Today I am looking at two income heroes that investors should buy ahead of forthcoming financials, results which could send their share prices spiralling skywards.
A reassuring trading update last time around in April could have laid the groundwork for PZ Cussons to print fresh stock price gains when full-year results are dissected on Thursday, 13 June.
After a string of profit warnings, the market was relieved to hear last month that profit estimates remained in line with those made at the time of interim results in January.
To me this suggests that what it has previously described as those “extremely challenging conditions” in its core marketplace of Nigeria may finally have stabilised. Latest economic data released this week certainly bodes well for Cussons and demand for its household goods labels from this point on, official data showing GDP in the African territory rising 2.01% between January and March. This was the best first-quarter showing for four years.
With conditions remaining solid in the FTSE 250 firm’s other territories of Asia and Europe, too, there’s plenty to be positive about ahead of next month’s release. And it’s fair to say that City analysts believe Cussons has reached a turning point, as consensus forecasts suggest that it will finally bounce back from years of sustained falls by moving back in the current fiscal year.
Bottom-line rises of 8% and 7% are predicted for the 12 months to May 2020 and 2021 respectively, and this means the number crunchers are expecting the Imperial Leather manufacturer’s long-running progressive dividend policy to be resurrected after it was scrapped in fiscal 2018.
Another 8.28p per share total payout is predicted for the year just passed, but rewards are expected to stomp to 8.5p for this year and 8.9p for the following period. Consequently Cussons sports tubby yields of 4.3% for these years, making it a very-delicious income share right now and adding to the possibility of a share price surge in the days ahead.
An undemanding forward P/E ratio of 15.7 times gives stock pickers extra reason to plough into the business, too.
I’m also tipping SThree to put across another great set of trading numbers when half-year results are delivered on Friday, June 14.
Brexit is causing huge problems for the UK economy but this isn’t throwing the recruitment specialist’s handsome record of earnings growth off course, and nor is it predicted to do so -- current City forecasts are suggestive of rises of 6% and 8% in the fiscal years to November 2019 and 2020 respectively.
The terrific progress SThree continues to make in mainland Europe and the US is allowing it to keep thriving, gross profits in these key territories booming 12% and 17% respectively in the first fiscal quarter. As a consequence I’m expecting another bubbly release in the coming weeks.
One final thing: at current prices SThree carries giant dividend yields of 5.2% and 5.4% for this fiscal year and next respectively, while it boasts a low prospective P/E multiple of 8.9 times too. Such attractive figures give additional reason for the company’s share price to stomp higher.