Cyprus Internet Directory Jobs In Cyprus
  Cyprus Internet Directory Search       
Google Search
  
Cyprus Internet Directory Search
  
Cyprus Comming Events    Cyprus 
Events 
   
Cyprus News Articles    Cyprus News 
and Articles
   
Cyprus Guide    e Guide
to Cyprus
  
Quick Links


By Peter Stevenson MEMBERS of Volunteer Doctors Cyprus have treated around 350 people at their free clinic in Nicosia since it opened three months ago, while two more, one in Paphos and one in Polis are due to open today. Limassol also has a free clinic, which was opened only last month, and plans have been drawn ...
Read More

SOME 10 days ago, foreign minister Ioannis Kasoulides raised expectations by announcing the possibility of a deal with Turkey for the opening of the fenced off area of Famagusta, for the return of its inhabitants. In exchange the Cyprus government would agree to the opening of Tymbou airport to direct flights. ...
Read More

By George Psyllides PRIVATE auditors have expressed doubt the electricity authority (EAC) could be considered a going concern and have asked its board to draft a credible plan to tackle the problem, according to the auditor-general’s 2012 report on the semi-state company. Among other issues, ...
Read More

  
Cyprus Internet Directory [ Barclays Wealth prefers high yield stocks ]

Barclays Wealth prefers high yield stocks

Barclays Wealth prefers high yield stocks
November 19, 2008

Economic news remains almost unrelentingly grim and the media has now moved its focus on from the credit crunch to the recessionary impact on the economy, but analysts at Barclays Wealth (BW) say it is worth remembering that there are some investment strategies that equity investors can employ to improve the chances of their portfolio weathering the current turmoil reasonably unscathed – at least as far as performance relative to the wider market benchmarks is concerned.

A few weeks ago we looked at lessons from past recessions and showed that, in general, ‘value’ styles of investment generally outperform in the run up to recessions, while ‘growth’ stocks outperform in the period after. As we noted, there are a few exceptions to this rule but generally it seems to hold true. One style we didn’t discuss was income, and specifically the fact that income investing has outperformed in the last three bear markets.

While income investing may seem like an obvious choice in the current climate, it is worth remembering that what looks like an attractive level of dividend income today may become somewhat less compelling should the dividend be cut – or passed altogether. Indeed, while bellwether stocks such as BT trade on an estimated 2009 dividend yield of around 12%, that payout looks rather less enticing if a 50% dividend cut is factored in (something which we deem to be a reasonable assumption in BT’s case given the risk of increased funding requirements for its pension scheme).
So, recognising that income stocks usually outperform in a downturn but at the same acknowledging that many companies will either cut their dividends or simply forego them altogether, we have screened across our UK and European analyst portfolios and identified a number of companies where we believe the likelihood of a dividend cut is minimal.

The results of this screening identify what could be called the ‘usual suspects’, i.e. companies with generally low levels of gearing, well-protected earnings streams and high levels of dividend cover, as well as attractive levels of income. However, as well as looking at these characteristics, we have sought to refine the list further by identifying stocks with decent total return prospects and at least some upside to our fair value estimate. The news here is encouraging, as our analysis suggests that some of the stocks offer very good return potential, at least for those investors who are able to ride out some short-term volatility.

Barclays Wealth analysts say in one of the more traditionally defensive sectors, pharmaceuticals, AstraZeneca stands out as offering earnings and dividend dependability and some price upside. In telecommunications, Vodafone also trades below our estimate of fair value and offers an estimated 2009 dividend yield of 6.6%. The bottom line is that there are number of companies that still offer good price upside and decent, relatively secure dividends – characteristics that we believe will be in demand in the coming months, especially if macroeconomic news continues to worsen and equity market sentiment deteriorates further, add Barclays Wealth analysts.

Of course, income stocks are not without their own risks – some, such as BP and AstraZeneca, pay their dividends in dollars, so foreign exchange (FX) is another consideration as some investors will not want to incur any FX risk. But overall, high-yielding stocks with well-covered dividends and strong levels of interest cover should provide better returns through the downturn than most.


(Source: Financial Mirror, http://www.financialmirror.com/News/Cyprus_and_World_News/12709)



Article Options

Email to a friend Email To A Friend     Print Article Print Article     Add Article To Favorites Add Article To Favorites




  

Other Related Articles


Cyprus News Article Submission

If you have an article and you wish to submit it to our database please send us an email. In your email subject quote "Article Submission" and attach the article to the email. To email us Click Here

Cyprus Holiday Villas-Investment Properties

A wide range of holiday villas, investment properties, building plots and apartments in Cyprus for sale by owner. Save money on your holiday villa in Cyprus and enjoy the holiday feeling for ever.