Why DS Smith plc, Greene King plc And Carillion plc Should Beat The FTSE 100 Today

DS Smith plc (LON: SMDS), Greene King plc (LON: GNK) and Carillion plc (LON: CLLN) are climbing.

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The FTSE 100 (FTSEINDICES: ^FTSE) is continuing to creep back up today, putting on a further 20p to 6,185 points in the first couple of hours of trading, as the investors of the world come to the realisation that the US economy might just survive a lessening of quantitative easing and that China is actually not going bust.

Some companies are even doing well, too. Here are three from the various indices that look set to beat the FTSE today:

DS Smith

DS Smith (LSE: SMDS) gained 12.7p (5.3%) to 253p after the maker of recycled packaging announced a cracking rise in full-year profits. A year that the company described as “transformational” brought in an 86% rise in revenue to £3.67bn, with pre-tax profit up 51% to £166m. Bottom-line earnings per share (EPS) rose by 36% to 17.4p, enabling a similar 36% rise in the full-year dividend to 8p per share.

Even though the share price has soared by more than 80% over the past 12 months, that 8p dividend still represents a respectable yield of 3.2% on today’s price. And if forecasts come good, we should be looking at a rise to 3.5% next year — and that’s from shares on a forward price-to-earnings (P/E) ratio of only 11.

Greene King

I’m especially pleased when I see real-ale brewers doing well, so today’s 22p (2.9%) rise for brewer and pub-operator Greene King (LSE: GNK) to 768p, taking the shares up 45% over the past year, makes it a good morning for me. The occasion was the release of full-year results, which showed a 4.8% rise in revenue to £1.95bn, leading to a 6.6% rise in pre-tax profit (before exceptional items) to £162m and a 7.5% rise in EPS to 57p.

The firm’s recent trend of rising dividends continued, with a 7.3% lift in the full-year payout to 26.6p per share, for a yield of 3.5% on today’s price. Forecasts for the next two years suggest more of the same, with a further 5.6% rise currently predicted for 2014.


Construction services firm Carillion (LSE: CLLN) today announced a new contract for its Al Futtaim Carillion joint venture in the United Arab Emirates, and saw its share price boosted by 10.1p (3.9%) to 272p as a result. The project, to build a new five-star hotel in Abu Dhabi, is worth £130m, with work due to commence this month and last until late 2015.

This news might help to swing sentiment back in Carillion’s favour, as the shares are looking perhaps a bit undervalued to me on a forward P/E of 7. Even with a 10% fall in EPS expected for December 2013, the predicted dividend yield still stands at 6.6% and would be more than twice-covered by forecast earnings.

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> Alan does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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