5 Stocks Offering High Dividend Yields – HSTG, GWI, PFC, TFG, PSN

Hastings Group

Hastings Group Holdings PLC (HSTG) is a United Kingdom-based holding company with a focus across the insurance value chain. The company, along with its subsidiaries, offers general insurance products in the country, with the primary focus on the UK motor market, including private car insurance and motorbike and van insurance. It also provides home insurance and premium financing and ancillary products. The Group has two reportable trading segments – Underwriting and Retail.

Trading Update

In the first quarter of the financial year 2019, the gross written premiums were up by 4% to £235.5m, while net revenue declined by 1% to £183.1m. Despite a competitive market environment, live customer policies were up by 3% to 2.75 million. The company expects its loss ratio to move towards the higher end of the 75% to 79% target range if the current market premium and claims dynamics continue through the year, which was characterised by high third-party property damage costs and competitive motor market.

Financial Highlights (for FY 2018, in £m)

(Source: Company Filings)

Driven by higher average written premiums, net revenue grew by 6% to £756.4m. As the growth in operating expenses slowed down, due to strong expense discipline, adjusted operating profit increased by 4% to £190.6m. In FY 2018, the loss ratio was 75% in comparison to 73% in FY 2017 and remaining at the bottom of the target range of 75% to 79%. Net income increased by 3% to £148.5m, while profit after tax during the year increased by 3% to £130.6m.

Dividend

A final dividend of 9p per share for 2018 was proposed by the company versus 8.5p per share in FY 2017. Together with the interim dividend, the dividend payout ratio for the year equates to 58.8% of adjusted profit after tax against 55.5% in FY 2017. The total dividend for the year was 13.5p per share, representing an increase of 7% over the prior year. Going forward, the company said that it would increase its target dividend payout ratio to a range of 65% to 75%. As on 11 July 2019, the dividend yield of the company was 6.72%.

Share Price Commentary

Daily Chart as at July-11-2019, before the market closed (Source: Thomson Reuters)

 

On 11 July 2019, at the time of writing (before the market closed, GMT 2:40 pm), HSTG shares were trading at GBX 199.20, down by 1% against the previous day closing price. Stock’s 52 weeks High and Low is GBX 277.01/GBX 169.50. The company’s stock beta was 1.52, reflecting more volatility as compared to the benchmark index. Total outstanding market capitalisation was around £1.33 billion. 

Globalworth Real Estate Investments

Globalworth Real Estate Investments Ltd (GWI) is a real estate company that acquires, develops and manages commercial real estate assets. The company is primarily focused on office properties in prime locations in Romania and Poland, with the aim of being the landlord of choice for a variety of multinational corporations in the region. The company’s operations are differentiated in four operating segments: Offices, High street Mixed use, Residential and Other.

Financial Highlights (for FY 2018, in €m)

Driven by the full year consolidation of Globalworth Poland and an increase in revenues from properties in Romania, revenues of €192.8 million in 2018 rose by 148%. In line with the increase in revenue, Net Operating Income (NOI) increased by 161% to €133.4 million. EBITDA of €121.8 million represented an increase of 287% over 2017, while adjusted EBITDA rose by 368% over 2017 to €150.8 million. IFRS Earnings per share for 2018 increased by 130% to 60.67 cents, while EPRA Earnings per share increased by 153% to 46.03 cents per share.

Dividend

Along with an interim dividend of 27 cents per share in respect of the first half of the financial year 2018, the company paid a final dividend of 27 cents per share in respect of the second half. This resulted in a full year dividend of 54 cents per share, representing an increase of 22.7% over the last year and resulting in a dividend yield of 5.95, as on 11 July 2019.

Share Price Commentary

Daily Chart as at July-11-2019, before the market closed (Source: Thomson Reuters)

 

On 11 July 2019, at the time of writing (before the market closed, GMT 3:15 pm), GWI shares were trading at GBX 9.20 and remained flat against the previous day closing price. Stock’s 52 weeks High and Low is GBX 9.85/GBX 7.50. The company’s stock beta was 0.53, reflecting less volatility as compared to the benchmark index. Total outstanding market capitalisation was around €1.75 billion. 

Petrofac

Petrofac Limited (PFC) is a multinational company which provides a range of commercial models integrated services to the oil and gas production and processing companies to assist them in designing, building, operating and maintaining facilities. The company’s operations are differentiated in three operating segments: Engineering & Construction, Engineering & Production Services, and Integrated Energy Services.

