Today I am looking at four FTSE ‘all-rounders’ that offer terrific earnings and dividend prospects.
BT Group
Thanks to galloping demand for ‘quad play’ entertainment packages, I believe telecoms giant BT (LSE: BT-A) should enjoy splendid revenues growth in the years ahead. The London company has thrown vast sums into taking on the might of Sky, and due to the headway its BT Sport proposition has made versus its rival, a case is rapidly building that BT will smash the customer base of its broadcasting rival in the years ahead.
Although the firm’s huge broadband investment is also going some way to pounding its rival, earnings are expected to slip 3% in the 12 months to March 2016 thanks to the huge associated costs. But a 7% rebound is forecast for 2017, pushing a very decent P/E ratio of 13.6 times for the current period to a mere 12.8 times for next year. When you throw in chunky yields of 3.3% and 3.7% for 2016 and 2017 correspondingly, I reckon BT offers splendid value for money.
Imperial Tobacco Group
The long-term investment case for the likes of Imperial Tobacco (LSE: IMT) has been undermined more recently thanks to evolving attitudes towards smoking, fuelled in no small part by rising regulatory pressure. But thanks to improving spending power in emerging regions, an expanding presence in the North American market, and entry into exciting growth segments like e-cigarettes and caffeine strips, I believe Imperial Tobacco should continue to deliver bountiful rewards.
This view is shared by the City, and Imperial Tobacco is anticipated to enjoy earnings expansion of 2% and 7% in the years concluding September 2015 and 2016 correspondingly. Such figures produce tasty earnings multiples of 15.5 times and 13.7 times, and the good news does not end there — expected dividends of 141.7p per share for 2015 and 155.9p per share create strong yields of 4.4% and 4.8%.
BAE Systems
With military spend from the US and UK governments firmly back “on the up”, I believe that BAE Systems (LSE: BA) is in great shape to deliver chunky returns in the years ahead. A combination of vast R&D spend, steady acquisitions and broad operations covering a range of defence sectors makes it a critical supplier to Western armed forces, qualities that have not been lost on rising powers like Saudi Arabia and India who are increasing their custom at the firm.
And due to the range and scale of conflicts raging across the globe, from IS rebels destabilising the Middle East to Russian action in Ukraine prompting fears of Cold War 2.0, earnings at BAE Systems look destined to rise. A marginal advance is anticipated for 2015 before a 6% improvement kicks in during 2016, or so say the number crunchers, producing P/E ratios of just 11.7 times and 11.1 times correspondingly. And yields of 4.6% and 4.8% for these years solidify the investment case, in my opinion.
International Consolidated Airlines Group
With rising consumer spending power across the world boosting citizens’ wanderlust, I fully expect passenger numbers at International Consolidated Airlines (LSE: IAG) to keep on climbing. On top of this, the firm’s imminent purchase of Aer Lingus gives it improved exposure to the lucrative budget airline sector, while its British Airways and Iberia brands lead the way in the fast-growing transatlantic market.
With a backcloth of weak crude prices also helping to slash the cost base, International Consolidated Airlines is anticipated to chalk up earnings growth of 77% in 2015, producing a very decent P/E ratio of 11.1 times. And this figure falls to a bargain-basement 9 times for next year thanks to predictions of a 24% bottom-line bounce. Furthermore, the operator is expected to restart its dividend policy from this year, and an expected reward of 14.5 euro cents per share for 2015 — yielding 1.8% — is predicted to leap to 21.1 cents for 2016, yielding 2.6%.