RECOMMENDED.

Auckland Star, Volume LXIX, Issue 208, 3 September 1938, Page 4

RECOMMENDED.

STANDARD INSURANCE SHARES.

The shares of the Standard Insurance Company, Limited, can be recommended as a sound investment for the following reasons:—They are £5 shares paid to £1 and carry a dividend of I'2V2 per cent per annum. At the market price of 55/6 they show a return of approximately 4V& per cent per annum to present purchasers. This is a remarkably good yield for insurance stock, which, as is generally known, always has prospects of special increments over and above the customary dividends. Such increments have for various reasons been withheld in recent years by practically all insurance companies, but it is only a matter of time when portions of the reserves must come back to the shareholders.

Dealing first with the question of security. The Standard insurance Company, whieh, like the National, lias its •headquarters in Dunedin, is now in its 64th year, and its record over that period is on all fours with those other Dominion institutions which have gained for New Zealand a very high position in the insurance world. Subscribed capital consists of 200,000 £5 shares, now paid up to £1. At last balancing, namely at June 30. total assets amounted to £742,710, of which well over £60%,000 was in liquid form. Reserves for unexpired risks were over 60 per cent of the premiums received during the year, whereas 40 per cent is usually considered a safe margin. Apart from this provision, reserves in other forms, excluding taxation, amounted to £358,000.

The company's earning capacity is evidenced by the tables published in another column, from which it will be seen that there is not the slightest likelihood of a reduction in the dividend rate. The avowed object of leading insurance companies in the Dominion in to pay dividends out of intercut oil investments, leaving the year's underwriting surplus to swell the reserves, which in turn become available for periodical distributions later 011. Since the slump and the sharp fall in interest rates the yield from investments with most companies still falls short of that desirable end, though the totals ot investments are at record high levels. The Standard, however, has reached the point where interest from investments exceeds the amount necessary for the payment of the usual dividend. In other words, the directors are in <1 particularly good position to make a special distribution whenever they consider the time opportune.

TREND OF MARKET. The following table indicates the fluctuations in the values o£ various securities:— Doc. 22, Aug. 26, Sep. 2, 1937. I!>3S. l!)3fs. ~ , £ s. d. £ s. (I. C s. (I. A asla .. 10 13 0 *10 1.-, 0 10 if) u Commercial ft 17 <1 OHi 4 ft lft 4 E. S. and A. 3 7 0 3 3ft 3 3 (i Nat., N.Z. 213 (I 213 S *2 13 R Nat.. Aus. 7 ft O t: 12 ft •(! ]•> 0 N.S.W . . 32 17 ft 31 r. ft 3ft 13 ft V Zealand 2 4ft 22 Ift " •* 4 Union ... 5) 0 0 Sll 0 's 11 G MISCELLANEOUS. v,, . s - d. £ s. d. £ s. d. £ Z J" s,ir - { 3 " - 1(5 11 I" S S. British *2 8 ft 2 <; 3 2 6 *1 Golds. M. 113 ft 1 s ft *1 7 <> British Tob. 2 Ift <5 2 ft ft '• S 4 Broken Hill 3 3 ft 2IS ft ~17 11 Elee. Zinc 2 7 ft 2 3 ft 2 •> ft (pref.) 2 lft O 1i <; •> o Aus. mass 412 ft 414 0 413 3 Mr. Lyell 110 ft 1 S ft 1 G «) Col. Sugar 47 lft 0 47 3 0 47 7 i; Aurk. Gas 110 10ft 10 8 Wilsons C. ft 17 C> ft 17 lft 017 G N.Z. Brew. 2 6 6 2 1 (i " 1 «i Dom. Brew. 1 lft 9 112 ft 110 ft Farmers T. 100 019 10 019 9 GOVERNMENT STOCK. £ s. d. t s. d. G sil ,0 " 10 " 101 " 0 'ftl 0 0 ??§2 101 0 0 17 0 KM) 12 ft IJo3-o< US jft ft 413 0 1)4 10 0 •Nominal. Latest Sales. Sales since last review Lave been as follow: — Banks.—New Zealand. £2 2/6, £2 2/3, (D mortgage) £1 9/3, £1 9/6; Commercial Bank (pret.), £9 6/, £9 6/6; E. S. and A. Bank, £5 3/6. Insurances.—New Zealand, £2 16/6c l 7 /2 (2)..17/1, 17/; Standard',] £2 10/6; South British, £2 6/6 (6) Government, etc.—Bonds, Rural," 15/9/ f-/w-o P Sr 0 6 ,? 1 ' £101 17/e ' £102 - Bonds, 10/l/.)3-07. 3'/i per cent, £!)4 10/- Stock 15/4/46-49, 4 per cent, £101 7/6; Stock', March, 1939-43, 3M: per cent. £100 2/6* stock, November, 1938-52, 3M per cent £100 15/ (2), £100 12/6; Auckland Harbour Board 9/7/47. £102; Auckland Transport Board, 1/1/44-51, £101 10/Amalgamated Brick (Wellington), £99 Mining-Golden Crown, 3/; Martha. 11/; Waihi Investment. 8/6; Broken Hill South, £1 9/6; Mount Morgan, 10/9 (2) Australian, etc.—Alloy Steel (Australia), 7/3, 7/ ; Australian Glass, £4 13/3; British Tobacco, £2 8/4; Broken Hill Proprietary, £2 18/9, £2 18/6 (2), £2 18/3, £2 18,/. (con.) £2; Electrolytic Zinc (pref.), £2 6/3. £2 6/ (2); Colonial Sugar, £4/ 2/6. £47 7/6 (2); Dunlop Perdriau, £1 1/9; G. J. Coles, £3 19/9 £3 19/6 (4), £3 19/, £3 19/3, £3 19/; Huddart Parker, £2 8/3; I.C I (riref ) £1 1/8 (3), £1 1/7, (eon.) 11/8, 11/7; Mount Lyell, £1 7/; Morts Dock. 11/10%; 100 til s Breweries, £2 15/6, £2 14/9Woolworths (Sydney), £1 1/4 (2), £1 1/1 («.). £1 1/. Dominion—Auckland Gas, £1 0/9, £1 0/6; Berlei (New Zealand), £3 5/; Consolidated Brick. 7/9 (2); Dominion Breweries, £1 11/, £1 10/9, (rights) 4/8 4/6, 4/4. 4/1 (3), 4/. 3/11 (2) 4/ (4) Farmers' Trading, 19/9 (4): Milne and Choyce (deb: stock). 15/9: Moturoa Oil. 5/2, 5/3 (2)._ 5/2 (2); M.K. Manufacturers. //6; New Zealand Breweries. £2 1/9; New Zealand Dine, £3 10/6; Taranaki Oil. 14/ (2), 13/4, 13/, 12/3, 19/1 12/3, 12/7%, 13/, 12/11; Westport Stockton, 4/4, (pref.) 7/1; Farmers' Freezing, £1 1/6; Selfridges (New Zealand), 6/3; Winstone, 18/.