Burberry

Luxury brand Burberry still takes up a little over 7% of  Train’s fund despite having endured a pretty awful 2020. National lockdowns and travel bans forced it to temporarily close much of its store estate earlier in the year.

As infection levels rise again, trading will likely remain tough. Nevertheless, Train remains confident that quality will out. The growth of wealth in countries such as China (where premium Western brands remain coveted) shows no signs of slowing down. Moreover, Burberry has a very strong cash position which should allow it to recover strongly in time.

Like Train, I continue to think the £6bn-cap is worth snapping up on current weakness.

RELX

Approaching 10%, RELX is Train’s fourth-biggest holding. The company specialises in data analystics and also operates a leading global events business. Unsurprisingly, it’s the latter that’s causing investors concern.

As you might expect from someone who rarely sells (or buys!), Train doesn’t seem overly phased. This could be because the exhibitions business only accounts for a small proportion of RELX’s annual revenue and profits.

Shares have struggled to recover their mojo since March’s market crash. At 18 times forecast FY21 earnings, however, this could be a great time to load up on this quality FTSE 100 company.

Diageo

Premium spirits giant Diageo takes up another near-10% of Train’s portfolio. The fact that he’s willing to retain such a big holding despite the ongoing threat of the coronavirus coupled with a big recession is a testament to how highly he rates the company.

We’ve seen a brief recovery in the share price recently but it would be foolhardy to suggest we’re through the worst. Expect another bout of volatility as more pubs and bars are required to close across the UK. 

At least investors can enjoy the dividends in the meantime.

Unilever

Another consumer goods favourite of Train’s is also one of the biggest UK-listed stocks: Unilever. In sharp contrast to companies already mentioned, the Marmite-maker’s share price has already recovered from March’s market sell-off. And then some.

Paying through the nose for any stock isn’t recommended. Then again, it’s hard to imagine this FTSE 100 giant suffering the same fate as other more discretionary stocks if the pandemic continues into 2021. 

It won’t double in value soon, but Unilever remains a great defensive FTSE 100 pick, in my view. 

London Stock Exchange

At 10% of his portfolio, London Stock Exchange is Train’s biggest holding. One reason for this is its superb performance over the last few years. Had one bought the stock five years ago, one would now be sitting on a gain of roughly 240%. Just owning LSE since mid-March would have grown one’s cash by almost 50%. 

Shares in the £31bn-cap trade on a frothy 41 times FY20 earnings. Nevertheless, Train appears reluctant to sell. This could be because he believes there’s more volatility ahead for markets — something that should do no harm to LSE’s revenue. 

LSE is due to release an update on trading over Q3 on October 23. 

The post Wow! Nick Train has almost 50% of his portfolio in these FTSE 100 stocks appeared first on The Twelfth Magpie.

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Paul Summers owns shares of Burberry. The Motley Fool UK has recommended Burberry, Diageo, RELX, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Another good year

This morning it published a trading update that confirmed its full-year outlook is unchanged, with key business trends broadly consistent with last year’s. This puts Relx on course to deliver “another year of underlying growth in revenue and in adjusted operating profit, together with growth in adjusted earnings per share on a constant currency basis”.

Relx, formerly known as Reed Elsevier, is a global provider of information-based analytics and decision tools for professional and business customers, operating in more than 180 countries with offices in 40. It employs more than 30,000 people, roughly half in North America. This gives it a global reach and respite from Brexit uncertainties.

Organic planet

Today’s update said the group continues to focus on the organic development of increasingly sophisticated information-based analytics and decision tools, and is targeting selective acquisitions to support this. It has been active on this front, completing five acquisitions totalling £236m this year alone.

Management is also being generous with shareholders, having recently completed £250m of a £600m share buy-back, with the remaining £350m to be shared out by the end of the year.

Moving on from print

Relx has risen to the challenge of developing information-based analytics tools to counter sliding revenues from its traditional print publishing business. Its share price is up 96% over five years, against growth of just 12% on the FTSE 100 over the same period. 

When I looked at the stock in September 2017, I was a little wary of its low yield, then 2.6%, and high valuation of 20.9 times forecast earnings, and suggested this one might be best to buy on the dips.

