While they have underperformed the market in the last two years, and although not cheap in terms of its forward PE multiple, the Questor team at The Telegraph believes that shares of United Utilities remain a buy. The above is due to the long-term potential of the water sector and the security afforded by the company´s dividend payments. Thus, they cite research from analysts at Citibank who are on record as having said that, "in the future, water is going to be the most important commodity of them all." As regards the latter, the company´s dividend, they highlight how United has confirmed that it plans to increase it at a rate 2% ahead of RPI inflation until 2015. The prospective yield is 5.4%, rising to 5.7% next year Questor also points out.
Meat packer Hilton Food Group offers attractive dividend returns for those investors who bought when the Questor team recommended doing so, at 160p per share, which would have allowed them to 'lock-in' a dividend yield of almost 7%. So for those who prefer income, and who also bought at those levels, holding on for the long-term is an option. However, and despite the company´s "robust" balance sheet, assets, strategy and recent expansion, growth is not easy to come by. Furthermore, the company faces cost pressures, the same as its entire industry. So, given that its shares have traded towards the upper part of their recent trading range, Questor believes that the time has come to take profits. Questor, therefore, now says sell.
Shares in low cost airline Flybe shares are cheap, at 176.5p. The company offers routes that are ill-served by the competition and plans to offer more over the coming years. The airline is not a national carrier, instead it focuses on regional routes such as Belfast to Birmingham and Glasgow to Southampton. Almost of half of Flybe's turnover comes from the short-hop business market and the company prides itself on convenience more than ultra-low pricing. Brokers believe the stock is worth at least 220p. Buy says the Mail on Sunday´s Midas column.
Pub company Marston's has been holding its own despite the tough economic background and rising food and energy prices. The company, which has 2,100 pubs, is also well known for the Banks's, Brakspear and Pedigree ale brands. For The Mail on Sunday´s Midas column, "existing investors should hold while new investors may find the current price of 104.5p appealing as supporters believe it should rise to 130p over the next year". Midas says Buy.
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Meat packaging firm Hilton Food said trading across the group's operations has been in line with company expectations in the period from July 16th 2012 to date and sees growth opportunities in domestic and overseas markets. [6 Nov '12]
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