Nachrichten |
| Datum / Uhrzeit |
Titel |
Bewertung |
| 25.03.25 12:56:05 |
M&G Full Year 2024 Earnings: Misses Expectations |
 |
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
M&G (LON:MNG) Full Year 2024 Results
Key Financial Results
Revenue: UK£5.46b (down 13% from FY 2023). Net loss: UK£360.0m (down by 221% from UK£297.0m profit in FY 2023). UK£0.15 loss per share (down from UK£0.13 profit in FY 2023).LSE:MNG Revenue and Expenses Breakdown March 25th 2025
All figures shown in the chart above are for the trailing 12 month (TTM) period
M&G Revenues and Earnings Miss Expectations
Revenue missed analyst estimates by 2.0%. Earnings per share (EPS) was also behind analyst expectations.
The primary driver behind last 12 months revenue was the Life (Inclu. Wealth) segment contributing a total revenue of UK£7.55b (138% of total revenue). Notably, cost of sales worth UK£2.96b amounted to 54% of total revenue thereby underscoring the impact on earnings. The largest operating expense was General & Administrative costs, amounting to UK£1.88b (66% of total expenses). Explore how MNG's revenue and expenses shape its earnings.
The company's shares are down 1.6% from a week ago.
Risk Analysis
What about risks? Every company has them, and we've spotted 2 warning signs for M&G you should know about.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
View Comments |
| 22.03.25 07:17:51 |
M&G (LON:MNG) Will Pay A Larger Dividend Than Last Year At £0.135 |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
M&G plc's (LON:MNG) periodic dividend will be increasing on the 9th of May to £0.135, with investors receiving 2.3% more than last year's £0.132. This makes the dividend yield 9.2%, which is above the industry average.
M&G's Projections Indicate Future Payments May Be Unsustainable
Estimates Indicate M&G's Could Struggle to Maintain Dividend Payments In The Future
M&G's Future Dividends May Potentially Be At Risk
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. The company is paying out a large amount of its cash flows, even though it isn't generating any profit. This makes us feel that the dividend will be hard to maintain.
Over the next year, EPS is forecast to expand by 196.0%. If the dividend continues on its recent course, the payout ratio in 12 months could be 143%, which is a bit high and could start applying pressure to the balance sheet.LSE:MNG Historic Dividend March 22nd 2025
View our latest analysis for M&G
M&G Doesn't Have A Long Payment History
The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of £0.119 in 2020 to the most recent total annual payment of £0.201. This means that it has been growing its distributions at 11% per annum over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
Dividend Growth Potential Is Shaky
The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. M&G's EPS has fallen by approximately 45% per year during the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
M&G's Dividend Doesn't Look Great
In conclusion, we have some concerns about this dividend, even though it being raised is good. The company's earnings aren't high enough to be making such big distributions, and it isn't backed up by strong growth or consistency either. The dividend doesn't inspire confidence that it will provide solid income in the future.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 2 warning signs for M&G that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
View Comments |
| 20.03.25 07:00:50 |
M&G PLC (MGPUF) (Q4 2024) Earnings Call Highlights: Surpassing Targets and Strategic Shifts |
 |
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Capital Generation: Over GBP900 million generated, exceeding the upgraded OCG target. Cost Savings: GBP188 million delivered in the first two years of the transformation program, with a new target of GBP230 million by the end of 2025. Group Operating Profit: Up 5% year-on-year, driven by a nearly 20% improvement in Asset Management. New Business Volumes in Life: Increased by 50%, reaching nearly GBP900 million in premiums. Net Client Outflows: GBP1.9 billion, mainly from UK Institutional Asset Management and PruFund. Closing AUMA: GBP346 billion, GBP2 billion higher than the opening balance. Asset Management Operating Profit: Increased by GBP47 million to GBP289 million. Solvency Ratio: Increased to 223%, with a solvency surplus of GBP4.7 billion. Dividend Policy: Shift to a progressive dividend policy with a 2% DPS increase for 2024. Adjusted Operating Profit: GBP837 million, up 5% year-on-year. Average AUM: GBP314 billion, up nearly 3% in 2024. Cost-to-Income Ratio: Improved by 3 percentage points to 76% (74% including performance fees). CSM (Contractual Service Margin): Increased by 10% year-on-year to GBP6 billion.
Warning! GuruFocus has detected 6 Warning Sign with MGPUF.
Release Date: March 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
M&G PLC (MGPUF) generated over GBP900 million of capital, exceeding their upgraded OCG target, which allowed for debt reduction and increased dividend cash spend. The company announced a move to a progressive dividend policy, reflecting confidence in future business prospects. M&G PLC (MGPUF) achieved GBP188 million in savings from transformation efforts, leading to an upgraded cost target of GBP230 million by the end of 2025. Group operating profits increased by 5% year-on-year, driven by a nearly 20% improvement in Asset Management results. The Life segment saw a 50% increase in new business volumes, reaching nearly GBP900 million in premiums, offsetting the run-off of the in-force book.
Negative Points
Net client outflows of GBP1.9 billion were reported, primarily due to UK Institutional Asset Management and PruFund. Asset Management net outflows of GBP900 million were driven by the Institutional segment, with headwinds from UK DB schemes. PruFund flows remained under pressure as customers favored alternative risk-free solutions due to elevated interest rates. The cost-to-income ratio target of 70% was not achieved, with the current ratio standing at 76% without performance fees. The company faces challenges in the UK market, with structural challenges in Defined Benefit pension schemes and high rates impacting derisking journeys.
