ELECTRICAL EQUIPMENT YIELDS
It is quite a noteworthy event in these days when a profit and dividend statement, however encouraging, succeeds in raising the price of the-, shires. Evidently, the General Electric Company's figures have exceeded some expectations as the LI Ordinaries have risen from 7os. to 72s. on the strength of the 20 per cent. dividend. Profits have risen only modestly from £1,604,512 to £1,772,181 for the year ended March 31st, but I have no doubt that they have been very conservatively struck. Here are the current yields on representative equipment Ordinary shares :- Current Yield on Last
Price. Dividend%.
£ s. d.
General Electric .. 72s. 5 to 6
Associated Electrical .. 35s. 6d. 5 12 9
English Electric .. 26s. 3d. 7 13 0
Electric Construction • • 33s. 6 2 0 Superficially, at any rate, the yields look rather out of step, although I endorse the market's view that General Electric should be given the highest investment status. The high return on English Electric is the really striking feature. Partly, I suppose, it indicates the fact that this company's recovery from acute depression is only comparatively recent and partly it may reflect a view held in some quarters that a more generous depreciation allowance should be made in future years. Taking a broad view of the outlook for the industry as a whole, I feel that last year's profits may represent a peak level for the time being and that a moderate recession may be in prospect. On a longer view, however, investors should draw comfort from the fact that the secular curve of demand in this industry is definitely upwards.
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