Shareholder perks are hard to come by these days. Once upon a time, it was quite common for companies to offer their shareholders fantastic discounts or freebies. However, these days most companies believe that the best way to reward investors is to maximise profits and pay out regular dividends.
That said, a little bit of research reveals that there still are a handful of UK companies that offer their shareholders some good deals. Here’s a look at one fantastic deal I think you should know about.
25% off food and drink
One of the best UK shareholder perk deals currently available, in my opinion, is offered by FTSE 250 hospitality group Greene King(LSE: GNK) – which owns over 2,900 pubs, restaurants, and hotels across the UK.
Every year, at the beginning of September, Greene King sends outs vouchers to those on its shareholder register who own 100 shares or more, which entitle them to a 25% discount on food and drink in Greene King’s pubs and restaurants. You receive a voucher for each month, and each monthly voucher can be used five times (for a maximum discount of £25 per visit).
The shares currently cost around £6 each, meaning that to qualify for the deal, you’d only need an outlay of around £600 (£6 x 100) plus trading commissions and stamp duty, so around £615.
If you’re a regular pub-goer, I think this is a brilliant perk. Consider this scenario….let’s say you visit a Greene King establishment (there’s enough of them not to get bored) with a group of friends every month or so and spend a total of £100 on meals and drinks. Using the shareholder vouchers, you’d be entitled to a £25 discount, bringing the total bill down to £75 – a decent saving.
Over the course of 12 months, this kind of discount could equate to £300 worth of savings. This means that, in just over two years, the shares would have effectively have paid for themselves from shareholders discounts alone.
Now, I’ll point out that it’s generally not a sensible idea to buy a stock just because of its shareholder perks. It’s always smart to consider the broader investment case. However, in Greene King’s case, the outlook for the stock looks pretty good too, in my opinion.
For example, the group advised last week that trading had been excellent over the Christmas period with like-for-like sales rising 10.9%, and that sales for the first 36 weeks of the year were up 3.2%. And just this morning, broker Liberum has added the stock to its ‘Best Ideas’ list. Yet the stock trades on a P/E ratio of just 9.5, which means there’s plenty of potential for upside.
Greene King also has a fantastic long-term dividend track record and currently offers a massive dividend yield of 5.5%, which is a fantastic figure in today’s low-interest rate environment.
All things considered, I think the shares are worth buying right now. The stock trades at a low valuation, sports a high yield, and offers investors a very generous food and drink discount.
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Edward Sheldon owns shares in Greene King. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.