The Lemon Fool

Market cap £1.3billion
FTSE100
Dividend cover 3.2
Yield 2.56 (for some reason the FTSE site does not calculate yield rates for previous years despite have the dividend figures)
5 years of rising dividends
P/e 12
Big increase in share price over the last year
Doubled profits after tax last year to just under £900 million
Used to be called Wolseley
Listed as under Support Services

Any thoughts on this one?

Jon

I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Dod

Jon277 wrote:Market cap £1.3billion
FTSE100

It is 13 billion market cap

1.3 billion is nowhere close enough to be in the FTSE-100

- Mkt cap £13 billion.

- Yield would preclude it as a HYP candidate at ~2% ( discounting the special Divi paid as part of a share consolidation)

- Divi paid in dollars

- seem to be increasing divis at ~10% pa for the last 3 years.

- earnings fcst growth of ~4% pa over the next 3 years ( not stellar)

- debt has been increasing.. ( need to check why?)

- big plumbing company ( ) with 43 thousand employees ( but Interserve had 80k* so don't read anything into that)

"Ferguson plc distributes plumbing and heating products in the United States, the United Kingdom, Canada, and Central Europe. It offers plumbing and heating solutions to customers in the residential, municipal, and commercial sectors for repair, maintenance, and improvement (RMI), as well as new construction markets."

It's in the "Service" sector .

Dividend culled for 2 years 2009/10 ...ok. quite a while ago.

Here's the Divi history from dividenddata.

https://www.dividenddata.co.uk/dividend ... ?epic=FERG

- registered in Jersey.


* So the IRV website claimed until recently!

Dod101 wrote:I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Dod

Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

Jon277 wrote:

Dod101 wrote:I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

The problem is that "Support Services" is an ill-defined sector that can end up holding all the random stuff that won't fit elsewhere. In this context it is perhaps significant that the S&P 500 has no such sector.

This company is highly leveraged to the US housing and housebuilding sector, in the same way as the timber/lumber sector is (not that the UK has representation there).

So, do you like US housing? Why?

.p.s.

I would strongly recommend not relying on info from the LSE for yields/ cover. (I'm guessing you meant LSE?)

For yields I suggest

Dividenddata ( see link on previous post)

( I've found the dividenddata site to be very useful).

I would then look for second and third checks for financial data, perhaps using

Digital look

Morningstar

Jon277 wrote:

Dod101 wrote:I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Dod

Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

Hi Jon277

Thanks for the post - perhaps you don't choose anything from the Support Services sector as a HYP doesn't need to have a toe in each sector, just diversified enough (perhaps 18 - 20 sectors).

Cheers, OLTB.

Jon277 wrote:

Dod101 wrote:I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

Why pick anything? It is not necessary to have every Business Sector in an HYP. If the yield is not up to it, and around 2.00% is not high at all, then move on.


Ian

Lootman wrote:

Jon277 wrote:

Dod101 wrote:I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

The problem is that "Support Services" is an ill-defined sector that can end up holding all the random stuff that won't fit elsewhere. In this context it is perhaps significant that the S&P 500 has no such sector.

This company is highly leveraged to the US housing and housebuilding sector, in the same way as the timber/lumber sector is (not that the UK has representation there).

So, do you like US housing? Why?

This really falls under Strategic Ignorance surely. When HYP started there were at least 3 criteria of

Size - this share meets it
Dividend cover - this share meets it
5 year rising dividends - this share has it

Looking at that sector from what I can see only RPS is a contender but it is on a much worse P/E of 32 which isn't usually a good sign (esp compared to Ferg on just over 12).

So if you don't like Ferg in this sector what share are you choosing and why?

OLTB wrote:

Jon277 wrote:

Dod101 wrote:I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Dod

Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

Hi Jon277

Thanks for the post - perhaps you don't choose anything from the Support Services sector as a HYP doesn't need to have a toe in each sector, just diversified enough (perhaps 18 - 20 sectors).

Cheers, OLTB.

