Why Capita PLC, CRH PLC And MITIE Group PLC Should Lag The FTSE 100 Today

Capita PLC (LON: CPI), CRH PLC (LSE: CRH) and MITIE Group PLC (LSE: MTO) all slip.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 (FTSEINDICES: ^FTSE) has started weakly today, dropping 16 points to 6,568 after weaker-than-expected GDP figures from Japan knocked some of the shine off last week’s news of rising factory output from China. European markets opened lower too, as we await the latest figures from the eurozone economies.

A number of FTSE companies have seen their prices fall today. Here are three that are failing to keep up.

Capita

Shares in outsourcing and recruitment firm Capita Group (LSE: CPI) dropped 9p (1%) to 1,008p this morning, despite the news that it has been appointed as a servicer to Ireland’s National Asset Management Agency. The contract will commence this month, and should be worth around €80m (£69m) over the next four years.

Though down a little today, Capita shares are up 40% over the past 12 months. But that has driven the forward P/E, based on forecasts for the year to December 2013, up to 18, and there’s only a modest dividend yield of 2.5% expected. Still, Capita has shown healthy earnings growth over the past five years, and more of the same could justify a high rating today.

CRH

Buildings materials group CRH (LSE: CRH) announced an acquisition in India this morning, but that led to a 23p (1.6%) share price fall to 1,448p. My Home Industries, a joint venture owned 50% by CRH, will acquire Sree Jayajothi Cements for an enterprise value of 14 billion rupees (€175m), with the deal being financed through a combination of debt and equity.

CRH shares are up almost 20% over a year, but we have seen very erratic earnings in recent years, and forecasts put the shares on a forward P/E of 21 with a dividend yield of 3.7%.

MITIE

It’s a poor day for outsourcing companies today, with MITIE Group shares losing 6.7p (2.4%) to 269p, even though a trading update this morning told us the firm “has made a positive start to the year” and that it “continues to see good opportunities across its markets“. In fact, of the revenues budgeted for the current financial year, 89% had already been secured by 30 June.

With the shares flat over the past year, forecasts put the shares on a P/E of 11. But the key attraction of MITIE is its dividend — it’s been steadily rising for years, and is predicted to be up again this year for a yield of 4% — and it should be more than twice covered.

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 For 2013” — it’s completely free of charge, but it will only be available for a limited period. Click here to get your copy today.

> Alan does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Investing Articles

Up 670% in 2 years! This former penny share is skyrocketing on SpaceX contracts

Shares of Filtronic (LON:FTC) were soaring to multi-year highs today after another contract win with SpaceX. Should I buy this…

Read more »

Investing Articles

Why is the Greatland Gold (GGP) share price up 10% today?

Our writer looks at the reasons why the Greatland Gold (GGP) share price is the AIM 100’s best performer today.

Read more »

Passive income text with pin graph chart on business table
Investing Articles

What do I need for a passive income of £100k a year?

How much would I need to invest to collect a very healthy yearly passive income on my retirement? Surprisingly, the…

Read more »

US Stock

£2k invested in Nvidia stock 2 years ago is now worth this boggling amount…

Jon Smith details how much unrealised profit an investor would have from buying Nvidia stock but is cautious about what…

Read more »

Investing Articles

2 value stocks that still look cheap despite the FTSE rally!

Harvey Jones picks out two UK value stocks that still look nicely priced even as the UK index climbs. He…

Read more »

Dividend Shares

I asked ChatGPT to build the perfect passive income portfolio and here’s the result

Jon Smith turns to the world of AI to try and find out whether ChatGPT could build an investor a…

Read more »

Investing Articles

£20,000 to invest? Here’s how the FTSE 100 could deliver a £2,040 passive income

Here are two ways that investors with a lump sum to spend could target a large passive income with FTSE…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Here’s how someone could start investing in 2025 with just £1,000

Planning to start investing in 2025? This writer highlights two very different stocks that might be worth considering for a…

Read more »