Financial Highlights (for FY 2018, in $m)

(Source: Company Filings)

Driven by a decrease in revenue in Engineering & Construction, revenue for the year decreased by 9% to $5,829 million. Reflecting the phasing of projects in the Engineering & Construction division and product mix, EBITDA decreased by 10% to $671 million. Net profit attributable to shareholders declined by 2% to $353 million, though the net margin rose by 0.5 percentage points to 6.1%. Diluted earnings per share (EPS) contracted by 4 per cent to 102.3 cents per share.

Dividend

The company proposed a final dividend of 25.3 cents per share, taking the total dividend for the year to 38.0 cents per share, and in line with the targeted dividend cover of between 2.0x and 3.0x business performance net profit. As on 11 July 2019, the dividend yield of the company was 6.96%.

Share Price Commentary

Daily Chart as at July-11-2019, before the market closed (Source: Thomson Reuters)

 

On 11 July 2019, at the time of writing (before the market closed, GMT 3:25 pm), PFC shares were trading at GBX 417.5, down by 1.2% from the previous day closing price. Stock’s 52 weeks High and Low is GBX 679.00/GBX 376.40. The company’s stock beta was 0.60, reflecting less volatility as compared to the benchmark index. Total outstanding market capitalisation was around £1.46 billion. 

Tetragon Financial Group

Tetragon Financial Group Ltd (TFG) is an alternative asset, investment and diversified management group. The company functions with an aim to generate distributable income and capital appreciation and also providing steady returns to investors across various asset classes.

Financial Highlights (for FY 2018, in $m)

(Source: Company Filings)

At the end of the year, NAV per share total return was 10.3% for 2018, while fully diluted NAV per share was $22.48. Driven by private equity in asset management companies, net assets rose by $194.9m to $2,189.4m. Earnings Per Share (EPS) was $2.65 and return on equity was 12.1%. Reported GAAP net income for the year was $241.5m against $167.8m in FY 2017.

Dividend

Bringing the full-year 2018 dividend to 72.0 cents per share, the fourth quarter dividend was announced at 18.25 cents per share, and the dividend coverage at the end of the year was 3.7x. As on 11 July 2019, the dividend yield of the company was 5.048.

Persimmon

Persimmon PLC (PSN) is a leading British housebuilder and is headquartered in York, United Kingdom. The company designs, develops and builds residential houses, ranging from studio apartments to executive-style family homes, offering a wide range of homes across 400 locations, and operates its offsite manufacturing capabilities.

Trading Update

In the first half of the financial year, total revenue stood at £1.754 billion, a decrease from the corresponding period of the last year data. Legal completions were 7,584, due to the outcome of the customer service initiatives and later sales releases, which declined average active sites by 8 per cent in H1 FY19. Average selling price stood at £216,950. The company anticipates underlying housing operating margin of 30.8 per cent for the financial year 2018 to be a reasonable guide for H1 2019.

Financial Highlights (for FY 2018, in £m)

(Source: Company Filings)

Total group revenue for the year increased by 4% to £3.74 billion, driven by an increase in legal completions which grew by 406 new homes in 2018 to 16,449, against 16,043 in 2017. Average selling price rose by 1% year on year to £215,563 vs £213,321 in 2017. A 200bps increase in new housing gross margin to 33.3% was reported in 2018. Group’s operating profits stood at £1.083 billion, an increase of 13%, while underlying new housing operating margin increased to 30.8%, reflecting a 260bps increase. Group’s reported profit before tax increased by 13% in 2018 to £1.091 billion from £0.966 billion in 2017, while basic earnings per share increased by 11% to 283.3p. The company reported a 52.8% return on average capital employed, against 51.5% reported in 2017.

Dividend

With an interim dividend of 125p and final dividend of 110p, the company paid 235p as dividends over the year. As on 11 July 2019, the dividend yield of the company was 12.35%.

Share Price Commentary

Daily Chart as at July-11-2019, before the market closed (Source: Thomson Reuters)

 

On 11 July 2019, at the time of writing (before the market closed, GMT 4:20 pm), PSN shares were trading at GBX 1,882.1, down by 0.18% against the previous day closing price. Stock’s 52 weeks High and Low is GBX 2,523.40/GBX 1,824.70. The company’s stock beta was 0.91, reflecting slightly less volatility as compared to the benchmark index. Total outstanding market capitalisation was around £5.99 billion. 

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