BT
Shares in telecoms giant BT (LSE: BT-A) (NYSE: BT.US) are up 46% in the last 12 months. This revival has taken the shares close to a 10-year high.
Last month, BT reported a strong set of numbers for the year ending March 2013. Although revenues were down 2%, adjusted profit before tax rose 21%. The consensus earnings per share (EPS) forecast for the full year is 25.8p. That puts the shares on a 2014 price-to-earnings (P/E) ratio of 12. More growth is expected next year, bringing the P/E down to 11 times forecast earnings.
The recent share price rise has pushed BT shares beyond their usual ‘high yield’ status. The expected payout for the year equates to a yield of 3.5%, similar to the average FTSE 100 share.
NEXT
NEXT (LSE: NXT) continues to knock spots off its high-street competition. The market’s regard for the company is manifested in its share price. So far this year, shares in NEXT are up 23%. In the last month, as the market has corrected, NEXT has outperformed the index by 6%.
A trading statement issued in May has helped underpin confidence further. Although the cold weather knocked shop sales down 2%, online and Directory sales were 9% ahead on last year.
The company is forecast to grow EPS and dividends this year and next. That puts the shares on a prospective P/E for this year of 14.4, with a 2.5% dividend. That’s a small premium to pay for such a clear winner.
Kingfisher
Kingfisher (LSE: KGF) is the retail group behind B&Q and Screwfix. The shares have had a good run in 2013 and are up 21%. Like NEXT, Kingfisher has also avoided the market correction of the past month. The shares are a smidgen (1%) ahead.
If the EPS forecast of 23.5p is met, that would be the second successive year that the company has reported falling earnings. On the other hand, a fifth successive dividend rise is forecast, pushing the yield on the shares to 2.9%. The forward P/E of 14.5 appears generous.
That said, the group is reporting impressive growth in China and Russia. Screwfix also continues to deliver double-digit growth.
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> David does not own shares in any of the companies mentioned.