Why Stock Investors Should Look Past Falling Revenue

THE WEEK: Morningstar's columnist Rodney Hobson says he looks for revenue, profits and dividends, but the they are not all created equal

Rodney Hobson 24 August, 2018 | 12:40AM

Balfour Beatty saw the error of this path and turned itself round before it was too late

As a cautious investor I naturally prefer companies that increase revenue, profits and dividends year by year. It’s worth remembering, though, that revenue is the least important of the three.

Project manager Carillion (CLLN) spectacularly proved that chasing uneconomic contracts leads to disaster; rival Balfour Beatty (BBY) saw the error of this path and turned itself round before it was too late, living to become a respectable and improving member of my portfolio.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Balfour Beatty PLC210.20 GBX-5.23
Camellia PLC6,875.00 GBX0.36
Capita PLC24.13 GBX-6.94
Costain Group PLC34.65 GBX-2.81
G4S PLC69.92 GBX-24.26
Serco Group PLC123.00 GBX-0.57
WH Smith PLC1,010.00 GBX2.59

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.

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