TWO ELECTRIC EQUIPMENT SHARES
My recent references to the ki ordinary shares of the English Electric Company, quoted around 33s., have prompted a correspondent to put in a word for the £t ordinaries of the i Electric Construction Company, standing a few shillings higher at 37s. Whereas, he argues, English Electric has not yet begun to pay ordinary dividends, Electric Construction was able to resume distributions two years ago and for the year ended March 3rst, 1937, has just paid to per cent. out of available earnings of 24 per cent. Present yield on English Electric, nil ; yield on Electric Construction nearly 54 per cent ; ergo,• switch from Fnglish ordinary into Construction ordinary and so acquire a share which pays handsomely for its keep.
Without wishing to belittle the merits of the Electric Con- struction shares—I regard them as an excellent investment medium—I still think that English Electric will prove at least as attractive for investors seeking capital appreciation. For the current year earnings on the ordinary capital should be sufficient to cover a minimum dividend of 7f per cent. by a large margin, and the rising volume of orders in hand indicateg a virtual certainty of a further growth.of profits in .I93,11, Both companies are expanding in home and oversee markets, so that the scope for increased profits and dividends is by no means exhausted. I should regard a combined purchase of English Electric and Electric Construction ordinaries as a distinctly worth-while investment, ,a buyer acquiring a well-spread interest in the electrical equipment trade which is still expanding in response to increasing demand especially in Empire markets.
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