Graham Spooner, investment research analyst at The Share Centre, explains why he is tipping St James’s Place shares as a ‘buy’…
As a leading financial services company with interests in life insurance and unit trust management, St James’s Place is our share of the week. With products including pensions, offshore products and mortgage advisory services, the company has increased its funds under-management by 22% over the last 12 months.
Investors should be pleased that the final dividend was increased 50% to 14.37p per share, which is higher than the board’s initial prediction. Another positive is that the group’s cash generation remains strong, and it is investing in its back office infrastructure to enhance its UK and overseas distribution capabilities. Those interested should also note that changes to ISAs and pension legislation in 2014 should be a positive for the group going forwards.
We are currently recommending St James’s Place as a ‘buy’. This is due to impacts from the improving UK economy, as well as the group’s expansion into Asia where it could benefit from the country’s growing middle class. We recommend this stock for investors looking to take a medium level of risk, and for those who are looking for both income and growth potential.
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