Broker Charles Stanley has run the microscope over constituents of the FTSE 250 index looking for key income buys and come up with five likely candidates.
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Goldbug100 picks - Carillion (LSE: CLLN.L) 328.00p +1.00p, the construction and engineering group and Hays (LSE: HAS.L) 117.50p +2.30p (recruitment) go in together with N. Brown (shopping catalogue), Marston's (pubs and brewing) and Thomas Cook (holidays)
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Charles Stanley's favourites. "Each of the above offers a yield of at least 4.0% (FTSE 250-ex investment companies historic yield 2.51%) where Charles Stanley Securities analysts are confident of a future stable or growing return," the broker note said. "The law of averages suggests that the FTSE 250 Index will again outperform in 2011. However, should the index underperform, history suggests that any underperformance is likely to be muted." "Should the FTSE 250 outperform on the basis of recovery in the UK economy into 2012 the stand-out buy from our picks is Marston's with a beta of 1.46 to the FTSE 250. Other selections that should perform well into such a scenario are Thomas Cook (0.96), Carillion (0.89), and Hays (0.87). N.Brown (0.32) may be a selection, all other considerations aside, if the FTSE 250 were to weaken. However, all our selections exhibit the common characteristics of high, strong and sustainable yield," the note concludes.
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