Sunday tips round-up: RPC, United Utilities, Cadbury

26th Jul 2009 12:29

RPC makes rigid plastic packaging for the food, pharmaceutical and cosmetics industries. All of its products are made from oil - and this is benefiting the group on the cost front. Last year the company boosted its dividend payment by 3.3% to a total of 9.3p, this was more than most analysts had been expecting and, although it is not a massive hike in the payout, it is a reassuring move. The shares are trading on a March 2010 earnings multiple of 8.8 times, falling to 7.9 next year, which is not too stretched given the positive cost environment. Buy says the Sunday Telegraph.United Utilities shares are yielding 7.2% and trading on a March 2011 earnings multiple of 10.2 times. Water companies have been hit by concerns that regulator Ofwat's review of pricing and investment for the 2010-2015 period would be tough. The draft determination was released on Thursday and the price rises allowed are not as good as the best-case scenario, but they are not a disaster. In effect, the ruling should work out as moderate price cuts for consumers in real terms.If the final determination is not moved higher, there will be hard decision about future investments and dividends, but the Telegraph does not believe United's payouts will be slashed significantly. Even if they are trimmed, the yield will still be worth having. Buy says the Sunday Telegraph.Cadbury issues it first quarter results on Wednesday and there should be no nasty surprises for the market after a detailed trading update last month. The shares are trading on a December 2009 earnings multiple of 16.2, falling to 14.2 next year. The yield, at 3pc, is hardly spectacular but worth having. Ahead of the numbers, the stance remains buy says the Sunday Telegraph.Please 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.