose more than expected in June, the second straight month of increases led by higher energy costs, government data released Friday showed.

The Labor Department said its producer price index rose 0.8 percent in June. The PPI index had climbed 0.5 percent in May after two months of declines.

“Global markets continued to trade flatly today as investors opted to cash in on recent highs. In addition, with the low volumes observed within the markets today it also seems investors are starting their weekend a little early,” said Shavaz Dhalla, a financial trader at Spreadex.

“It seems the markets will need a lot more to dislodge the faith investors seem to have towards equities at the moment. Investors could enjoy this weekend and wake up to the start of the European reporting season with an optimistic mind-set,” Dhalla said.

Fund manager Resolution led the London gainers, climbing 3.41 percent to 318.50 pence, while microchip specialist Arm Holdings added 3.22 percent to 897 pence.

Broadcaster ITV put on 2.53 percent to 157.90 pence and engineer GKN rose 2.51 percent to 334.90 pence.

Miners were weak, shedding much of Thursday’s gains sparked by rises on metals markets. Fresnillo fell 3.63 percent to 981 pence and Anglo American lost 3.18 pence to 1,294.50 pence.

Biggest faller was household products group Reckitt Benckiser, down 5.11 percent at 4,677 pence.

On the currency markets, sterling was steady at $1.5107 at 5:22 pm versus $1.5118 on Thursday evening but weakened once more against the single European currency, easing to 1.1581 euros from 1.1601 euros the previous night.

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Source: FULL ARTICLE at Fox World News

Business, Finance, Occupation & Industry

3 Blue Chip Bargains: Royal Dutch Shell, GKN, and RSA Insurance Group

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By David O’Hara, The Motley Fool

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LONDON —

Royal Dutch Shell
Shares in super-major Royal Dutch Shell  are down 1.4% so far this year. The shares have actually declined 5.4% in the last month alone.

In the last month, oil prices have fallen almost 5%. There are three reasons for this, all related to demand for the product.

First, the shale gas boom in the U.S. has delivered a plentiful alternative source of energy. Second, fears of global economic stagnation have inspired futures traders to start selling oil contracts. Third, a report last week confirmed that U.S. oil inventories reached highs not seen in over 20 years.

Analysts expect that Shell will pay $1.84 in dividends for 2013 and make $4.14 per share of profits. That’s a prospective yield of 5.7% and a price-to-earnings (P/E) ratio of just 7.9.

GKN
Shares in GKN  have lost 10.4% in the last month. As things stand today, GKN is trading on a historic P/E of 8.1, with a forecast dividend of 3.2%.

As a big supplier of automotive parts and engineering services, GKN‘s fortunes are linked to the notoriously cyclical automotive industry. Cyclical stocks have less earnings visibility than most. The result is that they usually trade at a discount to the market.

As more people move into car ownership in countries such as India and China, any industry downturn will likely be less severe than has been suffered in the past. I would be a buyer of GKN today if the yield was higher.

RSA Insurance
Shares in RSA Insurance  have not been as low as this since November 2012. Since the company announced a dividend cut with its final results, investors have lost 30% of the market value of their holding.

Though recent times have been rough for RSA shareholders, the current share price looks attractive for new entrants.

The fact that RSA has already cut its dividend makes another cut less likely in the short term. I estimate that the payout for 2013 will be around 6.2 pence per share. That’s a yield of around 5.6% at today’s price. Analysts expect 12.4 pence per share of profits for the year, putting the shares on a P/E of 8.8 times forecasts.

Though RSA now offers a large, well-protected yield, our analysts here at the The Motley Fool believe that they have found an even better dividend share for 2013. To help you benefit from their detailed analysis, they have prepared a special free report “The Motley Fool’s Top Income Share for 2013.” To get the lowdown on this opportunity, click here and get your totally free copy of the report today.

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The article 3 Blue Chip Bargains: Royal Dutch Shell, GKN, and RSA Insurance Group originally appeared on Fool.com.


David O’Hara does not own shares in any of the above companies. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 FTSE Shares Going Ex-Dividend Next Week

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By Alan Oscroft, The Motley Fool

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LONDON — After the Easter break, we have an increase in the number of companies going ex-dividend next week. Whether you want to buy in time to be eligible for a company’s dividend payment or you’re looking for a bargain share price when the time has passed, you should mark your diaries.

