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Chapter 3. Where to Find Information

Company news

One of the great joys of investing in the modern era is that much of the information you need is freely available. Indeed, London Stock Exchange rules dictate that all ‘price sensitive’ information (that is, information that could affect a company’s share price) must be out in the open.

This information is disseminated almost exclusively through the stock exchange’s own Regulatory News Service (RNS), so called because it publishes information that companies are required to make public under the exchange’s regulations. This used to be the only source of announcements but in the spirit of competition other news providers are now allowed to offer alternative services. They can be identified on announcements by the three initials given for each one below in brackets.

Most companies have stuck with RNS but some use PRNewswire (PRN) and others, mainly foreign-based companies with a London listing, opt for Hugin (HUG), a European corporate communications specialist. Also authorised are Business Wire (BZW), part of Warren Buffet’s Berkshire Hathaway, and Cision (CIS), an international public relations and marketing group.

Most announcements that contain new information affecting the dividend are issued at 7 am when the market is closed and appear instantaneously on those financial websites that publish regulatory news announcements, whether from RNS or a competitor. The most important ones are results announcements and possibly trading updates. We shall look at these in more detail in the next chapter.

Less price-sensitive matters, such as setting the precise sterling equivalent of a previously announced dividend denominated in a foreign currency, may be issued at any time until the RNS service closes at 6:30 pm but usually come out during the morning.

Company websites

Your primary source of information should be the company’s own website. All official announcements made by the company must appear there. While a company may choose, in its statements, to highlight favourable rather than adverse happenings, it cannot pick and choose which announcements go on its website. They all go up there.

Furthermore, key figures such as sales, profits, earnings per share and dividends must be given for the past five years so you can see how the company has been progressing.

You will find recent annual reports, results announcements and trading updates in full on the website. Usually you will find them under a section labelled ‘Investors’ or ‘Investor relations’ or something similar.

If the company sells goods or services to the general public, the homepage will almost certainly be full of its products rather than financial information but a search around the site should soon reveal the right location. Try ‘About us’ or ‘Corporate news’.

Full, fast and long-lasting information

Not only is this the fullest information you will receive but it also has the longest life. Years after you consigned your newspaper to the recycling bin the company website will still be there.

It is also a speedy source of news, as announcements go up on the website on the day they are released, and as early as possible.

Unfortunately you cannot always be sure when an announcement will be made, although results and quarterly trading updates tend to come out at much the same time each year. The Sunday and Monday editions of newspapers carry a list of company announcements due that week, although the lists will not be comprehensive.

Any announcement usually has bullet points at the front highlighting the main points of the announcement. These bullets should give you an overview of the period covered, including the key information you want – but be wary: directors, being human, may tend to accentuate or even exaggerate the positive points and play down the negative aspects.

You should go down to the income statement and look for yourself at the figures for turnover, profits, earnings per share and dividends. One column will cover the latest reporting period and there will be a second column for the corresponding period the previous year, so you can check what progress, if any, has been made.

London Stock Exchange

One of the most important changes to the London Stock Exchange website in recent years has been the introduction of comprehensive reports on each quoted company.

Look on www.londonstockexchange.com and click on ‘Prices and Markets’ and then on ‘Stocks’. Alternatively, type ‘Company Profiles’ into the search facility. The process is a little cumbersome but you should soon get the hang of it.

You will find a five-year overview of each company’s strengths, weaknesses and financial trends.

Financial websites

Possibly the best site in terms of the amount of information easily available at no cost is InvestEgate at www.investegate.co.uk. Log on and you go straight to the current day’s UK stock market announcements. A search facility on the same page allows you to call up past announcements.

This is a particularly easy site to navigate as it is well designed and it concentrates on providing a specific range of information that is very useful for investors.

Other websites ask you to register if you want more than the brief contents of the homepage, although registration is generally free for most services. Finding your way around the sites can be daunting and the design of a site may change from time to time but take a look and see if one suits you.

Morningstar, formerly Hemscott, has the current day’s announcements in full on www.morningstar.co.uk in the Equities section, under Regulatory News. The results for all larger and many smaller companies are interspersed with Dow Jones reports providing useful interpretation of the figures.

You will need to subscribe to Morningstar’s paid-for Premium service for access to past announcements but this service does provide a good deal of other useful information, including share charts going back ten years and a comprehensive company report with figures covering turnover, profits and dividends also going back for a decade.

Other web sites with a good range of information are:

 ADVFN (www.advfn.com)

 MoneyAm (www.moneyam.com)

 Digital Look (www.digitallook.com).

Stockbrokers

Online and traditional stockbrokers will normally have their own websites. However you may need to have an account with them to gain access to information. Also the information available tends to vary enormously and research on individual companies normally has to be paid for.

Stockbrokers are geared up primarily to providing a share dealing service and you should pick one that provides the service you want at the best price rather than the one with the most company information freely available on its website.

However, one site worth noting is Selftrade at www.selftrade.co.uk which carries RNS announcements in its Market News section.

Newspapers

Even the Financial Times (FT) has insufficient room to carry reports on all the announcements made each day so newspapers cannot be relied upon to provide the comprehensive cover found on financial websites. In any case, the news is a day old by the time you read it while websites tell it as it happens.

Nonetheless, the FT, The Times, The Daily Telegraph, The Independent and The Daily Mail all provide well-written reports of major financial happenings including company results and they usually provide analysis and possibly investment advice on at least two companies.

Magazines

The two main investment magazines of interest to dividend investors are the Investors Chronicle and Shares. These are published weekly, Shares on Thursday and Investors Chronicle on Friday, and are available on newsstands or by subscription through the post.

They provide detailed analysis of selected companies and tips on shares to buy.

If you feel this would be useful, buy a copy of each and decide which you prefer. Do remember that, while both magazines try to minimise the time between writing articles and publication, there is inevitably a greater time lag than with newspapers and if you are thinking of following up a tip you should check that nothing adverse has happened at the company in the past two or three days and what the current share price is.

Summary

Our main source of information on dividends, and the first place we should look for such information, is the results announcements. The annual report is also useful, although it is on the whole mostly a confirmation of what has already been published in results for the full year. We consider what information is available and how it is presented in the next chapter.

Key points

 All price-sensitive information, including news that could affect dividends, must be released for general consumption, usually before trading starts at 7 am.

 Company news announcements may stress the good news and play down adverse factors.