July has been a very busy month for company news, with a lot of our top FTSE 100 companies reporting first-half figures. The interim season continues over into August too, when we’ll be hearing from some of our biggest in a number of sectors, particularly in banking and finance.
Here are three key dates that you might want to keep an eye open for:
RSA, Thursday 1 August
The month will open with first-half results from RSA Insurance Group (LSE: RSA), and forecasts for the full year are looking pretty positive at the moment. There’s a 25% rise in earnings per share (EPS) currently forecast, and though the dividend looks likely to be cut from last year, it should still represent a yield of around 5%. The forward price-to-earnings (P/E) ratio based on those expectations is a modest 10.5, falling to under 10 for 2014.
RSA’s first-quarter update looked pretty good, with premiums up 7% in the three months to March and net asset value up 5% to 112p per share. Total net written premiums came in at £2.3bn, with rises in all markets bar Scandinavia, which was flat — Canada led the way with a rise of 18% to £359m. At the time, chief executive Simon Lee said “I remain confident in our ability to achieve our targets for 2013 of good premium growth, a combined ratio of better than 95%, and return on equity of 10-12%“.
What’s been happening to the share price? Well, it’s been very erratic, and at 126p it’s currently around 13% up over the past 12 months, slightly lagging the FTSE. At that price, RSA is looking attractive to me relative to others in the sector — but it’s what you think that counts.
Rio Tinto, Thursday 8 August
Prospects for the mining sector have been looking slightly brighter in recent weeks, with fears of a slump in Chinese demand having been countered by upbeat noises from the People’s Republic — the Chinese premier recently suggested that growth should not slip below 7%. What that means for Rio Tinto (LSE: RIO) (NYSE: RIO.US), a Fool Beginners’ Portfolio constituent, remains to be seen, but we might get some clue when the mining giant releases its half-time report on 8 August.
Like the rest of the sector, Rio’s shares have been picking up since the start of July, though the current price of 2,959p represents zero net change over the past 12 months. On current forecasts, which currently suggest a flat year for EPS, the shares are on a P/E of under 9 with a dividend yield of 4.1%. And if the expected recovery comes along and 2014 forecasts prove accurate, the P/E multiple will drop to under 8.
The company’s second-quarter production report, released on 16 July, gave us cause for optimism too. We saw rises in production across almost all of the firm’s outputs, with crucial iron production up 8% on the previous quarter and up 6% for the half.
G4S, Wednesday 28 August
Security firm G4S (LSE: GFS) has certainly been through the wars over the past year or two, with its well-publicized problems helping sent the shares down 10% over the past year. But they have been lower, and we’ve had a mini-recovery in recent weeks. Are we looking at an oversold share and is G4S a contrarian buy at the moment?
The shares currently trade for 225p apiece and, at that price, forecasts put them on a forward P/E of about 11 for the year to December, falling to 10 for 2014. And there shouldn’t be any problem with the dividend, which is expected to yield around 4% and should be twice-covered. On the face of it that’s looking cheap, but the firm’s debt level is perhaps the biggest obstacle to a recovery — at last year-end it stood at approximately £2bn.
May’s first-quarter update told us that overall revenue grew by 7.5% at constant exchange rates, with overall organic growth hitting 6%, although margins did decline slightly. That sounds generally pretty positive, and attention will be focused on whether the trend has continued into Q2. We’ll find out on 28 August, when we should have first-half results.
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> Alan does not own any shares mentioned in this article.
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