This week’s relief at the absence of any stimulus tapering from the US Federal Reserve has put a bit of life back into the FTSE 100 (FTSEINDICES: ^FTSE), and the index of top UK stocks is up 38 points on the week so far to 6,622. That’s not a massive gain, but it does represent steady progress back towards the 13-year high of 6,876 it reached in May — we’re now only 254 points short, and more than a thousand points away from the year’s low of 5,606.
It’s individual shares that lie behind the indexes, of course, and here are three reaching new heights of their own:
Legal & General
Legal & General Group (LSE: LGEN) shares are now up more than 50% over the past 12 months, after finishing yesterday on a 52-week closing high of 203.2p — at the time of writing today they’re back a fraction from that, at 203p. And that rise comes in addition to an expected dividend yield of around 4.5%, so shareholders are having a pretty good 2013 so far.
In fact, after a small fall in 2009, the dividend has been lifted every year and has been well-enough covered despite some volatility in earnings per share. And since the low point of that fateful year, the L&G share price has multiplied eight-fold!
Engineering shares aren’t supposed to soar, are they? Well, that’s what’s happened to GKN (LSE: GKN), whose price has risen 60% over the past year to hit a 52-week high of 364.9p today.
First-half results to 30 June saw a 12% rise in sales with a 5% boost to adjusted pre-tax profit, and the interim dividend was lifted 8% to 2.6p per share. Full-year forecasts are suggesting flat earnings, putting the shares on a forward P/E of a pretty average 13.5 — the year’s price rise has taken the valuation up from a multiple of just 8.6.
At 2.2%, the expected dividend yield is modest.
It’s big enough to make the FTSE 100, but online fashion retailer ASOS (LSE: ASC) has stuck to its AIM listing. Behind a market capitalization reaching £4.5bn is a share price that has soared over the past 12 months, by 150% to hit a high of 5,774p today. By early afternoon it’s down to 5,622p, but still up 2.8% on the day.
That impressive record comes the cost of a very high valuation, with the shares now on a forward P/E of 112 based on current expectations for the year ended 31 August. ASOS may well still have massive growth ahead of it, but it’ll need it — to get the P/E down to the FTSE’s average of 14 would require a further eight-fold gain in earnings.
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> Alan does not own any shares mentioned in this article.