Cash Cow30 Jun 2016 18:20
Cash cow still delivering
Shares in SSE (LSE:SSE) dipped quite sharply in the wake of the Brexit result, though they've pulled back most of the loss to reach 1,505p as I write. The drop seemed bizarre, as SSE only does a tiny fraction of its business in Ireland and mainland Europe -- about 3% of turnover in the last full year. The firm promptly issued a statement saying the exit "presents no immediate risk" to its operations, though it did raise the risk of uncertainty over the regulatory framework within which it works.
SSE looks a safe Brexit bet to me, and at the shares' post-vote low point you could have tied in a forecast dividend yield of 6.6%! As it stands, there's still a 6% yield on the cards, with 6.1% pencilled in for 2017, as EPS looks set to remain pretty much level.
SSE's current share price is only around 13 times forecast earnings for this year, and for a company with such high and transparent dividend payouts, that looks cheap to me.