A relatively small number of FTSE 100 companies seem to grab so much of the attention.
Some investors rarely look beyond the big banks, oil majors, pharmaceutical giants, supermarkets and mining companies.
Some real stars in the UK investment universe seem to get overlooked no matter how brightly they shine.
Legally Speaking
Legal & General Group (LSE: LGEN) doesn’t get the investor clicks it deserves despite growing a whopping 260% over the last five years.
It has maintained this momentum, rising 20% in the last 12 months against just 3% for the FTSE 100.
It does now looks fully valued at 16 times earnings and 3.64% isn’t the brightest yield, but demographic political trends remain firmly in its favour, including ageing populations, globalising asset markets, welfare cutbacks and the continuing assault on the banks.
National Treasure
National Grid (LSE: NG) gives exposure to the benefits of the defensive utilities sector, but without the political risk that has plagued British Gas owner Centrica and SSE.
As a virtual monopoly in a heavily regulated industry, supplying gas and electricity infrastructure in the US and UK, National Grid offers far more certainty than most FTSE 100 stocks.
Its US business is at the mercy of extreme North American weather, and of course it has to spend billions each year upgrading its infrastructure, but in a deflationary world its 4.65% yield sizzles.
On Your Marks
Marks & Spencer Group (LSE: MKS) can look dowdy but its stock has sparkled in the last 12 months, rising 35%, although its fashion business continues to be overshadowed by food.
M&S finally seems to be making headway online and investors should feel the benefit of improving cash flow with management’s commitment to a progressive dividend (now a drab 2.88%).
Trading at nearly 18 times earnings it is expensive, though.
Alpha Mail
Royal Mail (LSE: RMG) will never repeat the excitement its generated during its launch but it has battled on doggedly through subsequent disappointments. It is up nearly 15% over the last month alone, buoyed by better-than-expected full-year results.
Royal Mail is facing tough competition in its key parcels business from Amazon, which has launched its own delivery service. But the troubles afflicting smaller competitors City Link and Whistl has removed competition from other sources.
On a progressive 3.95% yield this stock looks like a long-term buy and hold, and it is nice to see that Royal Mail can deliver some growth as well.
Springtime For Vodafone
Vodafone (LSE: VOD) fell off some investors’ radar after the disposal of Verizon revenues are growing again due to strong demand for data, rapid customer growth, and acquisitions such as Kabel Deutschland and Ono.
Cash flow should also pick up once Project Spring stops swallowing money and start generating it instead, and this should help feed the dividend.
It now yields 4.36% and the share price grew nearly 20% over the past 12 months, making Vodafone is another dark star that still gives off plenty of light.