The FTSE 100‘s current average dividend yield is about 3.1%, and next week’s companies offer quite a spread around that. Here are three of those companies going ex-dividend in the week commencing April 8:

IMI
Industrial engineer IMI is set to go ex-dividend next Wednesday with respect to its final dividend of 20.7 pence per share. The payment, announced with preliminary results on March 7, takes the firm’s total dividend for the year to 32.5 pence per share. That’s a rise of 8% over the previous year and represents a yield of 2.5% on the current share price of 1,308 pence.

If you had bought the shares a year ago, in addition to that modest payout you would also have enjoyed a share price rise of about 30%.

GKN
Car and plane parts maker GKN has its ex-dividend day next Wednesday, too, and again it’s a final dividend. This time it’s a payment of 4.8 pence per share, making up a very nice 20% rise in the full-year payment to 7.2 pence per share. That was made possible by a 19% rise in pre-tax profit for the year to December 2012.

At the current share price of 272 pence, this annual reward corresponds to a yield of 2.6% — and just like IMI‘s, the shares are up about 30% over the past 12 months.

Amlin
Our third ex-dividend share for next Wednesday is insurer Amlin, which will be paying a final dividend of 16.5 pence per share. Announced on March 4, that will add to an interim dividend to provide a full-year payment of 24 pence per share. That’s the smallest rise of the three, up just 4.3%, but it provides the biggest yield — 5.6% on today’s share price of 431 pence.

Amlin had a tough year in 2011 and turned in a loss of 194 million pounds, largely due to claims arising from Hurricane Sandy, but in 2012 it turned that round into a pre-tax profit of 264 million pounds.

Dividends like these 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 Going Ex-Dividend Next Week originally appeared …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Is GKN the Ultimate Retirement Share?

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By Roland Head, The Motley Fool

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The last five years have been tough for those in retirement. Portfolio valuations have been hammered and annuity rates have plunged. There’s no sign of things improving anytime soon, either, as the eurozone and the UK economy look set to muddle through at best for some years to come.

A great way of protecting yourself from the downturn, however, is by building your retirement fund with shares of large, well-run companies that should grow their earnings steadily over the coming decades. Over time, such investments ought to result in rising dividends and inflation-beating capital growth.

In this series, I’m tracking down the UK large-caps that have the potential to beat the FTSE 100 over the long term and support a lower-risk income-generating retirement fund (you can see the companies I’ve covered so far on this page).

Today, I’m going to take a look at automotive and aviation engineering group GKN  .

GKN vs. FTSE 100
Let’s start with a look at how GKN has performed against the FTSE 100 over the last 10 years:

Total Returns 2008 2009 2010 2011 2012 10 yr trailing avg
GKN -62.3% 20.6% 91.2% -15.2% 28.5% 8.2%
FTSE 100 -28.3% 27.3% 12.6% -2.2% 10% 10.5%

Source: Morningstar. Total return includes both changes to the share price and reinvested dividends. These two ingredients combined are what make it possible for equity portfolios to regularly outperform cash and bonds over the long term.

GKN‘s 10-year average trailing total return shows that over the last decade, its performance has lagged behind that of the FTSE 100 slightly, but not necessarily enough to prevent it being a good retirement share.

What’s the score?
To help me pinpoint suitable investments, I like to score companies on key financial metrics that highlight the characteristics I look for in a retirement share. Let’s see how GKN shapes up:

Item Value
Year founded 1900
Market cap £4.6bn
Net debt £871m
Dividend Yield 2.6%
5 year average financials
Operating margin 5.2%
Interest cover 6.1x
EPS growth 9.9%
Dividend growth -4.6%
Dividend cover 4.0x

Here’s how I’ve scored GKN on each of these criteria:

Criteria Comment Score
Longevity It’s been around for more than a century. 5/5
Performance vs. FTSE Fair to middling. 3/5
Financial strength Good at present, but inconsistent historically. 3/5
EPS growth Recent performance has been good. 3/5
Dividend growth Cuts feature too heavily in GKN‘s dividend history. 2/5
Total: 16/25

One of the key attributes of a retirement share is a reliable, consistent dividend history, with increases that are broadly in line with inflation. After all, you may need this income for decades. Achieving this ideal isn’t always possible, but I’m pretty certain that you should be able to find a better source of income than GKN, which has made major cuts to its dividend twice in the last twelve years, in 2001/2 and 2008/9. GKN‘s current dividend remains lower than it was before both of these sets of cuts.

