Why Severn Trent Plc, KCOM Group PLC and Paragon Group of Companies PLC Should Lag The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) is in a gloomy mood today, dropping 23 points to 6,672 by mid-afternoon and wiping out yesterday’s 20-point recovery — suggesting the index of top UK shares could be headed for its fourth week of losses in a row. There’s very little big-company news today, but SABMiller and Diageo are both down on fears of a slowdown in Chinese consumption.

Which individual shares are falling in response to news today? Here are three:

Severn Trent

Severn Trent (LSE: SVT) shares have been a bit erratic of late, and dipped 23p (1.3%) to 1,762p today, after the water company released first-half results that it said are “in line to deliver full year expectations“.

Underlying pre-tax profit did fall, by 5.8% to £141.3m, after turnover rose by just 0.5% to £922.4m. But adjusted basic earnings per share (EPS) rose by 2% to 46.7p, and the interim dividend was lifted 6% to 32.16p per share — a similar rise at full-time would give us a yield of 4.6%.

The firm’s new chief executive has also been named, with Liv Garfield set to join the firm in early 2014 to take over from the incumbent Tony Wray.


Hull-based telecoms provider KCOM Group (LSE: KCOM) also suffered a dip today, with its shares down 3.1p (3%) to 102p on first-half results day.

The figures were down a bit overall, with revenue falling 1.7% to £185.5m and pre-tax profit down 5.4% to £24.7m. Adjusted EPS dropped 1.6% to 3.76p, but the interim dividend was raised by 10.9% to 1.63p per share.

Along with the results, the firm told us that as part of its development it now plans to split the roles of chairman and chief executive. Current executive chairman Bill Halbert will take the chief executive role, with independent non-executive director Graham Holden becoming chairman.


Our third for today, mortgage lender Paragon Group (LSE: PAG), lost a modest 2.6p (0.8%) to 340p on the release of full-year results.

With total operating income up 4.5% to £177.9m, the firm saw underlying pre-tax profit climb a very nice 10.5% to £104.1m with EPS up 17.4% to 28.4p. And that was enough to give the total dividend for the year a 20% boost to 7.2p per share, yielding 2.1%.

The Paragon share price is up close to 40% over the past 12 months.

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 5.5% yield and which could be set for some nice share-price appreciation, too?

All you need to do is get a copy of our 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 has recommended shares in KCOM Group.