Jo­hann van Zyl

Finweek English Edition - - Cover -

BID­VEST: With a mar­ket cap of R46bn it earns around 25% of its prof­its off­shore, but oth­er­wise should be con­sid­ered a proxy for SA’s do­mes­tic econ­omy. Its busi­ness di­vi­sions reach across most in­dus­trial sec­tors, with both ac­quis­i­tive and or­ganic growth. Earn­ings and div­i­dends have grown on av­er­age around 25%/year and the share price has grown 30%/year for the past 15 years. Man­age­ment is still ag­gres­sively look­ing for ac­qui­si­tions. RE­UNERT: This elec­tron­ics and elec­tri­cal en­gi­neer­ing com­pany has ex­pe­ri­enced re­cent share price un­der­per­for­mance due to neg­a­tive pub­lic­ity over its black em­pow­er­ment struc­ture and cost. Yet the com­pany’s di­verse di­vi­sions, whether linked to in­fra­struc­ture spend­ing or per­sonal and busi­ness con­sump­tion, are all per­form­ing well in SA’s cur­rently be­nign econ­omy. STAN­DARD BANK: It’s SA’s big­gest in terms of mar­ket cap­i­tal­i­sa­tion (R145bn), head­line earn­ings (R10,8bn) and ad­vances (R458bn). The six-year com­pound an­nual growth rate of head­line earn­ings per share is an im­pres­sive 19% and that of div­i­dends per share 25%. Its re­tail bank­ing man­age­ment is for­ward think­ing and has a good track record in iden­ti­fy­ing ar­eas that will be prof­itable over the longer term. AN­GLO PLAT­INUM: The plat­inum group met­als bas­ket price (in rand) is up 169% over the past year. At th­ese metal prices we should see earn­ings growth for An­glo­plat of 30% and 24% over the next two fi­nan­cial years, with earn­ings mul­ti­ples un­wind­ing from 21 times his­tor­i­cal, to 16x for the cur­rent fi­nan­cial year and 13x for 2008. The long-term price:earn­ings ra­tio for An­glo­plat is 21. It re­cently re­duced its div­i­dend cover to 1 times. If that’s main­tained then the for­ward div­i­dend yield is an at­trac­tive 6,2%. BHP BIL­LI­TON: Strong cash flow for global min­ers is a fea­ture of this stage of the com­mod­ity cy­cle – and BHP Bil­li­ton is no ex­cep­tion. The group’s re­cently an­nounced US$10bn share buy­back, to be com­pleted by Au­gust 2008, should con­tinue to pro­vide sup­port for the share price. Re­cent up­grades in ex­pec­ta­tions for 2008 iron ore prices and a re­cov­ery in base metal prices bodes well for earn­ings growth, which should in­crease by 40% to June 2007 and by 18% to June 2008.

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