We round up the Sunday newspaper share tips. This week, Midas runs the rule over Strix Group PLC (LON:KELT) and how it could benefit from a growing love of tea in countries around the world.
Meanwhile, the Sunday Telegraph takes a look at South West Water owner Pennon and the Sunday Times at oil services provider Wood Group.
Countries around the world are increasingly recognising the allure of tea, a trend that bodes well for Strix Group, the world’s top maker of kettle safety controls.
These turn off kettles when they boil or if there is insufficient water, so preventing an explosion.
Strix controls are used about a billion times a day, but there is still considerable growth potential, says Midas.
In the UK there is an average of 1.2 kettles per home and people tend to buy new ones every three years or so, so there’s recurring, reliable revenue.
Meanwhile in the US 12 per cent of homes have a kettle and numbers are rising by more than ten per cent a year.
Strix floated in August and shares, currently at 136½p are expected to rise significantly as the firm expands, says Midas.
Furthermore it has a generous dividend policy, expecting to pay out 7p a share in 2018, implying a yield of more than five per cent. Steady increases are pencilled in for 2019 and beyond.
Brokers expect pre-tax profits to go up by 16 per cent to £26.6 million this year, rising to £29.1 million in 2018. A dividend of 2.9p is forecast for 2017.
Midas verdict: The group has done well in its first few months as a listed business but the best is yet to come. Investors with a long-term view should do well out of this stock – and the dividend is an extra perk.
