Tuesday tips round-up: Petrofac, Bunzl, G4S

25th Aug 2009 05:53

Petrofac once again defied all expectations with its interim results yesterday. Cautious investors will rightfully wonder whether it is time to book profits. The Independent thinks not; besides the convincing earnings story - forecast upgrades are likely to be forthcoming in light of yesterday's update - investors stand to benefit from the group's decision in March to hike its dividend payout ratio to 35 per cent from 30 per cent. On Cazenove's estimates, the yield rises from 2.2 per cent for 2009 to 3.3 per cent for 2010 and 3.5 per cent for 2011. Buy.The Telegraph adds that the company is a long-term play on growing global energy demand and structural investment in the key oil markets of the Middle East.Consumables distributor Bunzl posted a reassuring interim update yesterday, its shares underperformed in the first part of this year. The shares are now trading on as December 2009 earnings multiple of 11.1 times and yielding 3.6pc. The stance on the shares remains buy, says the Telegraph.G4S makes a clear case for growth in the second half of the year and beyond. It does not claim to be recession-proof, but it is defensive in nature. To those worried about a reduction in government spending, the chief executive, Nick Buckles, answers that instead of cutbacks, outsourcing to the private sector is more likely in tougher times.Add to the mix the dividend yield - Collins Stewart estimates that it will rise from 3.6 per cent in 2009 to 4 per cent in 2010 and to 4.6 per cent in 2011 - and it appears too hasty to sell the shares. Still, given the worries in some quarters and the steady performance in recent months, it also appears too optimistic to buy. The Independent says hold.Good Energy, with a market cap of around £3m, is a tiny player in the UK's electricity market. Its shares, traded on Plus Markets, are illiquid and often volatile. Still, this is a profitable company, with little in the way of debt, and it operates in a growth market. A takeover is always a possibility, and at 11 times earnings, the market is not overrating these prospects. Buy, says the Independent.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.