Today I am looking at the investment prospects of three FTSE-listed headline makers.
Prudential
Life insurance play Prudential (LSE: PRU) disappointed the market during Tuesday trading despite releasing another bubbly update, and was recently 2.7% lower on the day. The London firm advised that new business profit surged 13% during January-September, to £1.76bn, driven by further strength in its critical Asian markets.
Indeed, profits from these regions surged 24% in the nine-month period, to £974m, while Prudential also reported robust performances in the US and its British home markets. A £2.7bn net outflow at its M&G asset management arm during the most recent quarter provided a fly in the ointment for otherwise-strong results, but I believe investors should be encouraged by the insurer’s broad resilience in challenging conditions.
Thanks to Prudential’s broad suite of products, not to mention ambitious expansion drive, the company is expected to enjoy earnings bounces of 14% and 9% in 2015 and 2016 respectively, creating very reasonable P/E ratios of 13.9 times and 12.5 times. And projected dividends of 39.8p per share for 2015 and 43.6p for 2016, yielding 2.6% and 2. 8%, sweeten the investment case.
ITV
Broadcasting giant ITV (LSE: ITV) also furnished the market with positive results in Tuesday’s session, and the market responded by pushing shares in the business 1.1% higher. The company advised that revenues galloped 13% higher in the first nine months of 2015, to £2.05bn, helped in no small part by the success of the Rugby World Cup.
Elsewhere, ITV advised that turnover at its ITV Studios arm — a division responsible for global hits like Downton Abbey and The Chase — sprinted 28% higher in the period to £782m, fuelled by recent acquisitions like that of Talpa Media in April. Still, organic growth of 9% during January-September illustrates the underlying strength of ITV’s programme-making expertise.
With the business solidly outperforming the wider market, the City expects ITV to enjoy earnings expansion of 16% in 2015 and 10% next year, creating very reasonable P/E multiples of 16 times and 14.5 times respectively. And when you chuck in projected dividends of 6.1p per share for 2015 and 7.3p for 2016, yielding 2.4% and 2.9%, I believe ITV provides great value for money.
Trifast
Bolt-and-fastener manufacturer Trifast (LSE: TRI) also enjoyed an 1.8% uptick in its share price following its latest financial update. The Surrey business advised that pre-tax profits cantered 44% higher in April-September, to £7.1m, propelled by a 5.6% revenues improvement to £78.1m.
As a consequence Trifast elected to hike the interim dividend by a third, to 80p per share. And with good reason — the industrial firm advised that “our order pipeline across our key locations remains encouragingly healthy,” while Trifast also continues to make progress in terms of cost control and supply chain management.
Thanks to Trifast’s exceptional relationships with blue-chip companies across the globe — the firm’s products can be found in anything from PCs and kitchen appliances to automobiles — the number crunchers expect earnings growth of 3% and 7% in the years to March 2016 and 2017 respectively, creating brilliant P/E ratings of 11.8 times and 11.1 times.
Predicted dividends of 2.3p for this year and 2.4p for 2017 create modest yields of 2.1% and 2.2% correspondingly, but I expect payments to surge higher along with earnings further down the line.