Dividend surge

Today the yield is still 2.6%, covered twice, but as Kevin Godbold points out, the group’s impressive revenue, cash flow and earnings growth have driven an almost 70% increase in dividend payments over the past five years. This comes on top of that 96% share price growth.

Last month it suffered a blow when the University of California cancelled its subscriptions with the company’s Dutch-based Elsevier academic journals subsidiary, after it refused to make all articles published by its authors immediately free for readers worldwide.

Open access

That contract was worth just $11m in 2018, a tiny proportion of the group’s total £7.49bn revenues, the worry is that other universities will follow suit. We have seen how the drive towards free information has hit newspapers, and Relx may not be immune.

The group now trades at 18 times forecast revenues, while City analysts expect bullish earnings per share growth of 26% this year, and 7% in 2020. I’d say this is either a buy, or one for your watchlist. GA Chester has no doubt. He would buy and hold it for decades.

The post This overlooked FTSE 100 dividend and growth stock has been thrashing the index appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays, RELX, and Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In its element

FTSE 250 chemicals specialist Elementis (LSE: ELM) is making a splash this morning, its share price up 6.23% on publication of its AGM trading statement headlined “Solid start to the year, confident of further progress in 2018”. The group’s Personal Care division, which manufactures hectorite-based products for the cosmetics market, is enjoying growth across new product categories and geographies. I find this particularly encouraging because although it makes up less than 10% of the business, it enjoys higher margins.

Its Coatings operation is expanding in EMEA and the Americas, with a steady performance in Asia, while its Energy division remains solid despite strong comparatives. Chromium is recovering after exceptional weather conditions at the group’s Castle Hayne plant knocked Q1 output.

Chemicals brothers

Today’s brief statement noted that strong free cash generation continued in Q1 while net debt reduced, helped by the disposal of its Surfactants business in March. “Our financial platform is robust and supportive of future growth and continued shareholder value creation,” the £1.39bn group added.

Elementis is one of the UK’s largest speciality chemicals and personal care businesses, with extensive operations in the US, Europe and Asia. City analysts reckon its earnings per share (EPS) will grow a healthy 13% across 2018, then another 9% in 2019. By then, the yield should climb to 2.6%, which is solid but not extravagant. However, my Foolish colleague Peter Stephens recently noted that Elementis pays out just 43% of profits to shareholders, and could increase this percentage as profits grow. Today’s 2.4% yield is covered 2.2 times, which also suggests scope for progression.

However, I am not the first to spot its potential, Elementis is currently trading at a slightly toppy forecast valuation of 19.5 times earnings.

Information is power

Global information and analytics company Relx (LSE: REL) has had mixed fortunes lately, suffering a 17% share price drop in the autumn. The group was punished by adverse currency movements, a slew of broker downgrades, and worries around its scientific information division, but the response may have been overdone and investors may still have a buying opportunity here.

Relx is a subscription-driven business with a stable customer base across the scientific, legal and insurance markets, giving it strong and steady cash flows. EPS growth looks set to slow after four rampant years but should still clock in at 4% this year and 5% in 2019. By then, the yield should have climbed to a solid 2.9%. Covered two times, there is scope for dividend progression here as well.

Time to Relx

Earlier this month, management reported that year-to-date business trends remain consistent with full-year 2017, while the business is enjoying organic development, and has also completed four acquisitions totalling £668m. It completed £325m of the previously announced £700m share buyback, with the remainder due this year.

Recently patchy share price performance may suggest the company is a victim of its own success, but the sell-off has trimmed its toppy valuation to 18.6 times earnings. Relx is still a little pricey, but a better deal than before.

The post One FTSE 100 and one FTSE 250 growth stock I would buy with £2,000 today appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Elementis and RELX. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The company is a major provider of private healthcare in the United Arab Emirates, and has already seen earnings swell at a compound annual growth rate of 23% over the past half a decade. And City analysts are predicting that profits are about to pick up speed in 2018, a 45% advance currently being anticipated. An extra 23% advance is forecast for 2019.

