A magnificent 7set Great British institutions to bounce back and spark up your portfolio
As M&S announces bumper profits to the delight of shareholders, we put the spotlight on...
should mean bumper profits for Shell – and more importantly as far as investors are concerned, growing dividends.’
The shares ended Friday at £27.72 and the dividends it pays are equivalent to an annual income of 3.7 per cent.
‘Its shares look cheap,’ says William Lamond, investment director of London based Oakglen Wealth, ‘especially when compared to its peers in the United States such as Chevron and Exxon.’
5 NATWEST
ALTHOUGH the scheduled summer sale of the Government’s stake in NatWest now looks to have been abandoned because of the General Election, experts still like the bank’s shares.
An improving economy and lower interest rates, they say, would improve demand from borrowers for both its mortgages and small business finance.
Investment trusts F&C and Temple Bar hold NatWest in their portfolios. Paul Niven, manager of F&C, bought NatWest shares for the first time in a decade last October at £2.16. They are now just above £3.07, but he says they are still cheap while offering investors an attractive annual dividend equivalent to 5.5 per cent.
Ian Lance, co-fund manager of Temple Bar, agrees. He says that the business is unrecognisable from the one that had to be bailed out during the 2008 financial crisis. He adds: ‘This year should see the bank make a healthy net income of £4.5billion [the difference between the income it earns from borrowings and pays savers in interest]. It’s so well capitalised that it has been buying back its own shares, enhancing both earnings and dividends per share. A true revival in one of the UK stock market’s best-known companies.’
6 ASTRAZENECA
EVELYN’S Hollands believes the world is on the cusp of a healthcare boom – and AstraZeneca, headquartered in Cambridge, will be one of the main beneficiaries. He is excited by the fact that the company is confident of generating annual revenues of £63 billion by 2030, helped by a pipeline of 20 new drugs designed to help people manage with conditions such as diabetes.
He adds: ‘It is also entering the weight-loss market with a pill licensed from Chinese firm Eccogene – and has taken a stake in Swiss biotech firm SixPeaks Bio, specialising in anti-obesity therapies.’ Shares are up 14 per cent this year, closing Friday at £122.96.
7 BRITVIC
SOFT drinks business Britvic has been around since the 1930s. It owns numerous well-known brands such as Ballygowan Water, J20 and Robinsons. Half-year results published earlier this month show that the company is in good health with both revenues and profits increasing.
David Smith, manager of investment trust Henderson High Income, says the business has been transformed under the leadership of Simon Litherland with manufacturing facilities invested in, new brands created, and the marketing of products improved.
He adds: ‘I am confident Britvic now has the potential to deliver sustainable higher growth.’
Shares in the FTSE 250 company are up nearly 20 per cent this year at £10.05. In the last financial year, it paid a dividend of 30.8p a share.