Story Continues
Q & A Highlights
Q: Can you provide an update on net flows for Institutional, Wholesale, and PruFund over the first 2.5 months of 2025? A: Andrea Rossi, Group CEO, explained that the momentum from 2024 has continued into 2025, particularly in international markets. Institutional flows have been strong due to offerings in public equities, credits, and private assets. Wholesale interest remains high, especially in Private Credit and Real Estate. PruFund has seen improved flows, with net outflows halving in the second half of 2024, and this positive trend is expected to continue in 2025.
Q: How are you planning to achieve the GBP230 million cost savings target, and what is the expected new business strain over the next three years? A: Kathryn Mcleland, CFO, stated that the company has reduced its change budget from GBP140 million to GBP105 million and expects to continue spending less on simplification efforts. The new business strain is expected to be between GBP100 million to GBP150 million annually, with flexibility depending on client needs and market conditions.
Q: What is the rationale behind reopening the Life business to new business, and what are the key metrics for BPA value share transactions? A: Andrea Rossi, Group CEO, explained that the reopening was driven by market opportunities and M&G's strong investment capabilities in fixed income and private assets. The BPA value share transactions offer low strain and high IRR, making them attractive for corporate sponsors and beneficial for M&G's capital requirements.
Q: How confident are you in reaching the GBP100 billion target for private market assets by 2025, and what role does the Life business play in this? A: Andrea Rossi, Group CEO, expressed confidence in growing the private market franchise due to improved valuations and increased investor appetite. The Life business provides potential seed capital, which is crucial for launching new strategies and scaling up with third-party money.
Q: What are the implications of moving from a 90:10 to a 100:0 profit-sharing model for new With-Profit business? A: Kathryn Mcleland, CFO, stated that the shift simplifies the business model, accelerates capital and cash generation, and emphasizes fee-related earnings. It makes the business easier to understand for shareholders and aligns with M&G's strategy to optimize balance sheet returns.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
View Comments |
| 19.03.25 09:36:06 |
MNG stock rises on strong FY24 results and upbeat targets |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
MNG stock rises on strong FY24 results and upbeat targets
Investing.com -- Shares of M&G Plc (LON:MNG) climbed 3.21% following the announcement of solid FY24 operating results and optimistic future targets.
The company reported an adjusted operating profit and operating capital generation that surpassed expectations, driven by non-underlying items such as foreign exchange gains and a one-off in shareholder annuities. The adjusted operating profit for the fiscal year came in at £837 million, outpacing the consensus of £769 million and RBC estimates of £781 million.
The firm's Solvency II ratio, a measure of capital adequacy, stood at 223%, exceeding the consensus by 7 percentage points. This result was supported by the operating capital generation beat, which was reported at £933 million against a consensus of £916 million.
However, asset management net flows were weaker than expected, with a £0.9 billion outflow compared to the consensus of a £0.1 billion outflow.
Looking ahead, MNG has set ambitious targets for the FY25-27 period, including an average annual adjusted operating profit growth of at least 5%, which suggests consensus earnings upgrades of 4-6%.
The company also aims to generate £2.7 billion in operating capital over the next three years, a figure that aligns with previous achievements but is considered higher quality due to a larger proportion being underlying.
Furthermore, MNG has formalized a progressive dividend policy, announcing a 2% rise in dividends per share (DPS) for FY25, which is in line with consensus expectations of approximately 3% growth per annum through FY27.
RBC analysts commented on the company's financial guidance, stating, "MNG’s new operating capital generation guidance (OCG) implies small downgrades to consensus, once new business capital strain is considered. However, it remains strong enough to underpin MNG’s confidence to commit to a progressive dividend policy, while also continuing to invest in the business (via higher Life new business capital strain)."
Related Articles
MNG stock rises on strong FY24 results and upbeat targets
Exor NV lifts stake in Philips to 18.7%
Adyen and AstraZeneca gain TD Cowen's Best Ideas recognition on growth potential
View Comments |
| 30.12.24 05:46:21 |
With 76% institutional ownership, M&G plc (LON:MNG) is a favorite amongst the big guns |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Key Insights
Significantly high institutional ownership implies M&G's stock price is sensitive to their trading actions A total of 13 investors have a majority stake in the company with 50% ownership Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls M&G plc (LON:MNG), then you'll have to look at the makeup of its share registry. With 76% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
In the chart below, we zoom in on the different ownership groups of M&G.
