Business & Investment

The 7% dividend yield outlook makes me enthusiastic about the company’s stock

City analysts expect industrial service providers Hargreaves Service (LSE: HSP) Pay dividends with a yield of over 7%. This forecast covers payments for the current trading year up to May 2021 and the following year.

We also expect revenues for these two periods to grow significantly by double digits. Meanwhile, today’s semi-annual earnings report revealed that the company has disposed of its remaining coal assets for £ 24m. The year-end contract allows the company to: “”Eliminate bank borrowing. “

Fair valuation and high dividend yield

I like strong balance sheets and decent growth prospects. I think the diverse businesses that remain seem to be suitable for prosperity in a world that has recovered from the coronavirus pandemic. Meanwhile, the evaluation does not appear to be demanding.

Since the stock price is close to 270p, the future profit multiple for the trading year up to May 2022 is about 10, and the expected dividend yield is about 7.5%. The price value for tangible assets is running close to 0.7% and for Hargreaves Services this could be a good indicator to follow. Own the land..

Company “Control” With over 13,000 acres of land across the UK, we plan to make it happen “important” Value from the portfolio.One of the things the company does is to develop Brownfield and abandoned area..

But that’s not the only weapon of the business as a whole. There is a distribution and service department engaged in the processing and distribution of bulk materials such as solid fuels, wastes and minerals. The UK also has a civil engineering department working on a large infrastructure project.

What’s more, the industrial services sector provides material handling, operations and maintenance. And electrical and mechanical engineering for the UK and Hong Kong industrial sectors.

Cash-producing companions

Hargreaves Services also invests in a German affiliate called Hargreaves Raw Materials Services (HRMS).The company “”Key” Supplier of specialized raw materials “major” European customers in the steel, casting, smelting, non-ferroalloy, sugar, limestone, insulation, refractory and ceramic industries. And it was a joint venture of HRMS that acquired the coal business of Hargreaves Services.

In a report, the director explained the sale of special coal shares to HRMS. “acceleration” Realization of £ 24m cash from coal inventory. However, this deal will also help HRMS grow. “Open it” To a new market in the UK.

And HRMS contributes to the dividend income offered here. In today’s report, the company announced its intention to pay a 12-pence dividend from a German joint venture. This is compared to the 2.7p interim dividend, which may also result in the final payment for the following year.

Today’s numbers show revenue and a decline in revenue, which the company says “Impact” Delays to the HS2 rail project. But, “strong” Contract work pipeline, “good” With a bank of land opportunities “More and more valuable” Investing in HRMS.

Of course, further contract delays can occur, and the pandemic can pose even more challenges to the company’s business. If expected returns are lower than expected, valuations may become less attractive and stock prices may fall from current levels. Nevertheless, stocks seduce me.

Kevin Godbold does not have a position in any of the shares mentioned. The Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by considering different insights, Better investors than us.

The 7% dividend yield outlook makes me enthusiastic about the company’s stock The 7% dividend yield outlook makes me enthusiastic about the company’s stock

Back to top button