Published On: Wed, Nov 14th, 2012

Vodafone, Bovis and Aviva are ripe for pickings say Questor

Questor have today recommended Vodafone as a buy after their slip to a 13 month low by the close of play yesterday. The stock fell on the back of the deepening concern over the stability of the Eurozone and more specifically Spain and Italy, with poor dividend’s in the US from the Verizon Wireless venture also taking their toll. The telecommunications giant owns 45 percent of the venture and now anticipates a £2.4 billion dividend, which is drastically less than last years £2.9 billion. There was also further concern over the fall in service revenues, which dipped by almost 1.5% earlier in the year. That particular piece of data does not include the revenue from Verizon Wireless however, which if taken into consideration would mean revenues would have actually risen by 1.5%. The stock is currently sitting at 163p, which Questor feels is the result of a knee-jerk reaction from the markets. With many analysts predicting a dividend of more than 14 pence next year there is still plenty of reasons to get on board. The belief is that a 10 pence dividend would be the worst case scenario but that is still an attractive 6.2% payout.

Bovis Homes have continued to rise on the back of development of cheap land it obtained in the aftermath of the crash in 2008. With house sale prices increasing by an average of more than £10,000 year-on-year and the long term nature of their product, the long term gains from this attractive proposition are too good to pass up. A rise of 1.25% today alone, in addition to the steady increase of margins within the house building sector already point towards this being a worthwhile investment.

Meanwhile Aviva, the UK’s biggest insurance company, have continued to underperform. Large investors are currently demanding change, while some shareholders have began to look for an exit. With prices dropping so drastically it will shock many to find that a 7.9% dividend is still on the cards and even with a cut to the dividend next year, many analysts are predicting around 7.7% in 2013. With Pat Regan expecting to assume the role of chief executive in the not too distant future after the removal of Andrew Moss earlier this year, the investors may get their wish — which is expected to aid the insurer in getting back to business as usual.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

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