Reckitt Benckiser
A huge range of premium domestic brands are owned by FTSE 100 company Reckitt Benckiser (LSE: RB). Such products include Dettol, Harpic, Calgon and Nurofen. RB leverages the pricing power of these brands to deliver big returns for its shareholders.
Since 2007, earnings per share (EPS) at RB has increased from 123.3p to 263.5p. In that time, dividends have grown from 55.0p per share, to 134p.
Forecasts for the next two years suggest that future growth will be more modest. The consensus of analyst expectations is for EPS to increase by 1.9% this year and 4.8% the next. Dividend growth is forecast to outstrip this, rising 3.7% this year and 5.7% the next.
RB shares are today priced at 17.6 times forecasts for 2013.
Burberry
They say that fashion is a fickle business. That hasn’t stopped Burberry (LSE: BRBY) consistently powering ahead. Ten years ago, Burberry reported total sales for the year of €590m. In the most recent full year, revenues hit €2bn.
Sales growth has translated well into profit and dividend increases. In the last five years, EPS at Burberry has advanced from 27.6p to 81.5p. In that time, dividends have increased from 12.0p to 29.0p.
Burberry is forecast to report a slight fall in earnings this year before returning to growth. Dividends are expected to increase this year and next. That puts the shares today on a 2015 P/E of 16.1 (Burberry has a March year-end) and a projected yield of 2.6%.
Hargreaves Lansdown
Investment service provider Hargreaves Lansdown (LSE: HL) is the dominant player in its market. The company is the go-to organisation for anyone looking to invest in managed funds.
Hargreaves Lansdown has grown its revenues from ?100m in 2007 to ?240m in 2012. In that time, EPS has increased from 7.9p to 24.8p. Dividends have increased from 3.0p per share to 15.8p. That’s a compound annual dividend growth rate of nearly 40%.
This strong growth is forecast for continue. Consensus is for Hargreaves Lansdown to report a 26% increase in EPS this year, followed by another 19% of growth in 2014. That’s a 2014 P/E of 24.3 times earnings, with an expected dividend yield of 3.5% by 2014.
Hargreaves Lansdown’s track record and the long-term nature of much of its business has seen the shares earn a premium rating. If you are searching for companies that will continue to reward investors for decades, check out the latest Motley Fool research report “5 Shares For The Long Run”. This analysis is totally free and will be delivered to your inbox immediately. Just click here to get your copy today.
> David does not own shares in any of the above companies. The Motley Fool has recommended shares in Burberry.