Check out our latest analysis for M&G LSE:MNG Ownership Breakdown December 30th 2024
What Does The Institutional Ownership Tell Us About M&G?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in M&G. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see M&G's historic earnings and revenue below, but keep in mind there's always more to the story.LSE:MNG Earnings and Revenue Growth December 30th 2024
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in M&G. Looking at our data, we can see that the largest shareholder is Silchester International Investors LLP with 8.7% of shares outstanding. With 8.3% and 6.4% of the shares outstanding respectively, BlackRock, Inc. and Kingdom Holding Company are the second and third largest shareholders.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Story Continues
Insider Ownership Of M&G
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our data suggests that insiders own under 1% of M&G plc in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. Keep in mind that it's a big company, and the insiders own UK£5.1m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 14% stake in M&G. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
Private equity firms hold a 6.4% stake in M&G. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for M&G that you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
View Comments |
| 09.10.24 22:44:42 |
M&G PLC (MGPUF) (H1 2024) Earnings Call Highlights: Strong Inflows and Strategic Debt Reduction |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Debt Buyback: GBP461 million of debt repurchased, reducing ongoing interest by GBP21 million per annum. Cost Savings: GBP121 million of savings delivered, with a target increase to GBP220 million. Net Inflows: Nearly GBP2 billion of net inflows in the first half, with over GBP700 million in July and August. Operating Capital Generation: GBP486 million in H1, with a target upgrade from GBP2.5 billion to GBP2.7 billion. Leverage Ratio: Improved from 35% to 32%. Asset Management Cost Income Ratio: Improved from 79% to 77%. Operating Profit: GBP375 million, with a 9% improvement in asset management contribution. Solvency Ratio: Increased to 210%. Assets Under Management: GBP346 billion, with GBP2 billion increase due to positive markets. Net Client Outflows: GBP1.5 billion, mainly in the wealth segment. CSM (Contractual Service Margin): Increased to GBP5.8 billion, a 5% rise in six months.
Warning! GuruFocus has detected 4 Warning Sign with MGPUF.
Release Date: September 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
M&G PLC (MGPUF) achieved strong investment performance, with nearly GBP2 billion of net inflows in the first half of 2024, and over GBP700 million in July and August. The company has significantly reduced its debt, buying back GBP461 million and reducing ongoing interest by GBP21 million per annum. M&G PLC (MGPUF) has increased its cost savings target to GBP220 million, reflecting strong progress in its transformation program. The solvency ratio improved to 210%, indicating a strong balance sheet and financial resilience. The asset management division saw a 9% increase in profits, driven by higher revenues and reduced costs.
Negative Points
Net client outflows of GBP1.5 billion were reported, mainly in the wealth segment. Operating profit was marginally down year-on-year, with a decline in PruFund and traditional with-profits earnings. Persistently high interest rates have been a headwind, particularly affecting PruFund sales. The company is exiting its digital platform and advisor platform, indicating challenges in its wealth strategy. The asset management cost income ratio, although improved, still stands at 77%, indicating room for further efficiency improvements.
Q & A Highlights
Q: Can you elaborate on the capital-lite expansion in the bulk annuity business, especially considering the traditionally capital-intensive nature of this line? A: Andrea Rossi, CEO: We aim to grow our capital-lite business across various segments, including bulk annuities. One approach is to share economics with pension scheme sponsors, reinsuring longevity and credit risk back to them. This allows us to offer capital-lite solutions by leveraging the excess capital in our With-Profits Fund, ensuring we remain competitive and compliant with regulatory expectations.
Q: What is the rationale behind combining Wealth and Life, and what benefits do you expect from this move? A: Andrea Rossi, CEO: The combination aims to streamline operations and broaden access to our solutions. By integrating Wealth as a distribution arm with Life's manufacturing capabilities, we can enhance our product offerings and distribution reach, particularly for PruFund. This move is part of our simplification strategy to drive sustainable growth and improve profitability.
Q: With the strong capital position, do you consider having excess capital, and how do you plan to utilize it? A: Andrea Rossi, CEO: We are pleased with our strong financial position and focus on investing for business growth and dividend enhancement. While we have no immediate plans for excess capital returns, we will review our capital management framework and dividend policy with the Board, considering the macroeconomic environment and operational performance.
Q: Can you provide more details on the management actions and their impact on capital generation for the second half of the year? A: Kathryn Mcleland, CFO: In the first half, management actions contributed GBP189 million, driven by asset reallocation and equity hedging. We expect to continue reviewing key assumptions, including longevity, in the second half. Our confidence in achieving the revised GBP2.7 billion target remains strong, supported by our capital management tools and strategic initiatives.
Q: What level of interest rates would support PruFund growth again? A: Andrea Rossi, CEO: Currently, high rates lead customers to prefer government bonds and cash. We anticipate structural headwinds in the second half, but as rates decline, likely in 2025, we expect renewed interest in PruFund. We are also enhancing distribution by making PruFund available on multiple platforms and expanding our advisor network.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
View comments |
| 09.10.24 13:13:35 |
Dividend stock picks to consider when investing as interest rates fall |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Further interest rate cuts by central banks mean that the rates of return on cash saving accounts are also set to fall, but there are a number of stocks on the UK market that can offer an appealing alternative for investors seeking income.
The Bank of England (BoE) cut interest rates to 5% in August, its first reduction in more than four years. The central bank decided to keep rates on hold in September but BoE governor Andrew Bailey said last week that it could become "more aggressive" in its approach to rates if inflation continues to cool.
However, BoE chief economist Huw Pill appeared to contradict this suggestion in a speech on Friday, in which he said it was "important to guard against the risk of cutting rates either too far or too fast" and emphasised the need for a “gradual withdrawal of monetary policy restriction”.
Inflation came in at 2.2% in August, the same rate as in July, rising slightly from when it dipped to the Bank of England's 2% target in May and June.
Markets have been betting that the BoE will next cut rates in its November meeting. Other central banks have also been reducing rates, with the US Federal Reserve recently announcing a bigger-than-expected 0.5% cut and the European Central Bank deciding to lower its key deposit rate by 25 basis points for a second time this year.
