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Rationale for choosing the two companies and industries based on your industry and fundamental analysis
Finance & Accounting
Pages 6 (1506 words)
Rationale for choosing the two companies and industries based on your industry and fundamental analysis Table of Contents Introduction 3 Industry and Fundamental Analysis 3 Economic Analysis 3 Industry Analysis 4 Telecommunication 4 Pharmaceutical 5 Company Analysis 7 Vodafone Plc 7 Astrazeneca PLC 8 Share Valuation 10 Zero Growth Dividend Model 10 Constant Growth Dividend Model 12 P/E Approach 14 Investment Advice 15 Conclusion 16 Introduction This paper will attempt to offer investment recommendation for stock investment in UK market based on fundamental and industry analysis and share valuation using the financial techniques such as zero growth dividend model, constant growth dividend mode
During last financial year i.e. in 2010, companies have experienced higher growth and hence, there had been higher dividend yield (Vellacott and Cruise, 2011). UK economy has been experiencing slower economic growth but it steady and expected to grow much higher by 2012. However, due to sluggish economic recovery, Confederation of British Industry (CBI) has claimed that “expected national output to increase by 1.3% in 2011 compared to the 1.7% it had been predicting three months ago” (Elliott, 2011). During 2007-2009, overall GDP growth was negative due to global crisis, but during 2010, these parameters have taken an increasing trend that will make stock market grow in coming years. Industry Analysis Telecommunication UK telecommunication industry is highly developed in terms of industry polices and market exposures like demand. For example, during end 2010, nearly 4.8 million and 33.1 million were the users of mobile broadband and 3G mobile (Ofcom, 2011). ...
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