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My shares to watch in 2017 are a diverse bunch. There is a recovering pharmaceutical giant, two companies with overseas interests capable of delivering dividend growth and two UK-focused businesses, one of which could be set for continued growth if the economy remains resilient, and the other a more defensive option.
Some will be looking to build on a strong 2016, while others are seeking to make up lost ground. Remember past performance isn’t a guide to future returns, and bear in mind all yields quoted are not an indicator of future income.
Experian has continued to deliver consistent mid-single digit revenue growth. That’s despite competitive pressure in the US and UK consumer businesses, and a prolonged recession in Brazil (which accounts for 88% of Latin American revenues). It has also consistently returned capital to shareholders, having completed over half its $400m full-year 2017 share buyback programme by November.
If we had a complaint, it’s that margins have remained stubbornly flat. Experian should be a highly scalable operation, but increased regulatory costs, amongst other things, have held it back. Fortunately the group has the size and expertise to handle the burden and still invest to defend and grow market share.
The group is rolling out new services in Latin America, where more than 90% of current revenues come from providing credit services to institutions like banks. Initial performance has been strong, and with a consumer offering in the pipeline, the market looks to have plenty of potential.
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