Broker snap: Buy Hays for the yield, says Merchant Securities

1st Sep 2011 12:30

Merchant Securities has reiterated its positive stance on FTSE 250 recruitment firm Hays, saying "continue to buy for [the] yield".The group reported on Thursday that trading was strong across most regions in the year to 30 June, with pre-tax profit coming in slightly ahead of the broker's forecast. The results support the maintenance of the dividend at 5.8p per share covered 0.9 times by diluted earnings, the broker said."We are cautious regarding global economic growth in 2012 but Hays should fare better than its more perm-focused peers," said analyst Ian Jermin."We retain our buy recommendation on the basis of a strong yield of 7.7%," he said.The target price is left at 100p.Shares were 4.17% higher at 78.65p by 12:30.BC