5 Growth Stocks For 2015: Imperial Tobacco Group PLC, Dixons Carphone PLC, London Stock Exchange Group Plc, Wolseley plc And Barratt Developments Plc

Imperial Tobacco Group PLC (LON:IMT), Dixons Carphone PLC (LON:DC), London Stock Exchange Group Plc (LON:LSE), Wolseley plc (LON:WOS) and Barratt Developments Plc (LON:BDEV) all offer growth at a reasonable price for 2015.

| 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.

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.

As we move into 2015, the global economic recovery is gaining traction and companies with the best growth prospects are attracting the most attention.  With this in mind, and if you’re stuck for ideas, here are five companies with some of the best growth prospects for 2015.

Leading provider

The London Stock Exchange (LSE: LSE) is busy building its presence in the global finance industry and is rapidly becoming one of the world’s leading financial services companies. This expansion is driving rapid growth at one of the world’s leading exchange providers.

Current figures suggest that the company will grow earnings by 26% next year, which puts the shares on a PEG ratio of 0.9 at present levels — indicating growth at a reasonable price. The group’s shares currently trade at a forward P/E of 18.1.

Property boom 

Barratt Developments (LSE: BDEV) has staged an impressive recovery over the past five years and the group’s growth is set to continue next year. Thanks to the booming UK property market, City analysts believe that Barratt’s earnings per share will expand 38% during 2015.

As the company is currently trading at a forward P/E of 10.7, earnings growth of 38% puts the stock on a PEG ratio of 0.3. A lowly growth valuation that’s almost too hard to pass up. 

International growth 

After spending much of the past two years restructuring, City analysts expect Imperial Tobacco’s (LSE: IMT) growth to explode next year. On average, analysts are predicting earnings per share growth of 19% next year, although this forecast could be revised higher, if Imperial’s deal to acquire a number of US cigarette brands goes ahead.

The company currently trades at a forward P/E of 13.5 and projected earnings growth of 19% next year gives a PEG ratio of 0.9, once again indicating growth at a reasonable price. Not only is Imperial cheap compared to its projected growth, the company currently supports a dividend yield of 4.5%. 

Merger synergies 

The recently merged Dixons Carphone (LSE: DC) is set to grow next year as the synergies gained from the deal between Dixons and Carphone Warehouse start to filter through.

According to current figures, the new, larger company will report earnings per share of 22.02p for 2015, a full 33.2% higher than the figure reported last year for the two separate entities. Dixons Carphone is currently trading at a forward P/E of around 18, which means that the shares trade at a PEG ratio of 0.7. What’s more, City analysts believe that Dixons Carphone’s earnings will expand a further 22% during 2016. 

So, if you’re looking for a great growth stock for the next few years, Dixons Carphone could be the way to go. 

Rising demand 

And lastly, Wolseley (LSE: WOS), which is my final GARP pick for 2015. 

Even though Wolseley looks expensive at present levels — the shares are currently trading at a forward P/E of 15.7 — City analysts expect the group’s earnings per share to expand by 23% next year. With earnings growth of 23% expected, the high earnings multiple is justified and a low PEG ratio of 0.8 only confirms the fact that the group is attractively priced at present levels.

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.

Rupert Hargreaves owns shares of Imperial Tobacco Group. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

A brilliantly reliable FTSE 100 share I plan to never sell!

This FTSE-quoted share has raised dividends for more than 30 years on the spin! Here's why I plan to hold…

Read more »

Asian man looking concerned while studying paperwork at his desk in an office
Investing Articles

This 7.7% yielding FTSE 250 stock is up 24% in a year! Have I missed the boat?

When a stock surges, sometimes it can be too late to buy shares and capitalise. Is that the case with…

Read more »

Investing Articles

£13,200 invested in this defensive stock bags me £1K of passive income!

Building a passive income stream is possible and this Fool breaks down one investment in a single stock that could…

Read more »

Investing Articles

I think the Rolls-Royce dividend is coming back – but when?

The Rolls-Royce dividend disappeared in 2020 and has not come back. But with the company performance improving, might it reappear?

Read more »

British Pennies on a Pound Note
Investing Articles

Should I snap up this penny share in March?

Our writer is considering penny shares to buy for his portfolio next month. Does this mining company merit a place…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

Stock market bubble – or start of a bull run?

Christopher Ruane considers whether the surging NVIDIA share price could be symptomatic of a wider stock market bubble forming.

Read more »

Investing Articles

Buying 8,254 Aviva shares in an empty ISA would give me a £1,370 income in year one

Harvey Jones is tempted to add Aviva shares to his Stocks and Shares ISA this year. Today’s 7.37% yield isn't…

Read more »

Investing Articles

Is the tide turning for bank shares?

Bank shares are trading on stubbornly cheap-looking valuations yet business performance in the sector is broadly robust. Should our writer…

Read more »