3 More FTSE 100 Shares Expected To Grow Profits Fast: HSBC Holdings plc, ARM Holdings plc And Melrose Industries

City analysts are forecasting big profit increases this year at HSBC Holdings plc (LON:HSBA), ARM Holdings plc (LON:ARM) and MELROSE INDUSTRIES PLC ORD 0.1P (LON:MRO).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.


Super-bank HSBC (LSE: HSBA) (NYSE: HBC.US) has seen its prospects improve dramatically as the global economy moves on from the financial crisis.

Earnings per share (EPS) at the bank is today forecast to reach a level not seen since 2007. With $0.99 being forecast, the shares are today trading on a 2013 price-to-earnings (P/E) ratio of 11.1. The dividend is expected to show an 18% increase, pushing the yield to 4.8%.

More growth is then expected next year. These forecasts put HSBC on a 2014 P/E of 10.2, with an anticipated yield of 5.4%.

Shares in HSBC are up 12% this year, versus an 11% gain for the FTSE 100. This looks a decent opportunity to invest in a reliable blue-chip.

ARM Holdings

ARM Holdings (LSE: ARM) (NASDAQ: ARMH.US) continues to exploit its position as a leading technology supplier to smartphone and tablet manufacturers. Since the development of the first iPhone, sales at ARM have boomed. In the last five years, turnover at the microchip designer has increased at an average annual rate of 17%. EPS has risen even faster — at a compound annual rate of 34% on average. The shareholder dividend has risen from 2p per share to 4.5p in that time.

ARM is forecast to deliver a whopping 73% growth in EPS this year, accompanied by a 24% dividend increase.

More growth is expected next year, putting the shares on a 2014 P/E of 33.6 and an anticipated yield of 0.8%.

Melrose Industries

Melrose Industries (LSE: MRO) is a collection of engineering businesses. In the last five years, the company has combined a number of smaller sales with the acquisitions of FKI and Elstar. Analysts are forecasting that 2013 will be the year that Melrose’s strategy begins to deliver significant EPS growth.

The Elstar acquisition is expected to lead to a 40% sales increase this year. This is forecast to lead to a 95% EPS rise. That puts the shares on a 2013 P/E of 16.0.

As for dividends, a more modest 7% increase is pencilled in, equating to a 3.0% yield.

Melrose is then forecast to report a 13% profit increase in 2014 and an 8% dividend hike. That puts Melrose at a slight premium to the average FTSE 100 share.

Although each of these companies is expected to deliver great growth this year, our team of analysts have identified what they consider to be a better growth prospect in their report “The Motley Fool’s Top Growth Share For 2013”. Their research is totally 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.

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.

More on Investing Articles

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

The FTSE 100 reaches an all-time high! Here are 2 of its best stocks to consider buying

With the FTSE 100 soaring in 2024, this Fool thinks investors should consider buying these two stocks. Here he breaks…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Here’s why I see cheap UK shares soaring in the years ahead

UK shares look undervalued and this Fool plans to take advantage of it. Here he details one stock he's keen…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Dividend Shares

Is Legal & General the best stock to buy in the FTSE right now?

UK investors have been piling into Legal & General in recent weeks. But are there better FTSE shares to buy…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

With no savings at 40, I’d buy and hold these 2 FTSE 250 stocks to retirement

Jon Smith outlines two FTSE 250 stocks that he believes offer long-term value for an investors that's looking to build…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

£9,000 in savings? Here’s how I’d try to turn that into £7,864 every year in passive income

Investing a relatively small amount in high-yielding stocks and reinvesting the dividends paid can generate significant passive income over time.

Read more »

Arrow symbol glowing amid black arrow symbols on black background.
Investing Articles

Is Aviva’s share price a bargain now it’s trading well below £5?

Aviva’s share price has slumped to well below £5, but even before that it looked a bargain to me, with…

Read more »

Smartly dressed middle-aged black gentleman working at his desk
Investing Articles

Rolls-Royce shares: tapped out at £4 or poised to climb further?

Rolls-Royce shares are finally showing signs of faltering after months of gains. Can they still climb further or is a…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Up 30%, this FTSE 100 stock has been my best buy in 2024

I’m considering the prospects of my best-performing FTSE 100 stock this year. Can this major UK bank continue to make…

Read more »