Round 'em up - a few strays

Round ‘em up: It is one of those weeks when the results come faster than you can cope with, so here are brief thoughts on a few FTSE100 stocks, with dividend news, that have slipped past the bat.

I will write on BT early next week, but it looks like good baseload for income growth investors. The interim dividend was up 15% with a re-iteration of the ambition to raise the total dividend by 10%-15% in each of the 2014/15 and 2015/6 years. The 2014 starting yield of 3.4% is not startling but overall this looks good value.

Royal Dutch Shell is another company that fails to excite but has income attractions. The third quarter dividend was put up by 4.4% to 47c, so there is currency noise here for sterling investors. But in an age when resource company boards are more conscious of husbanding cash they are on course to generate enough cash to meet their target to return $30bn to shareholders over the current and next financial years by way of dividends and buy backs. If the Final is another 47c then the annual sterling dividend will be around 117p. At a 2320p share price this is a 5% yield. So it may be a corporate supertanker and the low oil price is not what they want, but with a very long record of dividend delivery and an increasing 5% yield this is another decent looking stodgy stock.

Barclays is another matter. The great project 'Transform' is designed to transform the bank from a low capital return capital markets play, with questionable historic staff ethics, into a more efficient retail and customer focused bank. It may be coincidence but the now unloved Investment Bank operations are having a poor year. At the same time the skeletons that have fallen out of the cupboard are still rattling with a new £500m FX investigation provision and a further £161m PPI provision top-up. This flow of historic bad news is clouding the progress that is being made by new-ish CEO Antony Jenkins. I am writing this before the PRA stress test results this afternoon but with a core Tier 1 of 10.2% I would expect them to clear the bar but not by much. A narrow pass would have adverse implications for future dividend growth. The interim dividend is again 1p to make 3p so far this year and on course for a maintained 6.5p for the year. Perhaps there will be an increase at the final, but I am being ungenerous. So that is a 2.9% yield at 226p, which is OK if you believe in the medium term Barclays turn-around. At this share price there is a big discount to the 287p Tangible Net Asset Value, but that probably reflects concern that there are more balance sheets hits to be taken. They might be going in the right direction but there feels little rush to invest yet. 

(Neil Cumming, 31st October)

These comments are not a personal recommendation to deal. Any investments can fall as well as rise in value, so you could get back less than you invest. I may have a financial interest in some of the stocks written about.

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