The season for FTSE 100 companies reporting first-half results to the end of June is pretty much over, and we have a fairly quiet week for FTSE 100 news ahead of us. But we do have a couple of important updates coming, which you might want to keep an eye open for.
Here are two from the top tier and one large FTSE 250 company set to bring us tidings:
Hargreaves Lansdown, Wednesday 4 September
Wednesday is the day for final results from investment services firm Hargreaves Lansdown (LSE: HL), and we should be in for a pretty successful year. Back in February we heard of a 24% rise in first-half revenue to £140.3m and a 30% rise in pre-tax profit to £93.7m, both setting new records for the company. Assets under management were up 30% to £30.4bn, and the interim dividend was lifted 24% to 6.3p per share.
And if that wasn’t impressive enough, by the nine-month stage reported in April, assets under management had reached a record £35.1bn, up another £4.7bn in the third quarter. And year-to-date revenue was maintaining the earlier 24% gain. For the full year, City analysts are expecting a rise in earnings per share of around 30% and a hefty 66% boost to dividends — though that would only yield 2.6%.
The low dividend yield is a result of the share price soaring. Over the past 12 months it’s up around 60% to today’s 997p, and it has seven-bagged since late 2008.
Ashtead Group, Wednesday 4 September
Our FTSE 250 representative, Ashtead (LSE: AHT), is scheduled to release a first-quarter update on Wednesday. The equipment rental firm put in a pretty powerful set of results for the year ending 20 April, with revenue up 19% to £1.36bn and underlying pre-tax profit up a remarkable 87% to £247m. Underlying EPS gained 80% to 31.6p, and the firm declared a total dividend of 7.5p per share — that was more than twice the previous year’s 3.5p, but represented a yield of only 1.3%.
Can Ashtead improve on that? Well, the current consensus seems to suggest it can, with a 26% rise in EPS and an 8% dividend boost currently forecast, though a strong share price should drop the yield slightly.
At 642p the share price is around 130% up over the past 12 months, though it was a little higher in July before the FTSE started falling back.
easyJet, Thursday 5 September
It’s time for August traffic statistics from easyJet (LSE: EZJ) on Thursday, and what usually happens is that the budget airline announces better-than-expected figures and the share price surges further. But things were different with the release of July statistics last month — though the actual number of passengers rose 2%, the load factor dropped from 92.5% to 91.6%.
And the wheels have come off the share price growth a little since then. After peaking at 1,465p on 5 August, the price has since lost 16% to today’s 1,235p. It is still up 130% over the past 12 months, but it does show what can happen when a popular growth company comes in a shade behind optimistic expectations.
On a P/E basis the shares aren’t looking obviously too expensive, with a forward multiple of under 14 based on a full-year forecast for an EPS rise of 48%. That’s a little behind the FTSE’s long-term average of about 14, but some will see it as too high for a high-risk business like an airline, especially when it’s only paying a 2.4% dividend.
Finally, do you like having your investment returns boosted by dividends such as these? Dividends can be spent or reinvested according to your needs — whether you’re investing for income or growth, good old cash is always welcome.
And that’s why I recommend the BRAND-NEW Fool report, “The Motley Fool’s Top Income Share For 2013“, in which our top analysts identify a share that they believe will provide handsome dividend income for years to come.
But it will only be available for a limited period, so click here to get your copy today.
> Alan does not own any shares mentioned in this article.
