Income Investors’ Results Review (17 Feb 2013)

Sunday, Feb 17 2013 by
11

I like to think of income investors as the Zen masters of investing. When the City is deafening us with noise and distraction, the income investor sits there with a quiet mind, only to wake briefly from their meditative state on results day to ask the question: “okay, so how much did my dividend go up by this time?“.

They know all of the short termism and macroeconomic navel gazing propounded by the financial pundits is of little relevance to them. They don’t care much for the “I’d better sell up, the FTSE’s a bit high now and I’ll get back in cheaper in the summer”, “Great my portfolio is up 1% today!”, “Damn my portfolio is down 1% today!”, “How is the Eurozone mess going to affect my shares?”, “What will happen to inflation and interest rates?”, “Will there be a triple dip recession?”. No, the income investor’s third eye is on the long term where everything will be just fine as long as their income keeps rising at a satisfactory rate.

Nearly 7 weeks into 2013 we have already seen a number of results announcements for the raft of 31st December financial year ends so I thought it would be a good time to have a quick review as to what’s been happening with some of the larger cap income stocks. As I jotted down a list of recent final results announcements I noticed that I had a pair in each of 4 “sectors” so I shall present them in that way below.

Consumer products (RB., ULVR)

It is generally well recognised that shares in well ran companies producing consumer products can prove to be excellent investments. Quality products and brand loyalty can create a powerful moat, enabling those companies to preserve higher margins and return on capital over the long term. Usually their global growth opportunities also offer the possibility of deploying additional capital at those high rates of return, creating long term earnings growth with, importantly, a high level of free cash flow generation at the same time. This gives the possibility to pay out dividends and invest in organic growth opportunities without the need for raising borrowings, albeit debt will often be increased as a result of acquisitions.

The world’s most famous investor, Warren Buffett, is a fan of such companies and has had great success over…

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As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. The author may own shares in any companies discussed, all opinions are his/her own & are general/impersonal. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested.


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Unilever PLC is engaged in the supply of food, home and personal care products. The Company's portfolio ranges from nutritionally balanced foods to indulgent ice creams, soaps, shampoos and household care products. The Company operates through four segments: Personal Care, Foods, Refreshment and Home Care. Its personal care segment products include skin care and hair care products, deodorants and oral care products. Its Foods segment includes products, such as soups, bouillons, sauces, snacks, mayonnaise, salad dressings, margarines and spreads. Its Refreshment segment's product includes ice cream, tea-based beverages and weight-management products. Its Homecare segment products include home care products, such as powders, liquids and capsules, soap bars and a range of cleaning products. The Company offers over 400 brands, including Lipton, Knorr, Dove, Axe, Hellmann's, Omo, Persil, Blue Band, Domestos, Wall's ice cream, Marmite, Magnum, Lnynx, Pureit and Suave. more »

Share Price (Full)
2944.5p
Change
1.4%
Mkt Cap (£m)
83,749
P/E (fwd)
20.5
Yield (fwd)
3.1

GlaxoSmithKline plc. (GSK) is a healthcare company that researches and develops pharmaceuticals, vaccines and consumer healthcare products. The Company operates in two segments: Pharmaceuticals and Vaccines, and Consumer Healthcare. The Pharmaceuticals segment develops and makes medicines to treat a range of acute and chronic diseases. Its human immunodeficiency virus (HIV) business is managed through ViiV Healthcare. GSK's Vaccines has a portfolio of over 30 paediatric, adolescent, adult travel vaccines. GSK's Established Products Portfolio includes over 50 off-patent products, as well as its branded generics business and other local products. The Consumer Healthcare business develops and markets products in four categories, such as wellness, oral health, nutrition and skin health. Its brands include Sensodyne, Panadol, Horlicks, Polident, Paradontax, Tums, ENO, NiQuitin/Nicorette, Abreva, Zovirax and Aquafresh. It operates in the United Kingdom, the United States, Belgium and China. more »

Share Price (Full)
1363.5p
Change
1.3%
Mkt Cap (£m)
66,404
P/E (fwd)
16.0
Yield (fwd)
6.0

Beazley plc is a holding company for the Beazley group, a global specialist risk insurance and reinsurance business. The Company's segments include Life, accident & health segment, which underwrites life, health, personal accident, sports and income protection risks; Marine segment, which underwrites a broad spectrum of marine classes including hull, energy, cargo and specie, piracy, aviation, kidnap & ransom and war risks; Political risks & contingency segment, which underwrites terrorism, political violence, expropriation and credit risks, as well as contingency and risks associated with contract frustration; Property segment, which underwrites commercial, homeowners', and construction and engineering property insurance; Reinsurance segment, specializes in writing property catastrophe, property per risk, casualty clash, aggregate excess of loss and pro-rata business, and Specialty lines segment underwrites professional liability, management liability and environmental liability. more »

Share Price (Full)
363.3p
Change
0.5%
Mkt Cap (£m)
1,894
P/E (fwd)
13.6
Yield (fwd)
3.6



  Is Unilever fundamentally strong or weak? Find out More »


2 Comments on this Article show/hide all

tournesol 18th Feb '13 1 of 2
3

Excellent article and very interesting blog. I look forward to spending some quality time reading it in detail.

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Miserly Investor 18th Feb '13 2 of 2
2

Hi Tournesol, thanks for the kind comments.
Regards,
MI

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