BP
BP (LSE: BP)(NYSE: BP.US) will announce results for the first half of the year tomorrow. Recently, fears have been growing that the company may have to increase provisions for compensation claims following the Gulf oil spill of 2010.
Nevertheless, the analyst community is still forecasting earnings per share (EPS) for the year of $0.84. That equates to a price-to-earnings (P/E) ratio of 8.7.
Last year’s payout of $0.33 represents a 4.6% yield at today’s price. Total dividends for this year are expected to come in at $0.37, that’s a yield of 5.0%.
On both P/E and yield measures, BP is trading at a significant discount to its FTSE 100 peers. If the company can draw a line under the Gulf of Mexico disaster, then the shares could rise significantly.
BT
Shares in BT (LSE: BT-A)(NYSE: BT.US) are up 46% so far in 2013. This rise has pushed the shares to a new all-time high.
Last week, the company was trumpeting the success it has enjoyed so far with BT Sport, the company’s pay TV offering. Investors have been impressed by the possibilities offered by this venture and will be delighted to see customers sharing that enthusiasm.
BT is forecast to grow earnings and dividends this year and next. If the company can meet those forecasts, that would put the shares on a 2015 P/E of 11.5, with an expected yield of 3.7%. This makes BT around 10% cheaper than the average FTSE 100 stock.
Centrica
Centrica (LSE: CNA) is the utility company behind the British Gas brand. In the last twelve months, the shares have risen 20% and now stand near an all-time high.
Analysts expect that Centrica will report reasonable earnings growth this year and next. 8.0% EPS growth is expected this year, followed by another 6.6% in 2014. This puts the shares on a 2014 P/E of 12.8.
As for dividends, a 5.5% increase is expected for this year, to be followed by a 5.9% rise in 2014. That equates to a 2014 yield of 4.8%. On those fundamentals, it is difficult to envisage any more substantial rises from Centrica just yet.
That said, with a chunky, reliable yield, Centrica could be a great income hold. For more dividend investing ideas, check out our analysis on some of top fund manager Neil Woodford’s biggest holdings in the Motley Fool report “8 Shares Held By Britain’s Super Investor“. This research is 100% 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.