Read more: The best funds to invest in according to expert research teams
What central banks do with their interest rates also influences the rates set by high-street banks and lenders. While this does mean the rate of interest borrowers pay on debt should fall, it also means a lower rate of return from cash savings accounts.
This makes investments that can offer a form of income return on cash more attractive as an alternative, including stocks that have a strong track record of paying dividends.
A dividend is a portion of company earnings that is paid out to some or all investors and is often distributed on a quarterly basis. These payments can act as an indicator of a company's financial stability.
The FTSE 100 (^FTSE) currently has a dividend yield of 3.59%, according to the London Stock Exchange website.
Data from AJ Bell on Monday showed that analysts expect dividend growth of 1% on the FTSE 100 in 2024 to an aggregate payout figure of £78.6m ($102.85m), which leaves it with a forward yield of 3.7% for the year, based on ordinary dividend payments. Analysts then expected dividends on the blue-chip index to grow 7% in 2025 to aggregate of £83.9bn, leaving a forward yield of 4% next year.
A dividend yield is a percentage that shows the ratio of how much a company pay outs in dividends relative to its share price. While a strong dividend yield is good news for investors, one that is too high may also signal that a company is paying too much of its profits out rather than reinvesting them back into the business, so its important to take that into consideration when looking for the right income stocks.
Story continues
Finding the right income stocks
Richard Hunter, head of markets at Interactive Investor, said: "There are any number of generous dividend payers in the FTSE 100 index ... but of course other factors are at play."
For example, dividend cover measures a company's ability to pay out dividends. It does this by working out how many times a company can pay its dividend to shareholders from its net income.
Hunter said: "This gives an indication of whether monies are being distributed from previous profits (a number of less than 1), which is clearly unsustainable.
"By the same token, a number of 1.5 or above is generally accepted to be a comfortable level."
Read more: How to minimise a capital gains tax impact on your investments
In AJ Bell's dividend dashboard, the platform's investment director Russ Mould highlighted that forecasts for the aggregate earnings cover ratio for the FTSE 100 are "moving lower as profit forecasts slip and estimates for dividend payments hold firm".
"Cover in 2024 is expected to come in at 2.07 times according to analysts’ consensus earnings and dividend forecasts," he said. This figure down from 2.57x in 2022 and would be the lowest since 2020 in the pandemic.
Other factors that investors need to look at when assessing how safe a dividend may be are the balance sheet and cash flow of the business, said Mould.
"They will also need to assess the volatility of profits and, in the case of cyclical stocks whose earnings and cash flow are subject to the vagaries of the economic cycle, look at average earnings over a full cycle to see what degree of cover that provides," he added.
Income stock picks Supermarket Sainsbury's is an option for income-seeking investors, with a dividend yield of 4.5%. (Daniel Harvey Gonzalez via Getty Images)
M&G (MNG.L)
Fund manager M&G is currently the highest-yielding stock in the FTSE 100, at 9.5%, according to AJ Bell's analysis. The stock has a dividend cover of 1.36x and has not cut its dividend in the last decade. The company's payout ratio of the proportion of its earnings paid out to shareholders as dividends is 74%.
In its half-year results, published last month, the company announced an interim dividend of 6.6p per share, up slightly from 6.5p for the same period last year. M&G reported net client outflows of £1.5bn in the first half, versus £700m inflows last year and said operating profits before tax were down to £375m on the £390m it posted in 2023.
However, M&G CEO Andrea Rossi said the company's "simplification agenda continues at pace, delivering £121m in cost savings so far".
Legal & General (LGEN.L)
Insurer Legal & General also has a dividend yield of 9.5% but a cover of 0.87x and a payout ratio of 115%, though the company hasn't cut its dividend in the last decade.
Read more: Stocks to watch ahead of the October budget
Will Howlett, financials analyst at Quilter Cheviot, says that L&G's "generous" yield is "supplemented by a £200m buyback for FY2024".
Stock buybacks are when companies repurchase their own shares and can be a way to return cash to investors.
HSBC (HSBA.L)
Bank HSBC has among the top 10 highest dividend yields on the FTSE 100, at 7.2%, according to AJ Bell's data. The stock also has a dividend cover of 2.08x, a payout ratio of 48% and has only cut its dividend in once in the last decade, in 2019.
Howlett said: "Market forecasts suggest an additional 6% yield from buybacks."
High dividend yields are a "notable feature of many stocks in the financial sector. Major UK banks have committed to returning capital through regular buybacks, in addition to their regular dividends, resulting in total distribution yields exceeding 10%," he said.
“Although falling interest rates pose a challenge to net interest income, banks have increased hedging to mitigate the impact of rate cuts. Looser monetary policy is expected to boost economic activity, supporting loan demand and fee growth, while keeping loan losses under control."
British American Tobacco (BATS.L)
British American Tobacco is another high-yielding stock, at 8%, with dividend cover of 1.35x and a payout ratio of 74%, AJ Bell's analysis showed. The tobacco company last cut its dividend in 2015.
Chris Beckett, head of equity research at Quilter Cheviot, said that while investing in tobacco companies is "frowned upon these days", for those comfortable investing in this space these stocks offer "deep value and considerable shareholder returns".
British American Tobacco is one of the best performers in the sector, having "managed to offset the decline in people smoking by raising prices and introducing new generation, less harmful products," according to Beckett.
