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5 Defensive Growth Play For A Rocky Market: ITV plc, Regus PLC, Lavendon Group plc, Telecom plus PLC & Gulf Marine Services PLC

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ITV’s (LSE: ITV) rapid growth over the past five years has been nothing short of impressive. Indeed, the company’s earnings have grown at a compounded annual rate of 36% since 2009 and there’s further growth to come. 

City analysts believe that ITV’s earnings per share will expand a further 17.4% to 15.7p this year. Based on the fact that the company is currently trading at a forward P/E of 15.7, this indicates that ITV’s shares trade at a PEG ratio of 0.9 — a PEG ratio below one indicates growth at a reasonable price. 

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What’s more, analysts believe that ITV will announce a 57% hike in its dividend payout this year as earnings charge higher. Based on these expectations the company is set to support a dividend yield of 3.1% for full-year 2015. 

Explosive growth 

Office outsourcer Regus (LSE: RGU) has been on a growth tangent since the end of the financial crisis. For full-year 2015 analysts expect the company to report earnings per share of 10.7p, compared to the figure of 1.9p reported for full-year 2010, a gain of over 400%. 

Regus’ growth is set to continue for the next two years. Analysts expect the company’s earnings per share to expand 44% this year and a further 36% during 2016.

Unfortunately, for this kind of growth you have to pay a premium and Regus currently trades at a premium forward P/E of 23.5. However, based on the fact that the company’s earnings are set to expand 44% this year, the company’s shares are trading at a PEG ratio of 0.5. 

Regus currently supports a dividend yield of 1.7%. 

Earnings upgrade

City analysts have become increasingly upbeat about Lavendon’s (LSE: LVD) outlook during the past 12 months. 

Specifically, analysts have raised their growth forecasts for the company four times since August last year. Now, analysts expect the company’s earnings to expand 12% this year. As the company is currently trading at a forward P/E of 10.4, and PEG ratio of 0.9, Lavendon looks to offer growth at a reasonable price. 

Lavendon supports a dividend yield of 2.8%, and the payout is covered three-and-a-half times by earnings per share. 

Growth and income 

Telecom plus (LSE: TEP) offers the rare combination of both an attractive growth outlook and solid dividend yield. 

Telecom’s earnings are forecast to expand 31% this year, which when compared to the group’s forward P/E of 16.5 gives a PEG ratio of 0.5. Also, at present levels the company supports a dividend yield of 4.9%. 

Over the next two years, analysts have pencilled in dividend growth of 15% per annum. The payout is covered 1.2 times by earnings per share. 

Dirt cheap

Gulf Marine Services (LSE: GMS) is without a doubt one of the cheapest stocks around. The company currently trades at a dismal forward P/E of 6 and analysts believe earnings per share will expand 22% this year. These numbers give a PEG ratio of 0.3.

At present, Gulf Marine only yields 1.6% although the payout is covered ten times by earnings per share which leaves plenty of room for growth. Group debt is low, so there’s no need to retain profit for reinvesting later. Shareholders could be in line for a special payout in the near future. 

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Rupert Hargreaves has no position in any shares mentioned. 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.

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