On the other hand, GKN seems to have reinvented and improved itself since 2008. Its financial strength has improved, debt has been paid down, dividend and interest cover has risen, and last year’s acquisition of Volvo Aero — which makes …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

The Beginners' Portfolio Ponders Buying an Insurer

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By Alan Oscroft, The Motley Fool

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LONDON — This article is the latest in a series that aims to help novice investors with the stock market. To enjoy past articles in the series, please visit our full archive.

A lot of investors go for diversification, and it can make a lot of sense; if one sector goes through a bad patch, being diversified into others can help offset the pain. But at the same time, diversifying for the sake of it can be a bad move.

But there’s one sector that is very much in the throes of a recovery, and that’s finance — and we haven’t considered it so far. But what possibilities are there? Well, I’ve been eyeing up a couple of giants in the insurance sector, which really hasn’t been showing much in the way of gains yet…

Aviva
Aviva   has results coming out on Thursday, and the City is currently expecting a dividend yield of 7.3% for the year to December 2012 based on the current share price of 349 pence. But earnings forecasts are all over the place, with individual analysts guessing at wildly different figures, so it’s anybody’s guess whether such a payout would be covered.

Asset valuations are pretty important as well, so I’ve added two more figures to our table below, with entries just for the two insurers. NAV is net asset value per share — the book value of all the company’s assets divided by the number of shares in issue. PBV, or price to book value, is the share price divided by the NAV.

From this, we can see that Aviva shares trade for less than their net asset value, which is a good sign, but we’ll need to watch out for that come results time.

RSA
The other is RSA Insurance Group , whose shares shares trade in excess of asset value at the moment — not outrageously so, but RSA is in second place to Aviva on that measure.

RSA has already brought us full-year results — and slashed its final dividend by a third! And the share price slumped by 15% in response. But the overall full-year yield is still a nice 5.8%, based on today’s price of 120p.

The fear, or course, is that Aviva will follow suit and cut its dividend, and the current share price does seem to factor in some of that possibility. We’ll know later this week.

Meanwhile, here’s our updated watchlist, with the two new entries — and I’ve sorted it into alphabetical order this time:

Company Market Cap Price Forward P/E NAV PBV Forward Dividend
Aviva £10.5 bn 349p 8.2 442p 0.8 7.3%
Daisy Group £286m 105p 8.1     1.3%
GKN £4.40bn 276p 10.0     3%
Ricardo £204m 401p 11.9     3.4%
RSA £4.29bn 120p 9.5 108p 1.1 6.2%
Trinity Mirror £292m 118p 3.9     0%
TUI Travel £3.55bn 310p 11.5     4%
Unilever £34.1bn 2,664p 18.7     3.2%
United Utilities £5.04bn 745p 18.3     4.6%
WS Atkins £892m 870p 11.4     3.5%

Since our last look in January, quite a few have moved — mostly upward!

What of the rest?
Out of the list, I’ve definitely lost interest in Unilever , with the shares having risen 9.7% since we last looked. On a forward price-to-earnings (P/E) ratio of nearly 19 now, it seems fully valued to me. And that 3.2% dividend is nothing to shout about, so I can only …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 FTSE Shares Hitting New Highs

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By Alan Oscroft, The Motley Fool

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LONDON — The FTSE 100 is looking a bit more positive today following a number of upbeat company results, climbing 0.81% to 6,397 points by 7:40 a.m. EST. The index of top U.K. shares has even peeked above the 6,400 level today, so its 52-week high of 6,412 is under threat again.

But what of individual companies setting new share-price records? Here are three doing just that today.

WPP
Shares in WPP reached a 52-week record of 1,091 pence this morning, following on from last week’s record results. Despite economic difficulties in the U.S., Europe, and China, the advertising giant enjoyed a 3.5% rise in revenue after other regions, including the Middle East, proved robust.

