Royal Mail News Update: The Pros and Cons of Royal Mail Shares

Royal Mail Pro Con List

Royal Mail News Update: The pros and cons of Royal Mail shares in the future are examined. How will the shares perform on the stock market in the future?

Those in the private investment sector do not have high hopes for Royal Mail shares in the immediate future and feel that it is likely that they will rely entirely on dividend for any return on investment. Shares will go on sale on the open market on the 15th October. A poll that was conducted asking Daily Telegraph readers – what do you expect that the total return will be on Royal Mail shares including capital appreciation and dividends? The majority of the answers, thirty nine per cent, indicated that they thought that the growth would be five to ten percent while in second place with twenty six per cent of the vote was zero to five per cent. That would make the average and the likely forecast at about six and a half per cent.

This level is largely what was expected with predictions for the yield from dividend estimated as being just over six per cent to just over seven and a half per cent. The precise figure cannot be pin pointed, as the price that the shares will be floated at has not been announced yet. The estimated range for the shares is thought to be between £2.60 and £3.30 per share. If this was the case then this would mean that the higher share price may correspond to a lower consequent yield. There has been a lot of interest in the shares and that would mean most probably that share price would be at the top of the anticipated range and that would be likely to mean a dividend that was near the six per cent mark.

The Royal Mail privatisation proved popular with investors and was soon oversubscribed and within only a few hours investors had scrambled to place their orders for the shares that will be offered to the public. The valuation that is expected to be put on the company at that time is anywhere up to just over three billion pounds.

Royal Mail News Update

It is an exciting time for the Royal Mail and there is no doubt that the performance of their shares on the stock market will be watched keenly by all those in the money market.

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