Why Severn Trent Plc, easyJet plc and Dunelm Group Should Lag The FTSE 100 Today

There’s not a lot happening to the FTSE 100 (FTSEINDICES: ^FTSE) today, ahead of the next pronouncements from the Bank of England and the European Central Bank, with low trading volumes sending the index up just 21 points to 6,753 by mid-morning. That’s a gain of four points since the start of the year — not a lot so far, but the direction is just fine.

Who’s doing badly today? Here are three from the indexes that are slipping:

Severn Trent

Severn Trent (LSE: SVT) has been hit by the rough weather, telling us it has been faced with around a third more work than usual due to floods.

On top of that, a broker downgrade from JPMorgan Chase has helped push the share price down this morning. After the firm lowered its price target for Severn Trent from 1,680p to 1,535p, the shares dropped 44p (2.6%) to 1,659p.

The price is now up only around 5% over the past 12 months. Though forecasts put the shares on a P/E of a relatively high 20, there’s a 4.7% dividend yield expected and utilities dividends are amongst the most reliable.


Whenever a passenger statistics update comes along, the usual result is a rise in the easyJet (LSE: EZJ) share price — but not this time.

In December the budget airline saw a 3.5% increase in passenger numbers over the same month a year previously, with the planes’ load factor remaining unchanged at 87.9%. Over a 12-month rolling period, passenger numbers are up 3.6% and that load factor has grown from 88.9% to 89.3%.

The share price? Down 18p (1.1%) to 1,579p — but still up nearly 90% over 12 months.

Dunelm Group

A first-half trading update from Dunelm Group (LSE: DNLM) displeased the punters today, and sent the soft furnishings retailer’s share price down 27p (2.8%) to 952p.

Total sales grew by 4.8% over the first half a year ago, to £356.3m. But like-for-like sales fell by 0.9%, although that was blamed on a poor first quarter affected by unseasonal warm weather, with like-for-like sales picking up 2.9% in the second quarter. Profit for the half is estimated at approximately £61.5m.

With strong earnings forecasts for 2014 and 2015, Dunelm shares have gained nearly 35% in 12 months, but that does put them on a forward P/E of 22.

Finally, one way to beat share price shocks is to focus on dividends. If you want to learn how to identify great long-term dividends yourself, have a look at the new Motley Fool report "How To Create Dividends For Life", which gives you 5 Golden Rules for Building a Dividend Portfolio.

It's completely free, so click here to get your copy while it's available.

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