Prob 100p level I think could see a gradual slide back to that level from here imo |
I guess the game now is trying to read where the bottom is and therefore when to buy |
Any idea why down so much today? |
The added facet here is China/Taiwan. |
Foward consensus PE ratio of 6, 3 year average of 20. Dividend payout ratio of 16.7%. ROE 16.9%, ROCE 10.2%, CROCI 15.1%. Acquisition of leading US defence business and another in Australia. Share buy backs. Defensive. What isn't to like? |
Not having a big dividend is fine as long as the profits are used by the company in some way to expand the business to produce greater profits. I can't see much evidence of that here. Because of this I would need a bigger dividend to invest in this share |
Reasonably clear from today's announcements that test and trace is here to stay for some more months -SRP should benefit for a bit longer yet. |
I'm not interested in the dividend. |
0.8p dividend is not exceptional |
Essential
Book to Bill ratio of 190% should give you confidence about sustainability for the near term. This one is just being overlooked because of perceived value elsewhere and negative press. |
Recent results were exceptional, market questioning the
sustainability given significant earnings from COVID related contracts. |
Back to 120p ish?? |
All the way back down from 146 |
Agree, frugal dividend is holding this back imo. |
Salpara111
I wasn't implying a takeover of Serco - it was reference to the buy backs. |
Well if it isn't the divi, I struggle to understand the pretty negative reaction to what is objectively a very solid set of figures.
I do agree that at the current valuation and strength of the business there is a small possibility that someone might have a shot at a takeover. |
I don't agree with you there Salpara111. It the current climate I think it shows courage and prudence not to get caught in an over-excessive progresive dividend trap. Also there will be plenty of assets perhaps going on the cheap including Serco itself so best use/save the capital for buybacks and elsewhere. |
Support services are really out of favour at the moment, look at how Capita is doing.
I really think that Serco have shot themselves in the foot with the pathetic divi, it displays a lack of confidence going forward. |
And down it goes. This one really unloved |
As expected solid results, the only thing I find disappointing is the skinny dividend when compared to underlying earnings. |
Rimau. SRP results are a standout though.
Looks like the price is finally stirring |
Sorry, i meant “in general” support services is a dog of a sector. |
Rimau, that is not true. The average pe over the years for SRP has been 21 (see advfn financial's page). And it has been as high as 34.
So For a company that is currently growing, it is more than reasonably priced on a pe of 14. |
The issue is that Serco is in support services. Highly unlikely to achieve a rating of 15-20x in this dog sector. Anyone can to name a peer that has or had a similar rating? |
ADVFN has the 3 year ePS growth rate annualised at 20%
The 4 yr ePS growth rate annualised is 33% (source sharescope)
Meanwhile PE ratio is 13.
A correct valuation has the PE ratio roughly match the EPS growth rate.
There is a mismatch here. Not saying the PE will jump to 33 But a pe of 20 looks doable.
A medium term target of £2.15 then. |
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