Company Notes
Br CIJSTOS
THE dock strike and bearish talk of no specific significance combined to bring the bull' market on the Stock Exchange to a temporary halt. There was some disap- pointment at the excellent report of DEBENHAMS and the meeting of GUS simply because the 'bulls' had been greedily going for more than was reasonable. The final dividend brings the Debenham's distribution to 271 per cent. paid out of earnings of 451 per cent. excluding EPL. On the fall to 46s. the 10s. shares yield nearly 6 per cent. on dividends and over 9 per cent. on earnings, which is not unattractive seeing that the company retains its strong asset position by refusing to sell its freeholds. At the GUS meeting Mr. Isaac Wolfson said that group sales in the current year were well ahead of those in the previous year. There is ground, therefore, for the market expecta- tion that the 60 per cent. dividend will be maintained on the doubled capital, for the 1953-54 earnings would be equivalent to 135 per cent. ex-EPL. The 5s. 'A' shares on the fall to 116s. would give a potential yield of 2.6 per cent. Clearly, something more is needed.
THERE has been extraordinary activity in CANADIAN EAGLE OIL which have risen to 43s. 6d. for the bearer, the highest they have been since 1947. They were as low as 28s. only four months ago. They have always been a mystery share and I have never recommended them for the non- professional investor. The Royal Dutch- Shell group, which manages the company, must have tax-saving reasons for keeping it going, but prefers to keep them secret. The company is registered in Canada, although it does no business there, and one of its subsidiaries, Eagle Tanker, is registered in the Bahamas. Other subsidiary registra- tions are being transferred to the Bahamas. Its main subsidiary, however, Eagle Oil and Shipping, which carries the group's oil from Venezuela and Colombia to the South American and British markets, is registered in England, so that that part of the Canadian Eagle dividend which is represented by Eagle Oil and Shipping profits-34 per cent. in 1953-is exempt from UK income tax. The gross equivalent of the Canadian Eagle's last dividend of Is. 6d. is, therefore, Is. Ild. (sur-tax payers, please note, are only assessed for sur-tax on Is. 6d.). Earnings in 1953 were equal to 5s. 9d. a share. At the present price of 43s. 6d. the dividend yield is only about 4.6 per cent. and the earnings yield 13 per cent. These do not compare well with the dividend and earnings' yields on Shell Transport, but the rumour which has excited the market is that Canadian
Eagle intends to pay off itg,I.:.:rs;cipating preference shares and declare a one-for-one share bonus. Anything is possible with this exotic oil company.
• A COMPANY manufacturing consumer good. which is enjoying a very prosperous year if PLATERS AND STAMPERS. It is controlled by the Ekco Products Company of Chicago( the largest manufacturer of 'houseware products in the United States, and it manes factures for export as well as the home trade a wide range of kitchen article (including pressure cookers), bathrooll, fittings and scissors. Last year was one of,
consolidation and reorganisation. AO, entire floor of one factory had been devote to defence contracts on which it had lost money. This floor had been released for the home trade by July this year and an extene sion of its Burnley factory has enabled the company to branch out into new and profitable lines of manufacture. Output has therefore been increased and overhead expenses reduced. The full fruits of the 1953 reorganisation will not be gathered till' next year but the increase in the interie. dividend from 6f per cent, to 71 per cent. indicates that the 1954 distribution will BO up from 25 per cent. to at least 30 per cent.; Earnings in 1953 were 54 per cent. The 55, shares have risen from a low point of 18s. 3d. to the present price of 30s. 6d. However, a potential dividend yield of 5 per cent. if afforded and in view of the further expansion looked for in 1955 the shares do not scce too dear at their present price.
•
WHENEVER it seems likely that the Govern' meet will be forced to spend more money oe our inadequate and dangerous roads, attention is called in the financial press to the shares of 'road making' companies. Most of them would not benefit at all froni this expenditure, for the contracts fof, trunk roads would go to the large firms of, contractors. For example, the chairman 01 NEUCHATEL ASPHALTE warned his shareholders at the meeting in July not to expect anything from the Government: as far as his company was concerned he looked for a continuance of severe competition for business. Yet his shares rose 2s. 6d. this week to 44s. to yield £4.12 per cent. on dividends of 10 per cent. paid out of earnings of 51 per cent. Of the big civil engineering contractors most give very low dividend yields but I like TAYLOR WOODROW 5s. shares at 20s. to, yield 4.1 per cent. on the assumed dividend (after the scrip issue) of 16# per cent. (covered 31 times) and ROBERT M. DOUGLAS 5s. shares at 24s. 6d. to yield 5.1 per cent. 00 dividends of 25 per cent. (4/ times covered).
Previous page
