Barclays
Despite falling by 4% already this year, shares in Barclays (LSE: BARC) (NYSE: BCS.US) could deliver impressive returns during the course of 2015. That’s because Barclays offers investors a potent mix of excellent growth prospects and a highly appealing valuation, which, together, could act as a catalyst to push the bank’s share price higher.
For example, Barclays is forecast to increase earnings by 30% in the current year, followed by a further 20% rise in 2016. This means that Barclays’ net profit could be as much as 56% higher in 2016 than it was in 2014, which would be an astounding rate of growth. And, with shares in Barclays trading on a price to earnings (P/E) ratio of just 9, it seems to offer excellent value for money, too. As a result, it could prove to be a star performer in 2015 and beyond.
Aviva
With Aviva’s (LSE: AV) (NYSE: AV.US) takeover of Friends Life being agreed in December, 2015 looks set to be a period of yet more considerable change for the life insurance major. It comes after numerous disposals, a major restructuring and a rationalisation of the business have taken place and shows that Aviva continues to have excellent long term potential, with synergies of around £225 million being mooted from the deal.
Of course, Aviva remains a top notch income and value play in the meantime. For example, it is forecast to yield 4.3% in the current year, with a planned increase in dividends per share next year of 21.1% having the potential to push its yield to 5.1%. And, with a P/E ratio of just 9.6, it appears to be ripe for an upward rerating over the medium term.
RSA
Having endured a tough time in recent years, with allegations of accounting scandals and a share price that has declined by a third in the last five years, things seem to finally be on the up for investors in RSA (LSE: RSA). That’s because the insurance stock is expected to increase its bottom line by 24% in the current year, and by a further 14% next year – both of which are considerably faster growth rates than the wider index and the majority of its sector peers.
Despite this, shares in RSA continue to trade on a relatively low valuation. For example, they have a P/E ratio of just 12.5 and, when combined with such a strong rate of growth, this equates to a price to earnings growth (PEG) ratio of just 0.5, thereby indicating that growth is on offer at a very reasonable price. As such, shares in RSA could reverse the decline of previous years moving forward.
