MENU

Why BG Group plc, Associated British Foods plc and Standard Chartered PLC Should Lag The FTSE 100 Today

Last week’s modest optimism seems to have deserted the FTSE 100 (FTSEINDICES: ^FTSE) today, with the index of top UK stocks down 16 points to 6,526 by early afternoon. With nothing much in the way of macroeconomic news around, it’s mainly a few big falls, especially from BG Group, responsible for the downturn.

Here’s a quick look at that drop, together with a couple more FTSE 100 fallers today:

BG Group

BG Group (LSE: BG) (NASDAQOTH:BRGYY.US) shares took a 59p (4.6%) hit to 1,223p this morning, after the firm warned of delays in two projects which will hit production. First production from West Delta Deep Marine in Egypt has faced disruption due to the ongoing political crisis, and production will now commence later in 2014 than expected — provided there are no further problems.

And in Norway, there should be a four-month delay in the Knarr project, pushing first production back to the second half of 2014. The two delays together should cause a reduction of around 30,000 barrels of oil equivalent per day.

Associated British Foods

Associated British Foods (LSE: ABF) shares are down 37p (2%) to 1,814p by mid-morning, despite a pre-close announcement telling us that adjusted second-half operating profit “will be ahead of expectations delivered by a strong finish to the year from Primark“.

The company also told us that adjusted earnings per share (EPS) “will show good progress“, and that strong cash inflows should help get net debt down from £1.1bn to £0.9bn.

But despite recent falls, the shares are still more than 40% ahead over the past 12 months, and are on a relatively high forward P/E of 19 with only a sub-2% dividend yield expected.

Standard Chartered

Standard Chartered (LSE: STAN) shares reacted positively to August’s first-half results, but the resulting rise only lasted a few days before the price started heading South again. And we’ve had a further slip, of 25p (1.7%), so far today to 1,447p. As a result, the price is barely up over the past year, and is lagging the FTSE by quite some distance. Performance at the halfway stage would have been strong, except for one key problem — a $1bn impairment charge relating to Korean operations, which knocked 16% off profits.

There’s a small fall in EPS forecast for this year, but the shares are on a modest P/E of 10.5, dropping to 9.3 for 2014, and dividend yields around 4% are expected. Oversold? It might be.

Finally, you can compensate for the day-to-day ups and downs of share prices by looking for reliable dividends. So how would you like a company that’s offering a 5% yield and which could be set for some nice share-price appreciation, too?

All you need to do is get a copy of our BRAND-NEW report, “The Motley Fool’s Top Income Share” — it’s completely free of charge, but it will only be available for a limited period. Click here to enjoy your copy today.

> Alan does not own any shares mentioned in this article. The Motley Fool owns shares in Standard Chartered.