Wednesday tips round-up: Prudential, Close Brothers

11th Mar 2015 12:40

Whoever replaces Tidjane Thiam at the helm of Prudential will have a tough act to follow, but he should stick to the game plan. Since being brought on board Thiam managed to constantly confound those who doubted the rationale behind the strategic direction on which he set out. Nonetheless, he managed to grow in Asia without any deal-making. That business remitted the second most funds back to the parent company last year and the group has barely scratched the surface of the region's potential yet.The recent deal with StanChart is also going great guns. In the second half revenues from that deal rose by a third. Jackson National Life in the US is also doing well. So, while China may be slowing, the best course going forward will be to stay the course. "If it ain't broke, don't fix it," writes the Financial Times's Lex column.The long-term drivers behind Close Brothers business model continue to be in place, but the recent share price rise should lead some investors to reconsider their stance. Growth in the bank lending arm is slowing down, as the most recent figures on its loan book reveal. That comes as new challengers have been attracted into the market for lending to small and medium-sized companies. Growth in the loan book should cool from last financial year's 14% pace to between 9% and 10% this year. That support the company's dividend payments, but the rise in the stock means the dividend yield has come down to 3.6%. Despite that the shares are trading on 14 times earnings. If you bought before last summer then you might want to consider taking some profits now, says The Times's Tempus.