Friday, 22 March 2019

Greene King plc and Barratt Developments

I talk to a lot of people about shares... even had a company tweet me about it recently... so let's look at a previous article and expand..

Why I think Greene King plc and Barratt Developments Plc could offer share price growth potential

I’m feeling optimistic about the prospects for Greene King plc (LON:GNK) (GNK.L) and Barratt Developments Plc (LON:BDEV) (BDEV.L)
September 11, 2017

At the time of writing, Greene King plc (LON:GNK) (GNK.L) is trading at 557p after a 15.71% fall on Friday. Could this pub giant give my wealth an uplift?

Instinctively, I feel that the market may have over reacted to Greene King’s trading statement. Like for like sales were down 1.2% compared to a sector decrease of 0.7%. The company also blamed the weather for sales. In addition, I think there could be some problems with UK discretionary consumer spend which may hurt the company’s overall performance in the near term.

Fundamentally, the share looks attractive to me now. The dividend yield is 5.98% and the good news is it is relatively well covered. Cover was 2.13 for 2017 and 2.18 for 2016. There has also been consistent dividend growth over the years, with a rise of over 3.5% for 2017 and 7.73% for 2016.

So, the shares could well be worth adding to my portfolio after their recent fall. After all, the drop has pushed Greene King to levels last seen in around 2012. Even three months ago the shares were trading around 750p. The year high is 805p. I think that while its performance may have disappointed many investors, it could be a solid long term buy and hold option for me.

Another share with UK consumer interest in Barratt Developments Plc (LON:BDEV) (BDEV.L). This company delivered strong results recently with a 39% increase in the ordinary dividend and a bumper bonus special dividend of 17.3p per share.

I continue to hold a decent amount of this company in my portfolio. At the time of writing the shares are trading at 601p after a 1.4% fall on Friday. The visible dividend yield is now 4.07% but much more when the special dividend is taken into account. The PE is 11.04. A strong ‘hold’ in my view, and one for my watchlist.

So Greene King has been doing very well overall- I'm a real talk share writer unlike most others out there... I'm up over 40% so far plus dividends...

BDEV I sold at 606p... but it's on my watchlist to buy again at the right price.

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