We take a look at next week's investing opportunities.
We have a fairly quiet week ahead of us for FTSE 100 (UKX) news, but we do have a few key updates from the kind of companies that form the heart of many a long-term portfolio. And we have results from a very successful fund manager, who many of us would love to emulate.
Here's what to look out for:
Aberdeen Asset Management
It's full-year results time from FTSE 100 investment manager Aberdeen Asset Management (LSE: ADN) on Monday, and what a year it's been! The share price has stormed up over the past 12 months, and at 338p it's bobbing around a 10-year high. Aberdeen's success has been due to its expertise in emerging markets, but the firm has also been diversifying by acquisition, including buying RBS Asset Management in 2010, and snapping up other Europe-based fund managers.
Dividend-wise, Aberdeen has been paying a yield of around 4.5% to 5% in the last few years, but that drops to 3.7% on forecasts for September 2013, largely because of the rise in the share price. How will the results look? In its pre-close statement, Aberdeen told us that assets under management had reached £184.3bn by August, and over the preceding two months there had been new business flows of £6.1bn.
Utilities companies are often considered good cash cows to stash away in an income portfolio, as they pay a very large proportion of their earnings as dividends. United Utilities (LSE: UU), which is due to report on its first-half performance on Wednesday, is one that has been offering a steady dividend yield of around the 5% to 6.5% mark. With the shares currently priced around 670p, current forecasts are suggesting a yield for the year ending March 2013 of 5.3%, rising to 5.6% the following year.
And if that kind of income isn't enough, the share price has done pretty well over the past couple of years, too, putting on more than 50% since late 2009. So what will Wednesday bring? According to September's trading update, "trading is in line with the group’s expectations of delivering a good underlying financial performance for 2012/13".
Severn Trent (LSE: SVT) will also release interim figures, on Tuesday.
Still on the utilities front, Pennon Group (LSE: PNN), which owns South West Water in addition to being in the waste management business via its Viridor division, will report its interim figures on Thursday. Pennon has been paying decent dividends, too, but they haven't been as high as the pure utilities, with yields of around the 4% mark over the past few years. On the current share price of around 605p, City analysts are forecasting a dividend yield for March 2013 of 4.7%, rising to 5.1% in 2014.
But unlike United Utilities, Pennon's share price has taken a rather large tumble, after the firm issued a profit warning last week. Apparently due to weakening prices for recyclate products, Pennon's now says the performance of Viridor will be "somewhat below the bottom of the current range of market expectations". Group pre-tax profit is expected to be about £111m, which is around 3% up on last year.
Finally, the secret to becoming rich from shares is simple long-term investing in fundamentally sound companies, and letting steady growth and dividends power your wealth upwards.
That's why its always worth keeping abreast of what news is coming our way each week, and doing some background research on promising-looking candidates.
Achieving that near-mythical millionaire status might seem like a pipe dream, but it really is feasible for ordinary everyday investors like you and I. But if you have your doubts, read this free Motley Fool report and see if you change your mind. The report won't cost you a penny, so click here to have a copy delivered to your inbox while it's still available.
> Alan does not own any shares mentioned in this article.