3 FTSE 100 Growth-And-Income Shares: J Sainsbury plc, Centrica plc and Rexam PLC

Some investors prioritise capital growth through a rising share price; some prioritise income growth from a rising dividend. But some shares — growth-and-income shares — offer investors a bit of both.

J Sainsbury (LSE: SBRY) (NASDAQOTH: JSAIY.US), Centrica (LSE: CNA) (NASDAQOTH: CPYYY.US) and Rexam (LSE: REX) are three companies from the UK’s elite FTSE 100 index that have grown both their earnings and dividends faster than inflation and are forecast to continue doing so.

J Sainsbury

Sainsbury’s delivered earnings-per-share (EPS) growth of 9% for the year ended March 2013, beating analyst forecasts. The analysts see EPS growing at 6% a year for the next two years.

Forecasts on the dividend are for annual growth to continue at 2013’s rate of a bit less than 4% for the time being. This lower rate of growth than EPS would see dividend cover rise to around two times — closer to that of the company’s rivals.

At a recent share price of 388p, Sainsbury’s is trading on a current-year forecast price-to-earnings (P/E) ratio of 12.1 with a prospective income of 4.4%. These metrics look attractive with Tesco and Wm. Morrison Supermarkets both currently struggling to grow earnings.


Centrica, the owner of British Gas, increased both EPS and its dividend by 6% last year. Analysts see EPS growth comfortably above 3% this year — with 7% to follow for 2014. Forecasts are for annual dividend increases to continue at 6% both this year and next.

At a recent share price of 392p, Centrica is trading on a forecast P/E of 14 with a dividend yield of 4.4%. These metrics put the company on the value side of the FTSE 100. Sector peers National Grid and SSE both offer a high starting income, but there are stronger EPS and dividend-growth expectations for Centrica.


Drink cans manufacturer Rexam posted a 5% increase in EPS for 2012. Analysts see growth edging up to 6% this year, and accelerating to 12% in 2014. The City experts are forecasting double-digit dividend growth for both years, well ahead of 2012’s decent increase of 6%.

At a recent share price of 500p, Rexam is trading on a below-market-average forward P/E of 12.3, and a market-average income of 3.3%. Furthermore, you won’t find too many FTSE 100 companies with EPS and dividend-growth forecasts as strong as Rexam’s

Growth and income

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> G A Chester does not own any shares mentioned in this article. The Motley Fool owns shares in Tesco and has recommended shares in Wm. Morrison Supermarkets.