In addition, the company is undertaking a £700m share buyback this year and a £900m buyback in 2025, "so the returns to shareholders will continue to be rewarding", said Beckett.
"The company also expects revenue and profit growth for the full year, and with a valuation at seven times its expected earnings," he said, adding that it is a "cheap company that provides investors with a defensive option that we expect will continue to do well in the current trading environment."
Sainsbury's (SBRY.L)
Interactive Investor's Hunter highlighted supermarket Sainsbury's as another option for income-seeking investors.
Read more: The top stock sectors to watch for the rest of 2024
The stock has dividend yield of 4.5%, with dividend cover of 1.7x. Market consensus puts a buy rating on the stock, with the share price up 16% on a one-year basis.
Sainsbury's shares slumped at the beginning of the year but have recovered in recent months, particularly following the release of its first-quarter results in July. The supermarket said sales were up 4.2% year-on-year and reiterated that it expected retail underlying operating profit of between £1.06bn and £1.06bn for the full fiscal year.
Taylor Wimpey (TW.L)
The housebuilder is another stock that Hunter says is worthy of consideration, with a dividend yield of 5.8%.
However, he said the stock is a "marginal inclusion" on his list given its its dividend cover of 1x. That said, consensus is also for a buy rating on Taylor Wimpey, with shares up 40% over one year.
While the housebuilder reported falls in revenue and profits in its first-half results in July, compared with the previous year, Taylor Wimpey CEO Jennie Daly said the company is still expected to deliver group operating profit in line with current market expectations.
Shell (SHEL.L)
Hunter also mentions oil major Shell as another option, which has a dividend yield of 4.1% and cover of 3.2x.
However, he points out the caveat of the influence of recent stock performance, as a "drop in the share price will automatically raise the dividend yield" but still says it is worthy of investor consideration.
Shell warned on Monday that third-quarter refining profit margins were set to be much lower than the previous quarter, in an update note published ahead of results due to be released on 31 October.
Hunter says that there are many other options even within the premier index for income-seeking investors, but adds that these picks also highlight other factors should be "borne in mind to ensure that investors do not look at the dividend yield in isolation".
Download the Yahoo Finance app, available for Apple and Android. |
| 04.09.24 07:12:20 |
M&G Targets More Cost Savings as Markets Offset Client Outflows |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
(Bloomberg) -- M&G Plc boosted its capital generation and cost savings targets as net outflows in the first half of the year were offset by buoyant markets.
Most Read from Bloomberg
How Air Conditioning Took Over the American Office Hong Kong’s Arts Hub Turns to Selling Land to Stay Afloat
The firm said it was now targeting operating capital generation of £2.7 billion ($3.5 billion) by the end of 2024, an increase of £200 million from its March guidance, M&G said in a statement Wednesday. It is also now earmarking cost savings of £220 million by the end of next year, up 10%.
Chief Executive Officer Andrea Rossi and Chief Financial Officer Kathryn McLeland said on a call with Bloomberg News that the extra cost savings will be group wide, including through automating processes, reducing reliance on external third parties and some headcount reduction.
Clients withdrew £1.5 billion ($2 billion) in the six months through June, M&G said. Analysts had estimated higher group-level outflows of £2.8 billion. The outflows came from across the business, including UK institutional asset management and the firm’s wealth division.
“Positive markets” helped assets under management and administration rise slightly to £346.1 billion, up from £343.5 billion at the end of last year, M&G said. Its shares were down 0.7% at 8:11 a.m. in London.
M&G spun out of Prudential Plc in 2019 and has been trying to grow via acquisitions and by expanding into areas such as wealth, digital advice and private markets, where it has been making a bigger push in Europe to attract more institutional investors.
Most Read from Bloomberg Businessweek
Justice Is Beside the Point in America’s Immigration Courts Brazil Decides to Cancel the Elon Show Private Equity Is Coming for Youth Sports How Rent Controls Are Deepening the Dutch Housing Crisis Need 100,000 Balloons for a Convention? Here’s the Guy to Call
©2024 Bloomberg L.P.
View comments |
| 30.08.24 15:04:57 |
Stocks to watch this week: Vistry, Barratt Developments, Currys, DocuSign and Broadcom |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
As earnings season winds down, investors will still have plenty to watch this week as key companies across various sectors provide updates that could offer valuable insights into market trends.
In the UK, housebuilder Vistry will tell investors how well positioned it is to capitalise on the new government's pledge of building 1.5 million homes this parliament. Meanwhile, Currys will show if it has managed to keep momentum and delivers profits amid a tricky economic backdrop.
In the tech sector, DocuSign should provide an update on whether its cost reduction plan that included layoffs has improved profitability.
Right in the middle of the artificial intelligence wave, chipmaker Broadcom is expected to show markets that it is running "on all cylinders."
Here's what to look out for:
Vistry (VTY.L) — Reports first-half results on Thursday 5 September
Housebuilder Vistry, which has been one of the top-performing stocks on the FTSE 100 so far in 2024, is due to publish its half-year results on 5 September. The shares up 50% year-to-date, as Labour's landslide victory in July's general election boosted housebuilding more broadly.
In a July trading update, which offered a sneak peek at the first-half figures, Vistry said it expected adjusted operating profits to be 10% higher for the first six months of 2024 at around £227 million than the same period last year.