The Times only lists 16 sectors.

Jon277 wrote:

Lootman wrote:This company is highly leveraged to the US housing and housebuilding sector, in the same way as the timber/lumber sector is (not that the UK has representation there).

So, do you like US housing? Why?

This really falls under Strategic Ignorance surely. When HYP started there were at least 3 criteria of

Size - this share meets it
Dividend cover - this share meets it
5 year rising dividends - this share has it

Before considering those criteria, you should look for a High Yield

This share is Low Yield


Ian

IanTHughes wrote:

Jon277 wrote:

Lootman wrote:This company is highly leveraged to the US housing and housebuilding sector, in the same way as the timber/lumber sector is (not that the UK has representation there).

So, do you like US housing? Why?

This really falls under Strategic Ignorance surely. When HYP started there were at least 3 criteria of

Size - this share meets it
Dividend cover - this share meets it
5 year rising dividends - this share has it

Before considering those criteria, you should look for a High Yield

This share is Low Yield


Ian

Not in it's sector and with that cap it isn't from what I can see only RPS (described above) and Royal Mail have a higher yield.

Jon277 wrote:

OLTB wrote:

Jon277 wrote:
Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

Thanks for the post - perhaps you don't choose anything from the Support Services sector as a HYP doesn't need to have a toe in each sector, just diversified enough (perhaps 18 - 20 sectors).

The Times only lists 16 sectors.

I use a list of 44 Business Sectors, arranged in 10 Industry Sectors


Ian

Jon277 wrote:

IanTHughes wrote:

Jon277 wrote:
This really falls under Strategic Ignorance surely. When HYP started there were at least 3 criteria of

Size - this share meets it
Dividend cover - this share meets it
5 year rising dividends - this share has it

Before considering those criteria, you should look for a High Yield

This share is Low Yield

Not in it's sector and with that cap it isn't from what I can see only RPS (described above) and Royal Mail have a higher yield.

So what? If the share is Low Yield it is Low Yield. HYP, as the name says, is for High Yield


Ian

Jon277 wrote:

IanTHughes wrote:

Jon277 wrote:
This share is Low Yield


Ian

Not in it's sector and with that cap it isn't from what I can see only RPS (described above) and Royal Mail have a higher yield.

The Board Guidance includes:

“For the HYP Practical board we define an HYP as a portfolio comprised exclusively of ordinary shares. If selected, such shares should have a dividend yield above the average for the FTSE100 index ...”

Nor does it say you have to cover each and every sector.

viewtopic.php?f=15&t=8651

Jon277 wrote:

Dod101 wrote:I have not studied the numbers in any detail but on the face of it they look ok. This is not HYP pick though, just look at the yield and so it is completely off topic for this Board.

Dod

Well in the Support Services sector what do you think is a better pick? Because until recently that is where Interserve, Carillion an Capita sit

I would not pick anything in Support services. There is no need and this share does not even meet the basic requirement for a HYP, a high yield. End of. There was a big argument about whether Unilever met the requirements for a HYP and a mod decided it did not and it was moved to the Strategies Board. That is why I say this is off topic. It is simply not a HYP pick irrespective of any other shortcomings.

Dod

Ferg might be a good business but it's not a consideration as a HYP share simply because of the current yield.

There are plenty of candidates for HYP from the 11 basic sectors (Global Industry Classification Standard) and the subsectors.

http://www.morningstar.co.uk/uk/news/10 ... ctors.aspx

PinkDalek wrote:

Jon277 wrote:

IanTHughes wrote:
Not in it's sector and with that cap it isn't from what I can see only RPS (described above) and Royal Mail have a higher yield.

The Board Guidance includes:

“For the HYP Practical board we define an HYP as a portfolio comprised exclusively of ordinary shares. If selected, such shares should have a dividend yield above the average for the FTSE100 index ...”

Nor does it say you have to cover each and every sector.

viewtopic.php?f=15&t=8651

Hmm interesting I hadn't seen that - quite different from what was originally on the Fool