A UK industry to keep an eye on for your binary trading strategy
According to a recent article by the Motley Fool on AOL, two building sector suppliers, Michelmersh Brick Holdings PLC (MBH:LON) and Forterra Brick (FORT:LON, formerly known as Hanson), could well be worth investigating and speculating on.
UK Economy Outlook Uncertain
Locating companies that offer reliable yields and increasing dividends is likely to become more challenging here in the UK as 2017 progresses. With inflation around 2.3% and forecasts from the Bank of England that it is on the rise in the foreseeable future, the UK’s economic outlook is not the brightest. However, this could lead to a rising demand for higher-yielding shares, and Michelmersh and Forterra are worth keeping an eye on.
With regard to Michelmersh, it appears that they could well have a lot of room to increase dividends and at a fast pace. Their profits cover their dividends by nearly 100%. Of course, much of this will be ploughed back into the business in terms of future investment. Nonetheless, the word is that since increasing shareholder payouts by a factor of 4 in the past two years, a larger dividend payout ratio could well be forthcoming.
UK Building Industry To Buck Trend
Long-term, the UK building industry is being forecast for significant growth, despite the uncertain forecast for the UK economy in general, as Brexit negotiations loom large on the horizon. When it comes to your binary trading strategy, this industry is well worth taking into consideration.
With regard to Forterra, this year they are forecasting a record rise in their 7% bottom line by the end of 2017. Next year they are forecasting a further increase of 9%. This indicates that their current strategy is strong. With a PEG ratio around the one-mark, this bodes well for better-than-average growth, at an attractive price. Their dividends are currently yielding 4.5% – approximately 80 base points higher when compared to the yield of the FTSE-100.
Forterra’s dividends are backed-up by a profit which is 2.6 times higher. This company could well be another possibility in terms of a binary trading option.
Suitable candidates to include in your binary trading strategy?
Speculating on stocks and shares always carries some degree of risk. Companies such as these, with strong finances, in a vibrant industry might be worth taking a risk with. Long term binary trades might offer a different way to speculate on the markets. The fixed risk nature of the trades offers a basic risk management tool too.