Today’s results show that IG was already doing well before the referendum. Full-year trading revenue rose by 14% to £456.3m, while operating profits rose by 7.4% to £207.9m.

These numbers show how profitable IG’s business is, with an operating margin of 45%. Profits grew by less than trading revenue because IG has been investing in longer-term growth initiatives, such as a retail brokerage business. It hopes to be able to attract share-trading customers as well as spread-betters.

IG’s underlying earnings rose by 8.5% to 44.6p per share last year, putting the stock on a trailing P/E of 18. IG said this morning that it will increase the total dividend by 11.5% to 31.4p per share, giving a trailing yield of 3.7%.

I continue to rate IG as a buy.

Do housing nerves make this stock a bargain?

Shares in AIM-listed home improvement group Entu (UK) (LSE: ENTU) fell by 25% this morning after the group warned that full-year results will be below expectations.

The firm says that £3.5m of costs from the closure of its solar panel business will have to be carried in the current year. However, more worrying is that £2m of central overheads formerly charged to the solar business now have to be absorbed by continuing operations. This suggests to me that the solar business may have been more profitable than the rest of the group’s operations.

These extra costs may be offset in time by new business, but today’s report warns that even though order books are full, “new commercial business streams have been slower to come through”.

As a result, Entu’s operating profit fell from £4.2m to £1.1m last year, although sales rose from £45.8m to £51.2m. The interim dividend has been cut from 2.6p to 0.5p per share.

The outlook here will depend on whether Entu can maintain its order book at stable profit margins and continue to cut costs. Although the shares will continue to look cheap even when forecast earnings are cut, they may be cheap for a reason.

Don’t be fooled by this 30% surge

Shares in troubled Kurdistan oiler Gulf Keystone Petroleum (LSE: GKP) have surged 30% higher this morning to 7.3p. Investors may be hoping for a last minute reprieve in the form of a takeover bid, but I think this is unlikely.

Reports suggest that the cause of this sudden surge of buying is that a number of large brokers and spread-betting firms are forcing short-sellers to close their positions. That has created a technical surge of buying. But it doesn’t mean there’s any fresh demand for Gulf’s stock.

Nor does it mean that anything has changed regarding Gulf’s proposed refinancing plan. Bondholders will swap $500m of debt for new shares giving them an 85% stake in the firm. Existing shareholders will be able to maintain a 15% stake in the firm, if they participate in an open offer to raise $25m at 0.82p per share.

I expect today’s gains to reverse at some point in the next few days or weeks. The shares remain likely to fall to 1p eventually, in my opinion.

The post Does recent news support a buy rating for Entu (UK) plc, IG Group Holdings plc and Gulf Keystone Petroleum Limited? appeared first on The Twelfth Magpie.

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Roland Head has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Of course, some big dividends will get cut. In today’s article I’ll ask how safe three of today’s 7%-plus yields really are.

A heavyweight gamble?

Royal Dutch Shell (LSE: RDSB) currently offers a yield of 7.7%, but there are risks facing this payout.

Current City forecasts suggest that Shell’s $1.88 per share dividend will not be covered by earnings in 2016. The payout wasn’t covered last year, either.

Shell’s acquisition of BG Group means that future earnings and cash flow are less certain than previously. However, Shell has said several times that it intends to maintain the current dividend in 2016. I think we can be fairly sure of this.

Beyond this is less certain. Shell generated $5.6bn of free cash flow, but spent $9.4bn on cash dividends in 2015. Shell can afford to fill this gap using borrowed money, but only for a year or two.

I think there is good chance that Shell will avoid a dividend cut and rate the shares a buy. But this does depend on the oil market starting to recover over the next 12 months.

Boardroom bust up = bargain buy?

A profit warning less than one year after an IPO is considered bad form. The market punished building services firm Lakehouse (LSE: LAKE) severely when it warned on profits in February, pushing the shares down by 60% in one day.

Lakehouse said that the warning was due to cost-cutting in the social housing sector. Profits for the current year are now expected to be lower than they were last year.

The outlook became even more uncertain when small-cap specialist Mark Slater, who owns 6% of Lakehouse, teamed up with Lakehouse founder Steve Rawlings to call for some of the firm’s directors to be replaced.

It’s not entirely clear why Mr Slater is doing this. But Lakehouse has confirmed that it’s trading in line with expectations for the current year. This means that the shares trade on a 2016 forecast P/E of just 5, with a prospective yield of 7.2%.

There’s a risk of further problems. But based on the available information, Lakehouse shares look cheap to me.

Safer than Lakehouse?

Entu (LSE: ENTU) is another recently-floated housing stock that crashed after a profit warning. This is why I don’t invest in small company IPOs. The previous owner often chooses to sell because they think that conditions are about to get tougher.

However, Entu’s profit warning was the result of a specific issue last year. The firm decided to close its solar division after the government slashed the subsidies available for solar panels. Many other solar installers have also been affected.

Apart from this, Entu seems to have been trading well. The good news for us, as potential buyers, is that Entu shares now trade 35% below their IPO price.

Profits are expected to rise this year, and the shares have a forecast P/E of 5.8, and a prospective yield of 9.2%!

These shares may suffer in the next housing downturn. But despite this risk, I think they look attractive at the moment.

The post How Safe Are These 7%+ Yields? Royal Dutch Shell Plc, Lakehouse PLC And Entu (UK) Plc? appeared first on The Twelfth Magpie.

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Roland Head owns shares of Royal Dutch Shell. The Motley Fool UK has recommended Royal Dutch Shell B. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.