Why Infinis Energy and Dixons Carphone are a ‘buy’ for The Share Centre

21st January 2015

The Share Centre has added Infinis Energy and Dixons Carphone to its ‘buy’ list.

The broker said that at Infinis Energy, a fall in share price and an a dividend that is growing in line with inflation at least, are attractive for higher risk income investors.

Helal Miah, investment research analyst at The Share Centre, said: “Infinis Energy, the UK’s second largest renewable energy producer, is one of the few alternative or renewable energy providers that investors can buy into directly in the UK. Following the fall in share price we believe the valuation is now a more attractive entry point for investors and have added the company to our ‘buy’ list for higher risk investors seeking income.

“Having floated on the market in 2013, Infinis trades at a forward earnings ratio for 12.8 times and compares favourably against the peer group. The company also pays investors an attractive dividend, which management is growing at least in line with inflation.

“Infinis has grown its portfolio organically, as well as through acquisitions, since it was established in 2006. The landfill gas business, which represents 70% of revenues, has shown stable growth and has predictable production levels, generating good cash flows.

“Government policy hasn’t helped some areas of the renewable sector in recent years and offshore generation will be in favour should Conservatives win the general election, rather than Inifinis’ onshore wind farms. However, we believe government policy in the medium to long term should still on the whole be positive towards the sector.”

The Share Centre has also recommended Dixons Carphone as a ‘buy’ after it reported a 7% rise in like-for-like sales. It said that the company maintained strong sales momentum during its busiest trading period.

Ian Forrest, investment research analyst at The Share Centre, said: “Dixons Carphone reported a 7% rise in like-for-like sales over the Christmas period, with the UK and Ireland continuing to see good growth of 8%. However, southern Europe once again struggled with a decline of 4%. The company said that despite the scale of Black Friday impacting the weeks that followed, it gained market share across electrical goods and mobile phones. As a result, the full-year profit guidance range was raised to £355m-£375m.

“These trading figures show the company has maintained its strong sales momentum during its busiest trading period and the stability of its profit margin is also good news for investors. The ability to adapt is vital in retailing and Dixons Carphone is demonstrating this as more of its customers are moving to ‘click-and-collect’, online ordering and home delivery.

“Due to its good sales, further potential benefits of the merger and the encouraging prospect of a boost for consumers from the falling oil price, we recommend Dixons Carphone as a ‘buy’ for medium risk investors seeking both growth and income.”

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