Sunday share tip round-up: 3i Infrastructure, Eros, Aviva

18th Dec 2011 15:24

Trouble in the eurozone is far from over and interest rates in the UK are likely to stay low for some time. Funds such as 3i Infrastructure have provided a way to secure a decent yield. The funds - of which there are many - tend to invest in a variety of mature assets that have reliable cash flows and the potential for capital appreciation over time. On Friday, 3i Infrastructure added another asset to its portfolio. It is part of a consortium that has bought Swedish state-owned utility Vattenfall's electricity distribution and heat businesses in Finland for about €1.54bn (£1.3bn). (...) The shares were first tipped on December 14 last year at 121.6p and they are now at about the same price. However, this is a yield play - although there may be some capital upside over the longer term. Last year's full-year payment was 5.3p, giving an historical yield of 4.4pc - attractive given current bank rates. The dividend is likely to rise this year and the shares remain a buy for the income.Indian film production business Eros International has had a good run, as fed-up consumers turn to entertainment to escape the economy's woes. Recommended in June at 205p, the shares are 2321/2p today and the outlook is good. Operating primarily in India, the company also distributes films to Indian audiences around the world. It produces several new titles a month and has a library of thousands of old movies that are sold to television companies and DVD rental groups. Investors have earned 13% on this share and may want to bank some profits to help with the Christmas bills, but they should retain half their stock and await future developments, says The Financial Mail on Sunday´s Midas column.The largest insurer in Britain, Aviva also has significant Continental operations, including a substantial presence in Italy. Like many rivals, it has invested in euro-denominated sovereign bonds - similar to gilts but issued by eurozone governments. Aviva cannot be faulted for buying these. They were considered among the safest investments in the world until Greece, Portugal, Ireland and Spain proved that Western governments can hit the financial doldrums. Chief executive Andrew Moss points out that Aviva has been winning new business in both general and life insurance and that about half the group's revenues come from Britain. (...) Starting the year at 398p, they rose to more than 440p by March but are now down to 2851/2p. Investors should certainly not sell at current levels. This business is solid, focused and well run. It also pays an impressive dividend. Brokers forecast a 27.1p payout for 2011, putting the stock on a yield of 9.5 per cent. That is some consolation while investors wait for better times, says The Financial Mail on Sunday´s Midas column.ABPlease note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.