Thursday tips round-up: Dignity, Legal & General
There are few things in life as certain as death, which gives funeral parlour operator Dignity exceptional visibility. So while the number of funerals dropped by 3.5% last year, the company is now set to benefit from the 23% rise in deaths registered over the first eight weeks of this year. In 2014 unfulfilled pre-arranged funeral plans grew by 25,000 to 384,000, providing a secure pipeline of future business.
Dignity
549.00p
16:45 24/05/23
FTSE 100
7,952.62
17:14 28/03/24
FTSE 250
19,884.73
17:14 28/03/24
FTSE 350
4,383.21
17:14 28/03/24
FTSE All-Share
4,338.05
16:50 28/03/24
General Retailers
4,075.15
17:14 28/03/24
Legal & General Group
254.40p
17:05 28/03/24
Life Insurance
6,048.60
17:14 28/03/24
Furthermore, the large number of independently-owned parlours in the UK means it has space to grow, given its financial resources. The statutory pre-tax loss it saw last year was a function of the costly debt refinancing it carried out in order to return £64.4m in funds to its shareholders. So ‘hold’ on to your shares in the 200-year old business, says the Daily Telegrah’s Questor column.
Insurance and asset management group Legal &General provides investors with a reliable source of dividend income, thanks to the transparency of its business and predictable cash-flows. While the different parts of the business are moving at different speeds the company continues to be a dependable cash generator, up by 10% last year to £1.1bn.
In the last five years the dividends have almost tripled, increasing by 21% for 2014 to 11.25p. The pay-out looks set to improve by another 15% this year. The current dividend yield stands at 4.2% and may increase to 4.8%. 'Buy', says The Times’s Tempus.