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“The FTSE 100 picks up speed after a difficult few days, rising 10 points to 7,543 thanks to gains in utility stocks and banks,” says AJ Bell Investment Director Russ Mould.
Royal Dutch Shell
“Oil producers have been waiting for more than three years for the oil price to properly regain strength and it’s now finally happened. With Brent Crude oil having reached $70 per barrel in early 2018 versus less than $30 two years ago, it’s no surprise to find Royal Dutch Shell in a much stronger financial position.
“The company saw its profit increase by 119% in 2017 to $15.76bn. It’s benefited from a double whammy of higher selling prices and the benefits of streamlining the business including more efficient operations.
“Shell’s strong performance is particularly important to investors across the country given it is a popular holding in many income funds and it is the biggest dividend payer on the FTSE 100 by total value.”
Unilever
“It’s nearly a year since Kraft Heinz made an unsuccessful $143bn takeover offer for Unilever, worth an approximate £40 per share at the time. Today the shares are trading at nearly the same level. Previous excitement about a rejuvenated business and speculation about Kraft Heinz coming back with another bid took the shares above £45 last year but they’ve been weaker of late.
“Today the business turns in a good performance with its 2017 financial results and reports a solid outlook for 2018 with guidance for 3% to 5% organic sales growth. Over the last year the company has bought back €5bn worth of shares, lifted the 2017 dividend by 12% and created a plan to saving money and boost margins.
“Although the share price has lost some of its earlier mojo, successfully executing the new plan and maintaining its track record for superior cash flow should ultimately keep Unilever shareholders happy in the long term.”
Vodafone
“Telecoms giant Vodafone has suffered a minor slowdown in the speed of earnings growth. Organic service revenue increased by 1.1% to €11.8bn in the three months to 31 December 2017 versus 1.3% growth in the previous quarter. It blames more promotional activity in some European countries.
“Perhaps more important to investors is the unchanged earnings guidance for the full year. That should provide reassurance to the large number of people who owns the shares purely for its generous dividend, currently yielding in the region of 5.7%.”
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