Questor: Card Factory yields almost 4pc - and a special dividend could double that

The Wakefield-based firm floated in May 2014 at 225p and approached 400p late last year before fears over Brexit and the UK economy took over.

This could be a good time to buy, as the firm is forecast to pay a dividend of just under 9p a share in the year to January 2017, enough for a decent 3.7pc yield that is more than twice covered by earnings.

Better still, Card Factory has paid a 15p special dividend for the past two years.

While there is no guarantee of a repeat in 2017, the balance sheet is healthy and cashflow robust. If a third such payment is made the prospective yield is 10pc.

A trading statement from the greeting card, gift and wrapping specialist earlier this month read well enough. New store openings continue apace as Card Factory takes market share from weaker rivals and its websites show that the company is adapting to a "multi-channel" world under its new boss, Karen Hubbard.

There are risks.

Analysts expect earnings to be flat or even slightly lower in the year to January 2017 and to rise only marginally in the following 12 months. The challenges that face the high street and retailers in general are well known and Christmas will be important for short-term sentiment towards the stock.

But the heavy fall in the share price and well underpinned regular dividend should offer support, while any talk of additional special dividends could stoke fresh interest.

Questor says: buy

Ticker: CARD

Update: Micro Focus

Shares in Micro Focus, the FTSE 100 software group, are rallying - and last week's fourth-quarter figures from Hewlett Packard Enterprise may be the reason.

If all goes to plan, Micro Focus will merge with the American firm's software business in the second half of 2017. The deal was worth $8.4bn when it was announced in September.

It is therefore pleasing that sales at Hewlett Packard Enterprise rose by 1pc on a like-for-like basis after a 3pc fall in the third quarter and a 3pc drop in the whole year overall.

Moreover, operating margins rose for the full year from 21.8pc to 23.4pc, even if that number will leave Micro Focus's management with plenty of scope for further improvement.

Questor says: hold

Ticker: MCRO

Update: MJ Gleeson

Last week's Autumn Statement didn't really stir the stock market into action, other than to prompt it to hammer estate agents' share prices, but the renewed focus on affordable housing could play to the strengths of MJ Gleeson, the housebuilder, urban regeneration and land development specialist.

The shares have slipped from 595p since we tipped them in October but the company's strength in the North and average selling price of £125,000 could leave it in the sweet spot as the Chancellor tries to boost both housing supply and national productivity.

Questor says: buy

Ticker: GLE

Update: Tharisa

Wild movements in the share price of the metals miner Tharisa support our October assertion that the £258m stock is suitable only for risk-tolerant investors.

The shares surged from 92½p to 158½p following a bullish trading update on Nov 11 and a later fall in the interest rate on its debts.

The shares have since suffered a little profit taking but speculative investors may be inclined to stay involved. Full-year results are due out imminently and we may learn more about a maiden dividend. The shares are likely to remain volatile but still look worth a punt after the recent strong progress.

Questor says: speculative buy

Ticker: THS

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