Quality Companies Thrive Regardless of Economics

THE WEEK: Ignore the downturn in Asia, the US economy rumours, euro headlines and Brexit fears, says Morningstar columnist Rodney Hobson. Instead, stick to quality stocks

Rodney Hobson 11 March, 2016 | 12:02PM
Facebook Twitter LinkedIn

So let’s get this straight. Investors are worried about the downturn in Asia, the stalling of recovery in the United States, anaemic growth in Europe and the fragile recovery in the UK. Yet three companies with global operations reported results this week that flew in the face of this argument. It goes to show that whatever is happening in the world, a strong company can survive and thrive.

One… Shipping

Of all the companies you would expect to be struggling in this scenario, Clarkson (CKN) would rate prominently. The self-styled “world's leading shipping services group” says it plays “a vital intermediary role in the movement of the majority of commodities around the world from offices in 20 countries on six continents”.

What’s been happening with commodities over the past year? Don’t all answer at once.  Yet Clarkson managed to increase pre-tax profits from £25.2 million in 2014 to £35.8 million in 2015. A sharp rise in revenue was admittedly helped by the acquisition of RS Platou last February but there is no arguing with a 50% leap in underlying profits last year. The dividend rises from 60p to 62p – it has increased every year since 2002 and there have been plenty of global crises in that time.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Clarkson PLC3,720.00 GBP0.00
Prudential PLC1,303.50 GBP0.00Rating
Robert Walters PLC748.00 GBP0.00

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.