3 FTSE 100 Growth-And-Income Shares: J Sainsbury plc, Centrica plc and Rexam PLC

Outpace inflation with growth-and-income shares J Sainsbury plc (LON:SBRY), Centrica plc (LON:CNA) and Rexam PLC (LON:REX).

| 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.

Some investors prioritise capital growth through a rising share price; some prioritise income growth from a rising dividend. But some shares — growth-and-income shares — offer investors a bit of both.

J Sainsbury (LSE: SBRY) (NASDAQOTH: JSAIY.US), Centrica (LSE: CNA) (NASDAQOTH: CPYYY.US) and Rexam (LSE: REX) are three companies from the UK’s elite FTSE 100 index that have grown both their earnings and dividends faster than inflation and are forecast to continue doing so.

J Sainsbury

Sainsbury’s delivered earnings-per-share (EPS) growth of 9% for the year ended March 2013, beating analyst forecasts. The analysts see EPS growing at 6% a year for the next two years.

Forecasts on the dividend are for annual growth to continue at 2013’s rate of a bit less than 4% for the time being. This lower rate of growth than EPS would see dividend cover rise to around two times — closer to that of the company’s rivals.

At a recent share price of 388p, Sainsbury’s is trading on a current-year forecast price-to-earnings (P/E) ratio of 12.1 with a prospective income of 4.4%. These metrics look attractive with Tesco and Wm. Morrison Supermarkets both currently struggling to grow earnings.

Centrica

Centrica, the owner of British Gas, increased both EPS and its dividend by 6% last year. Analysts see EPS growth comfortably above 3% this year — with 7% to follow for 2014. Forecasts are for annual dividend increases to continue at 6% both this year and next.

At a recent share price of 392p, Centrica is trading on a forecast P/E of 14 with a dividend yield of 4.4%. These metrics put the company on the value side of the FTSE 100. Sector peers National Grid and SSE both offer a high starting income, but there are stronger EPS and dividend-growth expectations for Centrica.

Rexam

Drink cans manufacturer Rexam posted a 5% increase in EPS for 2012. Analysts see growth edging up to 6% this year, and accelerating to 12% in 2014. The City experts are forecasting double-digit dividend growth for both years, well ahead of 2012’s decent increase of 6%.

At a recent share price of 500p, Rexam is trading on a below-market-average forward P/E of 12.3, and a market-average income of 3.3%. Furthermore, you won’t find too many FTSE 100 companies with EPS and dividend-growth forecasts as strong as Rexam’s

Growth and income

If you’re an investor who’s more interested in growth than income, you may wish to read this exclusive in-depth report. The company featured has excellent growth potential — and has been declared “The Motley Fool’s Top Growth Stock For 2013“.

Just click here to download the report — it’s free.

If income is more important to you, we have another exclusive report, which features a great dividend share. This company offers a juicy 5.4% yield — and our analysts have declared it “The Motley Fool’s Top Income Stock For 2013“.

This report is also 100% free — simply click here.

> G A Chester does not own any shares mentioned in this article. The Motley Fool owns shares in Tesco and has recommended shares in Wm. Morrison Supermarkets.

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

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

2025 could be a great year to start buying shares. Here’s how to do it for under £500

Christopher Ruane thinks it’s possible to start buying shares on a limited budget. So what are the steps a stock…

Read more »

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

A £2,000+ annual passive income for £5 a day now? Here’s how!

This passive income plan is uncomplicated but potentially lucrative. Our writer shows how a fiver a day could turn into…

Read more »

Businessman using pen drawing line for increasing arrow from 2024 to 2025
Investing Articles

An investor who put £10,000 in NatWest shares one year ago would now have…

It took years and years, but NatWest shares have shrugged off the financial crisis and are now flying. Can they…

Read more »

Google office headquarters
Investing Articles

Stocks like Alphabet are still on sale. Time to buy?

Christopher Ruane has been eyeing some tech stocks to buy for his portfolio. But while some are cheaper than before,…

Read more »

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

No stock market experience, but want to aim for a million? Here’s how to start with £1,000 this May!

Targeting a million as a stock market newcomer? It might not be as unlikely as it sounds. Our writer gets…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

£10,000 invested in BP shares in the 2020 crash could now be worth…

BP's push for carbon net-zero launched in 2020 helped push the shares even further down in the Covid crash. Here's…

Read more »

Close-up image depicting a woman in her 70s taking British bank notes from her colourful leather wallet.
Investing Articles

Dividend yields of up to 10.5%! 3 investment trusts to consider for a second income

Looking for ways to make a strong and reliable long-term passive income? These top investment trusts could be worth a…

Read more »

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

3 reasons to like Apple stock

Apple stock's fallen by over a fifth since December. Our writer sees a lot to like about the tech business…

Read more »