Why Pearson plc, Balfour Beatty plc And Kier Group plc Should Lag The FTSE 100 Today

Pearson plc (LON: PSON), Balfour Beatty plc (LON: BBY) and Kier Group plc (LON: KIE) all slip.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The FTSE 100 (FTSEINDICES: ^FTSE) has been up and down all day, first gaining about 30 points before falling to a 25-point loss — and at the time of writing, it is back up 25 points on the day to 6,269. There’s little driving the UK’s top-drawer index at the moment, in the lull between the US Federal Reserve’s last pronouncement and meetings due at the Bank of England and the European Central Bank this week.

There’s not a lot of excitement anywhere, in fact. But here, at least, are three companies from the various indices that the FTSE looks set to beat today:

Pearson

Shares in Pearson (LSE: PSON) (NYSE: PSO.US) dropped 19p (1.6%) today after the publishing giant and Bertelsmann jointly announced the completion of the merger of Penguin and Random House, to create the unimaginatively named Penguin Random House. The combined new entity, which is being billed as “the world’s leading consumer publishing company”, apparently now employs more than 10,000 people and publishes more than 15,000 titles a year.

Pearson owns 47% of Penguin Random House, with Bertelsmann owning 53%. Pearson shares have done little over the past 12 months, dropping around 8%. Even after that lacklustre 12 months, we’re still looking at a P/E of 15 for full-year forecasts, but there is at least a 4% dividend being suggested.

Balfour Beatty

Balfour Beatty (LSE: BBY) shares have had a weak year too, dropping more than 20% over the past 12 months. And today they dipped 8.1p (3.4%) to 230p after the construction firm announced the disposal of its 50% stake in the Salford Hospital PFI. The sale, to a subsidiary of HICL Infrastructure for £22m, will net the firm a gain of £11.5m, beating previous estimates of an £8.3m value.

Balfour Beatty, which disclosed net debt of £220m in its first-quarter update released in May and told us it expects further capital outflow in the second quarter, has so far realised gains of £44.9m from PFI disposals.

Kier Group

Fellow construction firm Kier Group (LSE: KIE) has seen its share price fall nearly 10% in the past year, and also saw a drop today — albeit a modest 5p (0.5%) to 1,140p. Again, the driver was the announcement of a disposal, this time of property at Bell Green Retail Park in Sydenham.

But it was a bit of an in-house transaction, with the buyer being a 50% partnership between Kier itself and the Kier Group Pension Scheme. Still, the deal did provide £46m in cash to add to Kier’s liquid assets, and generated a profit of approximately £2m.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that’s offering a 5% yield and which could be set for some nice share price appreciation too?

It’s the subject of our BRAND-NEW report, “The Motley Fool’s Top Income Share For 2013“, which you can get completely free of charge — but it will only be available for a limited period, so click here to get your copy today.

> Alan does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Investing Articles

Investing Articles

After it crashed 25%, should I buy this former stock market darling in my Stocks and Shares ISA?

Harvey Jones has a big hole in his Stocks and Shares ISA that he is keen to fill. Should he…

Read more »

happy senior couple using a laptop in their living room to look at their financial budgets
Investing Articles

How’s the dividend forecast looking for Legal & General shares in 2025 and beyond?

As a shareholder, I like to keep track of the potential dividend returns I could make from my Legal &…

Read more »

artificial intelligence investing algorithms
Investing Articles

Could buying this stock with a $7bn market cap be like investing in Nvidia in 2010?

Where might the next Nvidia-type stock be lurking in today's market? Our writer takes a look at one candidate with…

Read more »

Investing Articles

Is GSK a bargain now the share price is near 1,333p?

Biopharma company GSK looks like a decent stock to consider for the long term, so is today's lower share price…

Read more »

Snowing on Jubilee Gardens in London at dusk
Investing Articles

Could December be a great month to buy UK shares?

Christopher Ruane sees some possible reasons to look for shares to buy in December -- but he'll be using the…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

Sticking to FTSE shares, I’d still aim for a £1,000 monthly passive income like this!

By investing in blue-chip FTSE shares with proven business models, our writer hopes he can build sizeable passive income streams…

Read more »

Growth Shares

BT shares? I think there are much better UK stocks for the long term

Over the long term, many UK stocks have performed much better than BT. Here’s a look at two companies that…

Read more »

British Pennies on a Pound Note
Investing Articles

After a 540% rise, could this penny share keep going?

This penny share has seen mixed fortunes in recent years. Our writer looks ahead to some potentially exciting developments in…

Read more »