Further to my recent post about Cashing in my stamps where I sold one of my stocks on a 20x P/E and a sub 2% yield, this is where I found a more attractive P/E, yield and dividend growth combination.
It is a sligihtly strange one Hargreaves Services (LON:HSP) which describes itself as follows:
Hargreaves Services plc is a holding company. The Company is engaged in the provision of haulage services, waste transportation, mineral import, mining and processing, together with coke manufacture and related activities.
It breaksdown as follows:
| Division | T/O £m | Op. Pr. £m | Op. Margin % |
| Production | 103.2 | 16.7 | 16.2 |
| Energy & Commodities | 585.0 | 31.9 | 5.5 |
| Transport | 82.7 | 4.0 | 4.8 |
| Industrial Services | 149.3 | 3 | 2.0 |
This gives an overall operating margin of just over 5%, although in the past it has been over 7%. So probably dull enough to be on a low rating which indeed it is. According to Stockopedia it is on around 6x with a 3% yield on a 12m forward basis and has a value rank of 95 (100 = best) so it ticks the value box.
In their most recent H1 pre close trading update in December they indicated that trading was in line with their expectations and they were well placed for a strong second half. So It looks as though the H1 results due on 11th February 2014 should be OK, but will be interesting to look for any updates on demand for coking coal from their steel customers and the outlook for H2.
In last years results they made an interesting shift in their dividend policy as follows:
In view of the strong underlying performance from Continuing Operations the Board has confidence in recommending an increase of 15.3% in the final dividend from 11.8p to 13.6p. This will bring the dividend for the full year to 20.5p compared with 17.8p in the previous year, an overall increase of 15.2% for the year. The proposed final dividend will be paid on 12 December 2013 to all shareholders on the register at the close of business on 8 November 2013.
The Board believes that the Group's dividend cover remains conservative. The average dividend cover over the past three years has been set at between six and seven times. The closure of Maltby together with…