The housebuilder said total completions had increased by around 8% in first half to 7,750 and that it was on track to deliver more than 18,000 completions for the full year, increasing by a fifth on 2023.
Read more: The top FTSE 100 winners and losers of 2024 so far
In addition, Vistry said its sales rate in the first six months of the year had risen to 1.21 units per site per week, up 0.86 units last year.
Last year, Vistry announced its return to fully focusing on a partnership model, which includes working with local authorities to deliver affordable housing.
Vistry CEO Greg Fitzgerald said in the July trading update that the business was "extremely well placed to support [the government's] ambition of delivering the biggest boost to affordable housing in a generation”.
Susannah Streeter, head of money and markets at Hargreaves Lansdown (HL.L), said: "Partnerships tend to be lower-margin than ordinary housebuilding projects, so margins may remain under pressure this year — but by increasing its scale in the partnerships space looks set to continue boosting future volumes, which should go a long way to offsetting the margin decline's effect on overall profits."
Story continues
In last month's update, Vistry said it continued to secure a strong pipeline of partnership opportunities which met requirements including of having an operating margin of more than 12%.
Data released by Nationwide on Friday also spelled positive news for the property market, as it showed that UK house prices surged at their fastest pace since December 2022, as mortgages have become cheaper amid expectations of further interest rate cuts.
Barratt Developments (BDEV.L)— Reports full-year results on Wednesday 4 September
Housebuilder Barratt Developments has been pursuing a buyout of its smaller rival Redrow. The Competition and Markets Authority (CMA) has been investigating the £2.5bn deal and the watchdog said last week that there were “reasonable grounds for believing that the undertakings offered by [Barratt and Redrow]...might be accepted.”
The CMA raised concerns in its phase one review of the deal relating to competition in the area around Whitchurch in Shropshire, where the two housebuilders had a high combined share of land. The watchdog then gave the two businesses until 15 August to offer solutions.
The merger hasn’t been the only effort at consolidation in the UK housebuilding sector. Bellway (BWY.L) had put forward an offer for smaller peer Crest Nicholson (CRST.L) but dropped its bid last month.
In terms of performance, Barratt is expected to report a fall in home completions. In full-year guidance released in July, the housebuilder said completions decreased to 14,004 for the year ending 30 June, down from 17,206 in the previous year. Barratt said it expected to complete netween 13,000 and 13,500 homes in the 2025 fiscal year.
Despite the anticipated fall in completions, Barratt said that it expected adjusted profit before tax to be slightly ahead of previous forecasts for 2024.
Shares are down 8% year-to-date.
Currys (CURY.L) — Reports trading update on Thursday 5 September
Investor sentiment toward Currys has turned around over the last year, say AJ Bell investment director Russ Mould and investment analyst Dan Coatsworth. Shares in electricals retailer, which is due to release a trading update on 5 September, are now up 59% year-to-date.
Mould and Coatsworth attributed the shift to a "pair of earnings upgrades during its last fiscal year, an improved balance sheet thanks to the sale of its Greek business and an unsuccessful takeover bid at 67p a share from activist investor Elliott."
They said Currys had started to "build some profit momentum thanks to improved trading in the Nordic region and the UK, despite an economic backdrop that is still difficult."
In its full-year results, Currys posted adjusted profits before tax of £118m, up 10% year-on-year.
Currys group CEO Alex Baldock said in the report that the business was on course to grow both profits and cashflow.
Baldock also said Currys expected "AI-powered technology to be the most exciting new product cycle since the tablet in 2010".
"With our partnerships, scale and expert colleagues to demystify AI, we’re best-placed to benefit," he added.
Should Baldock offer any insights on how the 2025 fiscal year is shaping up so far, Mould and Coatsworth said analysts currently expect group sales of £8.5bn, which would be broadly flat on 2024.
They said that analysts were also expecting adjusted pre-tax profit to come in at £136m, up from the £118m reported last year.
Analysts also anticipate that Currys will resume dividend payments this year, at 1.8p a share.
"Improved profitability, recurring revenues from the iD Mobile phone contract deals and a strengthened balance sheet all underpin the anticipated return to the dividend list," Mould and Coatsworth said. iD Mobile is the network operator which is a subsidiary of Currys.
DocuSign (DOCU) — Reports second-quarter earnings on Thursday 5 September
Another company due to share results on Thursday is e-signature software business DocuSign, with shares little changed year-to-date at $59.03.
In the first quarter, DocuSign reported a total revenue of $709.6m (£539.38), up 7% year-on-year and posted a net income of $33.8m, a marked turnaround from the $539,000 reported for the same period in 2023.
DocuSign CEO Allan Thygesen said that in the first quarter the company "continued to stabilise the business and improve profitability, allowing Docusign to continue investing for long term growth."
Zacks Equity Research has named DocuSign as a top growth stock, saying that earnings and sales are forecast to grow year-on-year, while also highlighting that the business is "cash rich" and is expected to report a cash flow expansion of 86.5% in 2025.
DocuSign announced back in February that it was cutting around 6% of its workforce, as part of a restructuring plan aimed at helping "strengthen ... the company's financial and operational efficiency." It said the layoffs would mostly affect positions in its sales and marketing organisations.
The company said it expected the restructuring plan to be substantially complete by the end of the second quarter.
The announcement came after reports that acquisition talks with Bain Capital and Hellman & Friedman had stalled.
