The Week Ahead: Lloyds and Vodafone

Published in Investing on 4 November 2011

There'll be updates from Marks & Spencer, and a whole host of others, too.

We have a lot of interim news arriving next week, as companies with years ending March and April bring us their half-time figures.

But we do also have full-year results from a small number of companies, including Associated British Foods (LSE: ABF) on Tuesday. We'd expect the company, which owns a number of well-known brands, including Kingsmill, Twinings and Pataks, to be pretty resilient during hard times. And that's exactly what we see -- earnings have held up pretty well, though the share price has been pretty flat over the last year.

This year will have brought in a small earnings rise, for a P/E of about 15 on the current 1,130p price, and we should see a dividend yield of just over the 2% mark. Solid, but certainly no screaming bargain.

More food and clothes

There will be a keenly-awaited half-time report from Marks & Spencer (LSE: MKS) the same day, which should bring us further news of the company's £600m store refit programme, announce in September.  Profits have been erratic for a number of years now, and the share price has followed suit.

With all of M&S's goods facing competition from perhaps leaner and fitter competitors -- companies like Next (LSE: NXT) in the clothing stakes, and the upmarket offerings from Tesco (LSE: TSCO), for example -- the hoped-for billion pound boost really is needed. But if it comes off, it might make today's share price look like a bargain, with the 319p price suggesting a year-end P/E of just 9 and a dividend yield of 5.5%.

And talking of supermarket competition, we'll have first-half results from J Sainsbury (LSE: SBRY) on Wednesday, and we should be looking at something unexciting but stable. With the price having fallen about 20% over the past 12 months, to the current 300p level, the City's expectations of a full-year dividend yield of 5.3% on a P/E of 11 make the shares look like decent value.

Banking updates

We'll get a couple of updates from our banks next week, with the most keenly-awaited being from Lloyds Banking Group (LSE: LLOY) on Tuesday. As with all European banks, Lloyds is firmly in the soup right now, but the question is how much of the downside is already factored in the price -- currently down to 29p.

We'll have an update from HSBC (LSE: HSBA) on Wednesday, too. HSBC has, for obvious reasons, been rather more stable than Lloyds, and is even offering a year-end dividend yield of 4.6% if City forecasts are to be believed. Are HSBC shares a bargain at 342p? Is it time to get back into banking yet? It would take someone braver than me to call that one.


Other important interims coming next week include a couple from the telecommunications business, including results from Vodafone (LSE: VOD) and Carphone Warehouse (LSE: CPW) on what is increasingly looking like a busy Tuesday.

Vodafone is expected to report falling earnings for the full year, but if it can keep to City expectations, the dividend yield should be over 6% on today's 175p price -- though it probably won't be very well covered. But we should see news of Vodafone's increasingly profitable overseas operations, and updates on its cost-cutting. The shares could well be a bargain right now.

Carphone Warehouse, meanwhile, is forecast to bring home a couple of years of rising earnings -- but there's no dividend to speak of yet, at only around 1.6%.

Notable announcements next week:

Monday: Rentokil Initial, Telecity Group, Weir, Essar, Xchanging

Tuesday: Associated British Foods, Babcock International Group, Carphone Warehouse, DCC, Kewill, Marks & Spencer, Umeco, Vodafone Group, Yell Group, First Quantum Minerals, InterContinental Hotels Group, Bovis Homes Group, Digital Entertainment, Capital & Counties Properties, G4S, Hammerson, Hardy Oil & Gas, Lloyds Banking Group, Prudential, Resolution, SEGRO

Wednesday: Fenner, FirstGroup, Flybe Group, Great Portland Estates, HSBC, J Sainsbury, SSE, Anglogold Ashanti, Talvivaara Mining Company, Playtech Ltd, Safestore Holdings, Supergroup, Admiral Group, Cape, HSBC Holdings, Legal & General Group, SIG, Tullow Oil

Thursday: Euromoney Institutional Investor, 3i Group, Canaccord Financial, Dairy Crest Group, Experian, Halfords Group, Land Securities Group, Synergy Health, Vedanta Resources, Wincanton, Canaccord Financial, Novae Group, BBA Aviation, Eurasian Natural Resources, Howden Joinery Group, IMI, Wm Morrison Supermarkets, Restaurant Group, Schroders, Trinity Mirror

Friday: Carr's Milling Industries, Hornby, Rolls-Royce Group, Spectris

Fool comment on this week's news:

> The Motley Fool owns shares in Admiral and Tesco.

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mzappa70 04 Nov 2011 , 12:44pm

what are CITY expectations on VODAFONE? What is the earning per share expected?

TMFBoing 04 Nov 2011 , 7:36pm

The most recent VOD forecasts are suggesting around 15.7p per share, which is down about 25% on last year = P/E about 11.

Consensus dividend forecasts are around 11p per share.

Foolish best,

Luniversal 04 Nov 2011 , 10:03pm

Additional trading statements:

MONDAY: Hiscox, Taylor Wimpey.

TUESDAY: Jardine Lloyd Thompson.

WEDNESDAY: Cobham, moneysupermarket.

THURSDAY: Balfour Beatty, Yule Catto.

Legal & General's Q3 report was out on Tuesday.

ANuvver 05 Nov 2011 , 12:39am

re VOD:

That's a whacking hike in dividend then. Does it mean they expect to keep Verizon's head underwater while they continually flush the chain?

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