Reckitt Benckiser Group (LSE: RB) (NASDAQOTH: RBGLY.US) shares have had a mixed ride — they’re up around 11% over 12 months to 4,656p, against a 3% rise for the FTSE 100, but it’s been a bit volatile.
The company was seen as something of a safe haven back in recession time, and its earnings were going strong — in 2009, we saw a 24% rise in earnings per share (EPS). But that growth has been slowing, down to just 7% by 2012. And analysts are actually expecting a modest fall of 1% for the year just ended in December 2013, with the same penciled in for 2014.
Results next week
Whether they’re right is something we shall find out on Wednesday 12 February, when we’ll have those 2013 results. But how has the year been going so far?
In third-quarter results released in October 2013, the owner of an array worldwide consumer brands reported like-for-like revenue growth of 5% for the quarter and the same for the year-to-date, excluding its pharmaceuticals business (RBP). Chief executive Rakesh Kapoor told us that the firm’s focus on health and hygiene and emerging markets was “delivering good results“.
And of RBP, he said “…we are commencing a strategic review of the business and will consider all options for maximising value for our shareholders. We expect the review to take some time and will update shareholders during the course of 2014“.
Prospects?
What of the full-year? Well, Mr Kapoor used that nasty “challenging” word when describing market conditions, but predicted full-year revenue growth of at least 6% with margins expected to be maintained.
Looking back further, statutory first-half EPS reported in July 2013 dropped 14% to 90.4p, though the company claimed a 7% rise to 118.3p for adjusted EPS. Like-for-like revenue at the time was up 6%, excluding RBP, with adjusted operating profit up 2% (though statutory operating profit fell 17%).
Looking at the spread of analysts’ opinions in the light of the year so far, I think Reckitt Benckiser’s 2013 EPS could be anywhere in a range of a few percent down to a few percent up.
Dividends
But what about dividends? Reckitt Benckiser traditionally provides a fairly average annual yield of a little over 3%, though it did rise a bit above that in the past couple of years as the share price fell back a little.
There’s a modest 3% rise in the 2013 dividend expected, to take it to about 138p per share for a yield of 3%. But the first-half dividend was lifted by 7% to 60p per share, so if anything that could be a bit conservative — in fact, the most recent forecasts are suggesting around 140p per share.