Broadcom (AVGO) — Reports third-quarter earnings on Thursday 5 September
Chipmaker Broadcom is another beneficiary of the AI boom and is due to share its 2024 third-quarter earnings on 5 September.
The US semiconductor manufacturer has seen shares climb 45% year-to-date.
In June, Broadcom announced a 10-for-1 stock split, which was executed in July. Stock splits are when companies increase the amount of outstanding shares on the market, which boosts the stock's liquidity and can make it more accessible to a wider range of investors.
Read more: What is a stock split and why are big tech companies opting for it?
Broadcom also posted second-quarter earnings in June that beat analyst estimates, reporting revenues of $12.5bn, which represented a 43% increase on the same period for 2023.
Hock Tan, president and CEO of Broadcom, said its second quarter results were once again driven by AI demand and VMware, the cloud computing business it acquired last year.
On the back of the results, Bank of America said it consider Broadcom as a "top AI pick" along with Nvidia (NVDA), suggesting that its valuation could be pushed past the $1tn mark, Fortune reported.
Ahead of next week's results, CFRA Research senior equity analyst Angelo Zino told Yahoo Finance's Market Domination that he believed Broadcom's networking business to be "the bread and butter" for their semiconductor segments.
"We think that is kind of running on all cylinders. So as far as kind of the semiconductor business, AI is driving that business very well, as well as Apple (AAPL). And then the VMware side of things, they continue to exceed our expectations on both the cost-cutting side of things, as well as kind of the revenue growth trajectory," Zino said
Other companies reporting next week include:
Monday 2 September
Kainos (KNOS.L)
Ashtead (AHT.L)
ZScaler (ZS)
Tuesday 3 September
Alumasc (ALU.L)
Craneware (CRW.L)
Johnson Service (JSG.L)
Michelmersh Brick (MBH.L)
Midwich (MIDW.L)
STV (STVG.L)
DS Smith (SMDS.L)
Watches of Switzerland (WOSG.L)
Hormel Foods (HRL)
Dick’s Sporting Goods (DKS)
Wednesday 4 September
M&G (MNG.L)
Direct Line (DLG.L)
Hilton Food (HFG.L)
Tod’s (TODGF)
Ciena (CIEN)
Thursday 5 September
Genus (GNS.L)
Ashmore (ASHM.L)
WAG Payment Solutions (WPSL.XC)
Churchill China (CHH.L)
Bakkavor (BAKK.L)
Funding Circle (FCH.L)
Safestore (SAFE.L)
Friday 6 September
Kroger (KR)
You can read Yahoo Finance's full calendar here.
Download the Yahoo Finance app, available for Apple and Android. |
| 30.08.24 15:04:57 |
Stocks to watch next week: Vistry, Currys, DocuSign and Broadcom |
|
|
**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
As earnings season winds down, investors will still have plenty to watch next week as key companies across various sectors provide updates that could offer valuable insights into market trends.
In the UK, housebuilder Vistry will tell investors how well positioned it actually is capitalise on the new government's pledge of building 1.5 million homes this parliament. Meanwhile, Currys will show if it has managed to keep momentum and delivers profits amid a tricky economic backdrop.
In the tech sector, DocuSign should provide an update on whether its cost reduction plan that included layoffs has improved profitability.
Right in the middle of the artificial intelligence wave, chipmaker Broadcom is expected to show markets that it is running "on all cylinders".
Here's what to look out for:
Vistry (VTY.L) — Reports first-half results on Thursday 5 September
Housebuilder Vistry, which has been one of the top performing stocks on the FTSE 100 so far in 2024, is due to publish its half-year results on 5 September. The shares up 50% year-to-date, as Labour's landslide victory in July's general election boosted housebuilding more broadly.
In a July trading update, which offered a sneak peek at the first-half figures, Vistry said it expected adjusted operating profits to be 10% higher for the first six months of 2024 at around £227m than the same period last year.
The housebuilder said total completions had increased by around 8% in first half to 7,750 and that it was on track to deliver more than 18,000 completions for the full year, increasing by a fifth on 2023.
Read more: The top FTSE 100 winners and losers of 2024 so far
In addition, Vistry said its sales rate in the first six months of the year had risen to 1.21 units per site per week, up 0.86 units last year.
Last year, Vistry announced its return to fully focusing on a partnership model, which includes working with local authorities to deliver affordable housing.
Vistry CEO Greg Fitzgerald said in the July trading update that the business was "extremely well placed to support [the government's] ambition of delivering the biggest boost to affordable housing in a generation”.
Susannah Streeter, head of money and markets at Hargreaves Lansdown (HL.L), said: "Partnerships tend to be lower-margin than ordinary housebuilding projects, so margins may remain under pressure this year — but by increasing its scale in the partnerships space looks set to continue boosting future volumes, which should go a long way to offsetting the margin decline's effect on overall profits."
Story continues
In last month's update, Vistry said it continued to secure a strong pipeline of partnership opportunities which met requirements including of having an operating margin of more than 12%.
Data released by Nationwide on Friday also spelled positive news for the property market, as it showed that UK house prices surged at their fastest pace since December 2022, as mortgages have become cheaper amid expectations of further interest rate cuts.
