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Thursday, 04/08/2004

Red Hot Conglomerate
By Nich Sheldon
HAN - Hanson PLC

Company Description

Hanson Brick is part of Hanson PLC (NYSE:HAN), an international building materials company, with more than 28,000 employees and operations in 17 countries. Hanson PLC is the largest producer of aggregates, the second largest producer of pipe and the third largest producer of brick in the world.

[Source: Company Press Release]

Reasons to Invest:

This week I wanted to fine-tune my Drip of the Week search based upon dividend yields, price action and technical analysis. With that said, I am putting a huge emphasis on the actual dividend yield percentage. Hanson Plc (NYSE:HAN) is the perfect example of a Drip candidate worthy of the DripAdvisor.com's limelight.

Hanson has been around for more than 20 years, and specializes in making bricks, aggregates, and piping. On Monday March 1st, 2004 Hanson acquired Athens Brick for $40.4 million, of which they paid cash for on a debt-free basis and is subject to usual post- closing adjustments. The Athens plants are to be managed as part of Hanson Brick's South Central Region, which would bring in a combined output of facing brick in the area to 450 million across eight plants. The President of Hanson Building Products America, Richard Manning, said that "this transaction is part of Hanson's strategy to enhance our existing strong market positions, and it will make an immediate contribution to earnings." He went on to say that the company is forecasting further growth in the future.

According to their income statements, HAN has a revenue growth position of 14.40%, with a gross profit of 5.85 billion. Revenues are approximately 6.63 billion. In regards to price performance, HAN is ranked in the top 25% of its industry, with a 52-week change of 52.81%, or 16.89% relative to the S&P 500.

From a technical standpoint, HAN's chart looks phenomenal. Hanson has been trending inside of a tightly wound regression channel since the end of January 2003, testing the top bars of the channel several more times than it has the bottom bars. On the daily chart, HAN has just recently sparked a personal buy signal as I note the simple 10-DMA over the 30-DMA. The MACD indicator also shows signs of bullishness. The stochastics indicator has HAN in overbought territory, but that's to be expected since the stock has been in mostly bullish territory for the past month.

HAN's weekly chart looks about as nice as it's daily chart. However, the MACD is in bearish territory. I feel that the bearish signal on the MACD is nothing to worry about, as the stock is started to get a little overextended and may be due to catch its breath for a few sessions. The 10-DMA is also over the 30-DMA on the weekly chart, and the stochastics indicator marks HAN in neutral territory, which usually represents a sign of lower risk for longer-term investors.

The weekly chart shows the 10-DMA over the 30-DMA, the MACD indicator in bullish territory and the stochastics indicator ready to spark a new bullish crossover, albeit it is in the overbought range (but just barely).

As noted before, I see a low risk rating on new positions into HAN's shares. While I think that the charts and news surrounding HAN is all positive, and I more dumbfounded at how nice of a dividend they yield. Hanson divvies out an annual dividend of 2.23 per share owned, which calculates out to a 5.60% yield. That is not a typo! You read right! Hanson offers a 5.60 percent dividend yield. Furthermore, they are forecasting a dividend percentage increase of 10.07 percent in the next year, 7.35 percent over the next three years, and 5.86 percent over the next 5 years.

This ends another exciting episode of the DripAdvisor.com Drip of the Week. Stay tuned next week, as we will spotlight another stock worthy of the DripAdvisor.com limelight.

Until Next Week,
Nich Sheldon
Editor

Broker Recommendations

Strong Buy         1
Buy                1
Hold               0
Sell               1
Strong Sell        1

Brokers Covering   4


DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = No
Accept Foreign Accounts: Yes
Temper Enrollment: Yes

Min/Max Investment = $50-$60,000/year


Reinvestment Fees - 
Dividend investment fees: $0.06 per share
Cash investment fees: $2.50 + $0.06 per share
Auto reinvestment fees: N/A


Transfer Agent:
Citibank 
800-422-2066


Corporate Headquarters:
1 Grosvenor Place
London, EN SW1X
Phone: (732) 919-2310
Fax: (732) 919-1149
Email: carolann.walsh@hansonplc.com




 
 

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