Yet despite its proven growth credentials NMC Health can still be picked up for next to nothing. Look past a forward P/E ratio of 33.5 times and this becomes apparent, its corresponding PEG reading standing at a sub-1 reading of 0.7.

M&A mammoth

What’s more, NMC Health carries a bonus in that dividends are expected to keep growing at a stratospheric rate just like earnings. In 2018 the shareholder reward is expected to fly to 19p per share from 13p last year, and again to 24 cents in 2019. These projections yield 0.5% and 0.7% respectively.

It’s not difficult to see why the Square Mile is so bullish on the healthcare star’s profits outlook. A combination of rising population levels and personal incomes in its developing regions should lay the path for strong and sustained profits advances long into the future.

And NMC Health is investing heavily in its operations to capitalise on these fertile conditions. Thanks to a string of asset acquisitions in recent times, the number of hospital beds on its books doubled in 2017 to 1,365 from 679 a year earlier.

The acquisition hunt shows little sign of slowing. In February the Footsie firm boosted its footprint in Saudi Arabia by securing an 80% holding in the Al Salam Medical Group for an initial $37m, a deal that includes a 100-bed hospital as well as two medical centres. It also secured a 70% stake in cosmetics surgery specialist CosmeSurge for $170m.

Just RELX

Another FTSE 100 super growth stock worthy of your attention today is RELX (LSE: RELX).

Recent annual growth may not be as impressive as that of NMC Health, but the bottom line has still swelled by double-digit percentages over the past couple of years. And like the hospital provider, thanks to its decent revenues prospects on foreign shores, the Square Mile’s army of brokers is expecting earnings to continue stomping higher.

Rises of 4% and 5% are forecast for 2018 and 2019 respectively and this leads to predictions of meaty dividend growth as well — last year’s payment of 39.4p per share is expected to stride to 42.2p in the current period and to 44.8p in 2019. Yields stand at a meaty 2.8% for this year and 2.9% for next year as a consequence.

And solid market commentary released this week convince me that RELX should make good on these estimates. The information and analytics provider advised that it is confident it should “deliver another year of underlying growth in revenue and in adjusted operating profit.”

With the business also busy on the M&A front — it has made four acquisitions since the turn of 2018 for an aggregated £668m — the outlook is also bright here. I believe solid market conditions and exciting portfolio reshaping makes RELX worthy of a slightly-toppy forward P/E multiple of 18.1 times.

The post A FTSE 100 super growth stock I’d spend £2,000 on today appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Conditions in the housing market have been at their most difficult since the global recession of a decade ago, with the slowing domestic economy casting a pall over affordability for first-time buyers and thus broader homes demand.

Despite this toughening climate, construction giants such as Persimmon (LSE: PSN) continue to make splendid progress. And this can be attributed to the country’s woefully-inadequate housing stock, a problem that has worsened as economic and political uncertainty has caused existing homeowners to think twice before placing their properties on the market.

This in turn has played into the hands of the likes of Persimmon, of course, as prospective owners have instead gone hunting for new builds. Illustrating this trend, the FTSE 100 business declared last month than the number of completions leapt to 16,043 units in 2017, up 6% year-on-year.

This drove revenues 9% higher last year, to £3.42bn. And business continues to boom, Persimmon advising that “healthy customer demand for new homes through the autumn sales season” helped forward sales to leap 10% as of December 31, to £1.36bn.

Eye-popping yields

So you shouldn’t be shocked that City brokers are expecting earnings at Persimmon to continue their relentless northwards march, and expansions of 5% and 3% are forecast for 2018 and 2019, respectively, are forecast.

This marks a significant slowdown from recent years, as profits had grown at a compound annual growth rate of 25.4% in the four fiscal periods ending 2016. A 21% advance is predicted for last year. However, Persimmon’s ability to keep grinding out profits growth — allied with its exceptional cash generation — is still expected to keep dividends swelling.

An estimated 135p per share payment for 2017 is anticipated to step up to 135.4p in the present year, and again to 139.6p in 2019. As a result, Persimmon sports massive yields of 5.7% and 5.8% for these prospective periods.

The chronic housing shortage, along with ultra-supportive mortgage rates, would both appear to be here to stay for some time longer, and as a result the earnings — and thus dividend — outlook for Persimmon remains compelling. The share is not without risk, but I believe this is more than reflected in its cut-price forward P/E ratio of 9.1 times.