Currys (CURY.L) — Reports trading update on Thursday 5 September
Investor sentiment toward Currys has turned around over the last year, say AJ Bell investment director Russ Mould and investment analyst Dan Coatsworth. Shares in electricals retailer, which is due to release a trading update on 5 September, are now up 59% year-to-date.
Mould and Coatsworth attributed the shift to a "pair of earnings upgrades during its last fiscal year, an improved balance sheet thanks to the sale of its Greek business and an unsuccessful takeover bid at 67p a share from activist investor Elliott."
They said Currys had started to "build some profit momentum thanks to improved trading in the Nordic region and the UK, despite an economic backdrop that is still difficult."
In its full-year results, Currys posted adjusted profits before tax of £118m, up 10% year-on-year.
Currys group CEO Alex Baldock said in the report that the business was on course to grow both profits and cashflow.
Baldock also said Currys expected "AI-powered technology to be the most exciting new product cycle since the tablet in 2010".
"With our partnerships, scale and expert colleagues to demystify AI, we’re best-placed to benefit," he added.
Should Baldock offer any insights on how the 2025 fiscal year is shaping up so far, Mould and Coatsworth said analysts currently expect group sales of £8.5bn, which would be broadly flat on 2024.
They said that analysts were also expecting adjusted pre-tax profit to come in at £136m, up from the £118m reported last year.
Analysts also anticipate that Currys will resume dividend payments this year, at 1.8p a share.
"Improved profitability, recurring revenues from the iD Mobile phone contract deals and a strengthened balance sheet all underpin the anticipated return to the dividend list," Mould and Coatsworth said. iD Mobile is the network operator which is a subsidiary of Currys.
DocuSign (DOCU) — Reports second-quarter earnings on Thursday 5 September
Another company due to share results on Thursday is e-signature software business DocuSign, with shares little changed year-to-date at $59.03.
In the first quarter, DocuSign reported a total revenue of $709.6m (£539.38), up 7% year-on-year and posted a net income of $33.8m, a marked turnaround from the $539,000 reported for the same period in 2023.
DocuSign CEO Allan Thygesen said that in the first quarter the company "continued to stabilise the business and improve profitability, allowing Docusign to continue investing for long term growth."
Zacks Equity Research has named DocuSign as a top growth stock, saying that earnings and sales are forecast to grow year-on-year, while also highlighting that the business is "cash rich" and is expected to report a cash flow expansion of 86.5% in 2025.
DocuSign announced back in February that it was cutting around 6% of its workforce, as part of a restructuring plan aimed at helping "strengthen ... the company's financial and operational efficiency." It said the layoffs would mostly affect positions in its sales and marketing organisations.
The company said it expected the restructuring plan to be substantially complete by the end of the second quarter.
The announcement came after reports that acquisition talks with Bain Capital and Hellman & Friedman had stalled.
Broadcom (AVGO) — Reports third-quarter earnings on Thursday 5 September
Chipmaker Broadcom is another beneficiary of the AI boom and is due to share its 2024 third-quarter earnings on 5 September.
The US semiconductor manufacturer has seen shares climb 45% year-to-date.
In June, Broadcom announced a 10-for-1 stock split, which was executed in July. Stock splits are when companies increase the amount of outstanding shares on the market, which boosts the stock's liquidity and can make it more accessible to a wider range of investors.
Read more: What is a stock split and why are big tech companies opting for it?
Broadcom also posted second-quarter earnings in June that beat analyst estimates, reporting revenues of $12.5bn, which represented a 43% increase on the same period for 2023.
Hock Tan, president and CEO of Broadcom, said its second quarter results were once again driven by AI demand and VMware, the cloud computing business it acquired last year.
On the back of the results, Bank of America said it consider Broadcom as a "top AI pick" along with Nvidia (NVDA), suggesting that its valuation could be pushed past the $1tn mark, Fortune reported.
Ahead of next week's results, CFRA Research senior equity analyst Angelo Zino told Yahoo Finance's Market Domination that he believed Broadcom's networking business to be "the bread and butter" for their semiconductor segments.
"We think that is kind of running on all cylinders. So as far as kind of the semiconductor business, AI is driving that business very well, as well as Apple (AAPL). And then the VMware side of things, they continue to exceed our expectations on both the cost-cutting side of things, as well as kind of the revenue growth trajectory," Zino said
Other companies reporting next week include:
Monday 2 September
Kainos (KNOS.L)
Ashtead (AHT.L)
ZScaler (ZS)
Tuesday 3 September
Alumasc (ALU.L)
Craneware (CRW.L)
Johnson Service (JSG.L)
Michelmersh Brick (MBH.L)
Midwich (MIDW.L)
STV (STVG.L)
DS Smith (SMDS.L)
Watches of Switzerland (WOSG.L)
Hormel Foods (HRL)
Dick’s Sporting Goods (DKS)
Wednesday 4 September
Barratt Developments (BDEV.L)
M&G (MNG.L)
Direct Line (DLG.L)
Hilton Food (HFG.L)
Tod’s (TODGF)
Ciena (CIEN)
Thursday 5 September
Genus (GNS.L)
Ashmore (ASHM.L)
WAG Payment Solutions (WPSL.XC)
Churchill China (CHH.L)
Bakkavor (BAKK.L)
Funding Circle (FCH.L)
Safestore (SAFE.L)
Friday 6 September
Kroger (KR)
You can read Yahoo Finance's full calendar here.
Download the Yahoo Finance app, available for Apple and Android. |
