Feb 26, 2021

Investors’ Chronicle: Reckitt Benckiser, HSBC, BAE Systems

Admittedly, Reckitt expects like-for-like sales to rise 2 per cent at the most in 2021. Investors who embrace the China-led growth story will no doubt view it as a textbook example of a value stock, too, given that it still trades at a 20 per cent discount to forecast tangible book value. The group is anticipating that its revenue will grow by between 5 to 7 per cent, with a £45bn order backlog providing visibility over 80 per cent of expected sales. BAE relies on the US for around 45 per cent of its sales but says that its portfolio is "Well aligned" with US military priorities and growth areas and doesn't expect this to change under a new administration. With the 2019 final dividend being reinstated back in July, and the 2020 final payout increasing by 4 per cent to 14.3p per share, BAE has now grown its annual dividend since 2003, and analysts believe that the payout will continue to grow over the next few years.

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