The Motley Fool

3 FTSE 100 Shares That The Market Loves: British American Tobacco plc, GKN plc And Johnson Matthey PLC


The largest part of GKN (LSE: GKN)’s business is ‘Driveline’, its automotive engineering operation. Serving a notoriously cyclical customer base, GKN’s prospects are aligned with the car industry’s.

This vulnerability is clear in the company’s five-year record. Although GKN reported net profits of €480m in 2012, the figure back in 2007 was less than half of this. GKN made losses in 2008 and 2009. After being cut substantially in 2008, the dividend was dropped entirely the year after and is yet to return to pre-crisis levels.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

A good level of earnings and dividends growth is forecast for this year and next. This gives a 2013 price-to-earnings (P/E) ratio of 11.4, falling to 9.9 times next year’s forecast. A dividend yield of 2.6% is anticipated.

Johnson Matthey

Johnson Matthey (LSE: JMAT) has performed well in the last five years. Earnings per share (EPS) for 2008 was 91.0p. 2013 results, issued at the beginning of last month, showed earnings per share reached 140p. Five years ago, total dividends for the year were 38.3p. The payout declared for 2013 was 57p.

Two years of double-digit earnings growth are forecast for this year and next. At today’s share price, that puts Johnson Matthey on a 2014 P/E of 15.2, with the expected yield reaching 2.6%.

Unlike many other FTSE 100 companies, Johnson Matthey serves industry, not consumers. The company company’s track record is testimony to the strength of its business model. It’s premium rating to the average blue chip appears entirely justified. 

British American Tobacco

Cigarette giant British American Tobacco (LSE: BATS) (NYSE: BTI.US) has long been considered to be one of the most reliable companies in the FTSE 100. This status is likely inspired by the company’s profit and dividend record.

In the last five years EPS at BATS has increased at an average rate of 13.6% a year. Dividend growth in that time is even more impressive at 15.3% a year on average. In fact, you have to go back a long way to find a time when BATS reduced its dividend.

This success explains why brokers so readily recommend that clients buy the stock. However, I have grave concerns over the tobacco industry’s long-term future and have bet that BATS shares will fall.

What concerns me about my bet on British American Tobacco is that one of the world’s best investors is on the other side of the trade. Neil Woodford of Invesco has a significant stake in the company. This man has been beating the market for decades. For more information on Mr Woodford’s biggest shareholdings, get the free Motley Fool report “8 Shares Held By Britain’s Super Investor”. This analysis is 100% free and will be delivered to your inbox immediately. Just click here to start reading today.

> David does not own shares in any of the companies mentioned. He has bet that the price of British American Tobacco shares will fall.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.