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Share Centre share of the week: Marks & Spencer

Cherry Reynard
Written By:
Cherry Reynard
Posted:
Updated:
10/12/2014

Ian Forrest, investment research analyst at The Share Centre, picks Marks and Spencer as share of the week.

“British retailer Marks and Spencer continues to look at ways to reduce costs whilst remaining competitive in these challenging economic conditions. The group’s Q1 results were not as bad as feared. Despite headwinds, the company has managed headline group sales, with food sales remaining a major contributing factor to overall revenue increases. Marks and Spencer provided investors with some comfort by keeping its full year guidance unchanged.

“The 2016 PE of 11.5 is relatively low compared to peers and the dividend is forecast to return to steady growth after remaining static for a number of years. Additionally, the prospective dividend yield of 4.7% is well above the market average. We continue to believe that investors should hang on the coat tails of recovery at Marks and Spencer, as it tackles its problems in womenswear and general merchandise. Improving consumer confidence and recovering UK economy, led by domestic demand, should be supportive of future results.”