Company Notes
THIS week, in spite of a subdued gilt-edged market, industrial equity shares again. advanced on a broad front and the Financial Times index touched a new peak for this bull movement—now twenty-two months old. The "giants" again set the pace of the advance, in particular SHELL and UNILEVER. There is talk now of the Dutch UNILEVER N.V. being quoted on the New York Stock Exchange. It will be recalled that when the news of the Wall Street quotation for Royal Dutch was circulating it was the signal for the big rise in Shell. MARKS AND SPENCER causdd some disappointment by announcing a final dividend of 45 per cent., making a total or 65 per cent. for the year. 1 must confess that when I gathered news some months ago of their remarkably good trad- ing last year—net profits rose by 22 per cent.
thought that they might increase their total distribution to 80 per-cent. This they could have done, for earnings amounted to 113 per cent. or 135 per cent. if EPL is excluded. The shares will shortly be split by the 100 per cent. bonus and If the present rate of expansion is maintained—and there is no suggestion that the company has come to the end of its new building or extension of counter space—it is reasonable to expect a higher distribution than half 65 per cent. We must wait to hear what the chairman has to say of future prospects.
IF Marks 'and Spencer can still be regarded as one of the best of "growth" investments what yield is it reasonable to expect in the market? The shares would not have fallen by 4s. to 92s. 6d. on the dividend news if it had not been for rash tipping in the Sunday Press. At the present price of 93s. 6d. the 5s. "A" shares yield about 3+ per cent. on 65 per cent. while wootwoams at the present price of 79s. 9d. yield 3+ per cent. on 60 per cent. .The comparative earnings yields are around 7+ per cent. and 6+ per cent. respectively. Clearly, the market is going for some increase in the dividends this year. If my estimate of 40 per cent. on the doubled capital is reasonable the potential yield on Marks and Spencer would be £4 5s. 6d. per cent.
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