Sometimes it’s tough to find shares in companies that offer the elusive mixture of growth and value. Indeed, it’s even more difficult to find companies that offer those two elements, plus a respectable yield on top. However, here are three stocks that offer all three and, as a result, are the three FTSE 100 shares I’d buy first.
HSBC
Although 2014 has proved to be something of a disappointment for HSBC (LSE: HSBA), with shares in the bank being down 3% versus a fall of 0.5% for the FTSE 100, it has huge potential. Indeed, HSBC is forecast to grow earnings by 7% in the current year and by 9% next year; both of which are ahead of the FTSE 100’s expected growth rate. Furthermore, HSBC looks well placed to benefit from further emerging market growth, notably in China, as it evolves into a more consumer focused economy that requires higher levels of credit.
With a yield of 4.8% and a price to earnings (P/E) ratio of just 11.9 (versus 13.5 for the wider index), HSBC could prove to be a top-notch investment.
GlaxoSmithKline
While sector peers Shire and AstraZeneca have grabbed all of the positive headlines of late, GlaxoSmithKline (LSE: GSK) has continued to see market sentiment weaken as allegations of bribery continue to abound. This, then, presents an opportunity to buy shares in the company when they are cheap, with GlaxoSmithKline currently trading on a P/E of just 12.9. In addition, GlaxoSmithKline has impressive short-term growth potential, with earnings set to increase by 6% next year, while its pipeline is diversified and comes with huge potential to deliver growth over the longer term. With shares yielding 5.6%, they also remain attractive for income-seeking investors, too.
ITV
ITV’s (LSE: ITV) recent results were well received by the market, with shares in the company gaining 12% in the last month alone. Indeed, advertising revenues continue to benefit from an improved macroeconomic outlook and this looks set to continue during the second half of the year as the company is forecast to increase earnings by 16% this year, and by 11% next year. Despite recent strength, shares in ITV remain reasonably priced when growth prospects are taken into account, with the company having a P/E of 15.8 and a price to earnings growth (PEG) ratio of around 1. Although a yield of 2.1% may not be hugely exciting, a low payout ratio and high earnings growth prospects mean that dividends could increase at a brisk pace moving forward.
