Ashtead shares soar after it maintains dividend

The British industrial equipment supplier saw its share price soar on Tuesday after the company announced that it will maintain its dividend pay-out to shareholders, bucking the trend of other FTSE 100 companies this year.

Ashtead Group saw its share price soar on Tuesday after the company announced that it will maintain its dividend, bucking the trend of other cash strapped FTSE 100 companies who have opted to cancel pay-outs this year.

So far this year, around 42% of total dividend payments in 2020 have been cut or cancelled by British blue-chips in a bid to offset the economic impact of the Covid-19 pandemic – wiping out approximately £26.5 billion in pay-outs to shareholders.

The British industrial equipment supplier wowed investors by maintaining its dividend this year, helping its stock close nearly 10% higher on Wednesday.

Even though Ashtead admitted that business was subdued by the outbreak throughout the latter half of March and into April, the company remained relatively busy, with it continuing to rent equipment to construction sites that remained open during lockdown.

Group sales for the year to April climbed 9% higher to break above £5 billion. Underlying pre-tax profit came in 4% lower at £1.1 billion, but the fall in earnings was offset by Ashtead maintaining a dividend of 33.5p a share, returning a total of 40.65p over the last 12 months of trading.

Ashtead close at £26.49 per share on Tuesday.

FTSE 100 rebounds back through key resistance level

The FTSE 100 received a boost from the US Federal Reserve (Fed) yesterday, with the break through 6186 bringing about a more bullish outlook after recent declines, according to Josh Mahony, senior market analyst at IG.

‘The recent selloff took us into and below the 61.8% Fibonacci support level last week, yet we are starting to now see the wider bullish trend coming back into play once again,’ he said. ‘The big question here is whether we continue to rebound and ultimately regain the 6515 level.’

‘That remains to be seen, with markets likely to continue following the direction of coronavirus cases as a gauge of whether a second wave is impending,’ Mahony added. ‘For today, we are finding support from the breakout level of 6186.’

The ability to remain above that level would point towards further gains, whereas a breakdown below the 80 threshold on the four-hour chart could bring another bout of downside.

Investors believe stock market is ‘overvalued’

According to a recent survey carried out by Bank of America (BofA), 98% investors said that they think the financial markets are ‘overvalued’ after rebounding from March lows due to global governments stimulus packages to offset the economic impact of the Covid-19 pandemic.

Cash levels at fund managers fell in June to 4.7%, down from 5.7% the month prior, with 93% of investors surveyed admitting they were growing increasingly concerned about the prospect of a prolonged recession.

BofA said in the report that the recent rise in investor optimism remains ‘fragile’ and unlikely to be maintained amid the myriad of macroeconomic headwinds.

How to trade stocks with IG

Looking to trade the Ashtead and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and spread bets in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Ashtead’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Sell
Buy
-
-
China 300
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.