Another income hero

RELX Group (LSE: RELX) is Footsie-quoted share which, thanks to predictions of further bulky profits expansion, is expected to keep growing dividends at a sprightly pace too.

Supported by a 6% bottom-line improvement in 2018, a 43.1p per share payment is predicted by the Square Mile, up from the anticipated 39.8p dividend of 2017. And for 2019, a 45.9p reward is forecast, meaning the yield improves to 3.1%, from 2.9% in the current period.

Clearly these yields aren’t the biggest Britain’s blue chips have to offer. But thanks to RELX’s commitment to product development and geographic expansion (helped by selective bolt-on acquisitions like that of California-based ThreatMetrix last month), I am confident dividends should continue growing strongly along with earnings.

Besides, investors can bask in RELX’s exceptional dividend cover through to the end of next year, which sits bang on the accepted safety watermark of 2 times.

I believe investors should look past the information and analytics specialist’s slightly-lofty forward P/E ratio of 17.2 times and consider snapping it up today.

The post 2 FTSE 100 dividend stocks I’d buy with £3,000 today appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The business information provider has a knack of grinding out steady sales growth and in the nine months to September, it saw underlying revenues edge 4% higher. REXL’s decision to depart from traditional print formats and towards the fast-growing digital data services segment promises to keep turnover moving skywards as businesses become more accommodative to technological change.

What’s more, RELX remains busy on the acquisition front to boost its digital capabilities and to create future profits growth (it has already shelled out £21m in the year to date on four acquisitions).

City analysts are expecting RELX to keep on doling out double-digit earnings growth, a 12% increase being touted for 2017. A 7% predicted advance is more sedate, but still should not be scoffed at.

Dividend hero

For one, expectations of solid earnings increases are expected to keep dividends rising at a fair lick. In 2017, a handy 39.8p per share reward is expected, up from 35.95p last year, and yielding 2.3%. And the yield moves to 2.5% for next year due to an anticipated 43.4p dividend.

And RELX’s bright profits picture also leaves predicted dividends well protected, too. Payment forecasts through to the close of 2018 are covered 2 times by projected earnings, bang on the widely-accepted security benchmark.

I reckon RELX is a top-quality share worthy of a premium forward P/E ratio of 21.1 times.

A brilliant dip buy

Those seeking reliable earnings and dividend expansion also need to check out Reckitt Benckiser Group (LSE: RB) today.

Now there is no doubt that the Nurofen, Strepsils and Gaviscon maker has some not-too-insignificant troubles to iron out right now, and this is reflected in its share price performance of late (Reckitt Benckiser’s market value has eroded 15% during the past six months).

Challenging market conditions in its established markets have caused total revenues to remain under the cosh and, on a like-for-like basis, these fell 1% in the three months ending September, extending the 2% decline punched in quarter two.

But I remain confident that Reckitt Benckiser has what it takes to deliver stonking earnings growth in the years ahead. Despite current troubles in the key markets of India, Middle East and Brazil, the brilliant long-term sales opportunities of developing markets was underlined by a 3% rise in like-for-like revenues in July-September.

City brokers are expecting Reckitt Benckiser’s much-loved ‘Powerbrands’ to keep delivering the goods and are forecasting earnings growth of 6% in 2017, an impressive projection given the pressures in many of its markets.

And current forecasts suggest that profits growth will accelerate to 10% next year.

Like RELX, Reckitt Benckiser’s solid earnings outlook is expected to keep dividends sprinting higher, too. Last year’s 153.2p per share reward is anticipated to rise to 164p this year and to 179.4p in 2018, meaning that yields rock up at 2.4% and 2.7%, respectively.

I reckon the evergreen appeal of its cash cow labels, allied with its omnipresence in supermarkets across the globe, makes Reckitt Benckiser a brilliant share to buy today. A conventionally-high forward P/E ratio of 20.6 times is still good value in my opinion given its excellent opportunities for long-term profits growth.

The post 2 FTSE 100 growth shares that could make you a million appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Reckitt Benckiser. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.