RBC starts Close Brothers at 'sector perform'

29th Jun 2015 12:28

RBC Capital Markets initiated coverage of Close Brothers at 'sector perform' with a 1,600p price target.The brokerage said a strong brand name and prudent management of the business have delivered consistent returns over the cycle.However, growth is moderating, said RBC. "The shares are trading around our 1,600p price target, and with a current valuation near the top of the historical range, we believe potential upside may be limited," it said.Still, a reliable dividend makes Close Brothers attractive for income seekers and should support the share price, noted RBC.It said the company has a progressive but sustainable dividend policy. "For full-year 2015, we forecast a dividend yield of 3.3% for Close Brothers, which is the highest of its peer group."At 1236 BST, Close Brothers shares were down 2.8% at 1,565p.