HSBC
Super-bank HSBC (LSE: HSBA) (NYSE: HBC.US) has seen its prospects improve dramatically as the global economy moves on from the financial crisis.
Earnings per share (EPS) at the bank is today forecast to reach a level not seen since 2007. With $0.99 being forecast, the shares are today trading on a 2013 price-to-earnings (P/E) ratio of 11.1. The dividend is expected to show an 18% increase, pushing the yield to 4.8%.
More growth is then expected next year. These forecasts put HSBC on a 2014 P/E of 10.2, with an anticipated yield of 5.4%.
Shares in HSBC are up 12% this year, versus an 11% gain for the FTSE 100. This looks a decent opportunity to invest in a reliable blue-chip.
ARM Holdings
ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) continues to exploit its position as a leading technology supplier to smartphone and tablet manufacturers. Since the development of the first iPhone, sales at ARM have boomed. In the last five years, turnover at the microchip designer has increased at an average annual rate of 17%. EPS has risen even faster — at a compound annual rate of 34% on average. The shareholder dividend has risen from 2p per share to 4.5p in that time.
ARM is forecast to deliver a whopping 73% growth in EPS this year, accompanied by a 24% dividend increase.
More growth is expected next year, putting the shares on a 2014 P/E of 33.6 and an anticipated yield of 0.8%.
Melrose Industries
Melrose Industries (LSE: MRO) is a collection of engineering businesses. In the last five years, the company has combined a number of smaller sales with the acquisitions of FKI and Elstar. Analysts are forecasting that 2013 will be the year that Melrose’s strategy begins to deliver significant EPS growth.
The Elstar acquisition is expected to lead to a 40% sales increase this year. This is forecast to lead to a 95% EPS rise. That puts the shares on a 2013 P/E of 16.0.
As for dividends, a more modest 7% increase is pencilled in, equating to a 3.0% yield.
Melrose is then forecast to report a 13% profit increase in 2014 and an 8% dividend hike. That puts Melrose at a slight premium to the average FTSE 100 share.
Although each of these companies is expected to deliver great growth this year, our team of analysts have identified what they consider to be a better growth prospect in their report “The Motley Fool’s Top Growth Share For 2013”. Their research is totally free and will be delivered to your inbox immediately. Just click here to start reading today.
> David does not own shares in any of the above companies.