Edison reviews Securities Trust of Scotland (STS)

RNS Number : 2664G

Securities Trust of Scotland PLC

28 February 2018

 

London, UK, 28 February 2018

Edison issues review on Securities Trust of Scotland (STS)

Securities Trust of Scotland (STS) aims to generate rising income and long-term capital growth through investment in quality companies across the globe, with sustainable dividends supported by robust earnings growth. STS appointed a new lead manager in May 2016 and adopted an unconstrained investment approach, allowing the portfolio to reflect the manager's highest-conviction stock picks in a relatively concentrated portfolio of 35-55 holdings. STS's performance has since been positive relative to its new peer-based benchmark, while it has a comparable dividend yield of 3.5%, following an increased payout from FY16. It is one of two trusts in the peer group to trade on a discount to cum-income NAV, providing scope for the discount to continue to narrow.

STS is currently trading on a 5.0% discount to cum-income NAV, and is one of two among its peer group with a discount. In 2016, a new manager was appointed and the trust adopted the current investment approach, following which performance has been above its new benchmark. The board increased the dividend from FY16 and adopted a progressive dividend policy. At the current share price, STS is yielding 3.5%.

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