WPP shares are now up more than 30% over the past 12 months and have more than three-bagged since early 2009. But at 13.6, the firm’s forward price-to-earnings ratio is still only around the FTSE‘s long-term average. Forecasts for 2013 suggest modest earnings growth with a 3% dividend.

GKN
GKN shares have made a similar gain over the past year, also putting on more than 30% to reach a new 52-week high today of 286 pence. And again, the latest boost came from strong results last week. The automotive and aerospace parts maker reported sales up 13%, adjusted pre-tax profit up 19%, and earnings per share up 17%. The dividend was raised by 20%.

And GKN shares might still be a bargain, with forecasts for this year putting them on a P/E of only 10, dropping to nine for 2014, with dividends of 3% and 3.4%, respectively.

ASOS
Shares in online fashion retailer ASOS are flying again, reaching an all-time record of 29.15 pounds today — easily beating the 24 pound levels the shares were at in mid-2011 before the wheels temporarily came off.

International expansion has been going well, and ASOS looks set to dominate the world of online clothing sales. But after such a meteoric price rise, the shares are now on a forward P/E of nearly 60, so there will have to be a further quadrupling in earnings to bring that down around the FTSE average.

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 Hitting New Highs originally appeared on Fool.com.

Alan does not own any shares mentioned in this article.
The Motley Fool has a disclosure policy.
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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

FTSE Shares That Soared and Plunged This Week

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By Alan Oscroft, The Motley Fool

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LONDON — It was an erratic week for the FTSE 100 , as it slumped by 85 points on Tuesday after a strong anti-austerity vote in the Italian election raised fresh eurozone fears. But the index of top U.K. stocks recovered to end the week 43 points up at 6,379 — still a little short of its Feb. 20 record of 6,412 points. Here are four FTSE 100 stocks that moved significantly during the week.

Weir Group Weir Group stock gained 203 pence (9.4%) to 2,359 pence, in the week the engineering services company reported a 12% rise in full-year pre-tax profit to 443 million pounds. That came from an 11% rise in revenue to 2.54 billion pounds. Earnings per share gained 12% to 150 pence, enabling a 15% boost to the full-year dividend to 38 pence. That’s a yield of only 1.7%, but it’s heading in the right direction as the company targets double-digit dividend growth each year.

ARM Holdings
Chip designer ARM Holdings saw its price surge again this week, reaching a 52-week high of 970.5 pence on Friday before closing the week on 965.5 pence. The stock is up 41.4 pence since the previous Friday, for a 4.5% gain — and it’s up around 70% over the past 12 months. But what of valuation? Forecasts for the year ending December 2013 put the stock on a P/E of over 50, which is well above the current FTSE 100 average of about 16, and there’s only a tiny dividend expected. But earnings are expected to grow more than 25% per year for the next two years, and who can say where that will end?

GKN
Automobile and airplane parts maker GKN released results on Tuesday, and better-than-expected profits enabled it to lift its 2012 dividend by 20% to 7.2 pence. Sales rose by 13% to 6.9 billion pounds, with adjusted pre-tax profit up 19% to 497 million pounds and earnings per share up 17% to 26.5 pence. Forecasts suggest a flat year for earnings in 2013, but the stock is on an undemanding-looking P/E of 10. The result? A 17.3 pence (6.9%) price rise on the week to 269.4 pence.

Kazakhmys
Kazakhmys, the copper miner with interests in Kazakhstan, lost 29.8 pence (8.2%) to 334.9 pence after the market reacted poorly to its full-year trading update. With copper prices having declined 10% during 2012 and the company facing higher production costs, full-year revenue fell by 5.9% to $3.35 billion and the dividend will be cut by more than half. Copper production for 2013 is anticipated to be in line with 2012, but production costs are expected to rise further. Kazakhmys stock is down more than 40% over the past 12 months.

What now?
Dividends form a core part of many a successful long-term portfolio. Whether you need that income to live on, or you want to reinvest it for the long term, there’s nothing wrong with collecting …read more
Source: FULL ARTICLE at DailyFinance