3 dates for your July investing diary (Centrica plc, PZ Cussons plc and Premier Oil plc)
It's been a tumultuous June for investors, that's for sure. But a hopefully calmer July is set to bring us some key news from some of our top companies, so what should we look out for?
Recovering oil prospects
On 7 July, we'll have a trading and operational update from Premier Oil(LSE: PMO). The company's previous update in May told us that full-year production was set to come in at the upper end of guidance after the completion of Premier's acquisition of E.ON's North Sea assets in April, and I don't expect to see any significant change from that in July.
The big issue is Premier's debt, which stood at $2.2bn at 31 December 2015, but by May the firm told us it still had undrawn bank facilities of around $750m and was talking to lenders about a potential covenant waiver should that be required. That's going to be something to look for in the next update, and I'd hope lenders would be flexible now that oil is up around the $50 mark.
The Premier share price has dipped slightly since the Brexit vote, but not significantly in the long-term scheme of things. And at 72p it's up 250% since January's low.
On 26 July we're due full-year results from PZ Cussons(LSE: PZC), the maker of Imperial Leather and a number of other cleaning and toiletry brands. For the year ended May 2016, the City's analysts are expecting a 4% drop in EPS, though they have modest rises pencilled-in for the next two years. Dividend yields at around 2.5% aren't high but are well-covered and progressive.
The trading update on 9 June told us to expect cash generation in line with expectations, with performance in all markets (UK, Europe, Asia and Africa) all expected to be satisfactory, though there should be an exceptional £17m charge relating to a liability in Nigeria.
My verdict? A safe investment, but with the shares on a P/E of more than 18 and with those low dividend yields, no great bargain and nothing to excite me.
Safety in dividends
My third pick is Centrica(LSE: CNA) whose first-half results should be with us on 28 July. The operator of the British Gas and Scottish Gas brands and a long-term stalwart of dividend investors saw its shares drop in the immediate aftermath of the EU referendum, but they've subsequently come right back.
There's a 13% drop in EPS expected for the full year and I don't expect interim figures to change that to any great degree -- forecasts have dropped from where they were six months ago, but they're stabilising. Back in April, an update from the company predicted full-year adjusted operating cash flow above £2bn, with overall capital expenditure of no more than £1bn. We should be looking for an update on that and it does suggest there'll be ample cash to cover the forecast 5.7% dividend yield this year.
I see Centrica as a proven cash cow that income investors should seriously consider.
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Alan Oscroft owns shares of Premier Oil. The Motley Fool UK owns shares of PZ Cussons. The Motley Fool UK has recommended Centrica. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.