UK-Slim Pickings for stocks in FTSE 100

UK sectors: slim pickings for stocks in FTSE 100 - at Moneyweek.co.uk - the best of the week's international financial media.

The market has rallied strongly since spring and equities in general "once again look attractive", says The Investors Chronicle. But not all boats will float on the tide: even with the FTSE 100 shares, investors should pick carefully. The following may be worth considering.

The utility sector throws up some good opportunities. Scottish and Southern Energy's decision to withdraw its £1.1bn offer for Midlands Electricity scuppers its expansion plans, "but shows it won't overpay for growth". The group has about £1.5bn that it could return to shareholders, on top of a 5.7% dividend yield and a forward p/e of just 11. Gas supplier Centrica is also worth a look. It expects its new £350m customer relationship management system at British Gas to generate £100m-£135m in cost savings in 2005. This, plus plans to increase the dividend payout to 40% of earnings, should lift the shares from their "unjustly" low rating.

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