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
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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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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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Balfour Beatty PLC235.60 GBP0.00
Camellia PLC6,550.00 GBP0.00
Capita PLC43.60 GBP0.00
Costain Group PLC51.00 GBP0.00
Serco Group PLC131.90 GBP0.00
WH Smith PLC1,311.00 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.