Rio Tinto
Shares in super-miner Rio Tinto (LSE: RIO) (NYSE: RIO.US) are available today at just 8.5 times consensus forecasts for 2013. The anticipated dividend yield is 4.1%. By both measures, Rio trades at a discount to the average FTSE 100 company.
Be warned, however. The decline in metals prices may not yet be fully reflected in those profit predictions.
This time last year, analysts were forecasting $7.93 of earnings per share (EPS) from Rio for 2013. Today, the average of their 2013 estimates is $5.23. As a result of this dramatic decline in expectations, shares in Rio today trade near a four-year low.
However, dividend expectations have held up. Consensus is for Rio to pay $1.80 for 2013 and $1.97 for 2014.
Standard Chartered
With a business that is focused on emerging markets in the Far East, Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US) came through the financial crisis in better shape than any other UK-listed bank.
However, fears over the state of the Chinese economy has Standard Chartered’s shares underperform their peers’. In the last three months, shares in Standard Chartered are down 4%. In that time, Barclays are 12% ahead and the RBS share price is up 20%.
Nevertheless, Standard Chartered is still expected to report growth this year and next. Consensus is for the bank to deliver a 16% increase in EPS this year, followed by a 9% rise next year. The dividend is expected to be increased by 9% this year and next. That puts the shares on a 2014 P/E of 9.4, with an expected yield of 4.3%.
Old Mutual
Asset managers like Old Mutual (LSE: OML) thrive in strong equity markets. In the last year, as the FTSE 100 index has risen 17%, Old Mutual is up 26%.
Rising stock markets increase the value of the assets that Old Mutual manages, leading to an increase in fee income. Strong markets and fund performance then attract more investors, increasing the amount of assets under management. The effect is a ratcheting up of company profits.
Old Mutual is expected to report a massive 60% increase in EPS this year, accompanied by a 16% dividend rise. Double-digit increases are then expected again for 2014, putting the shares on a prospective P/E of 9 and a forecast yield of 4.6% for next year.
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> David owns shares in Barclays and RBS but none of the other companies mentioned. The Motley Fool owns shares in Standard Chartered.
