3 Cheap FTSE 100 Shares With High Forecast Growth: Standard Chartered PLC, Rio Tinto plc and Petrofac Limited

Standard Chartered

Unlike the rest of the UK’s listed banks, Standard Chartered (LSE: STAN)(NASDAQOTH: SCBFF.US) has a strong focus on emerging markets and the Far East.

This served shareholders well during the financial crisis as European and American banks foundered. However, as the global economy picks up, some fears have begun to emerge over the strength of these former high-growth economies. This has hit shares in Standard Chartered. At the end of August, the shares traded within a whisker of a low for the year.

The shares today trade at 10.9 times forecast earnings for 2013. 8% profit growth is forecast for 2014, lowering the rating to 10.1 times consensus forecasts.

The shares are expected to yield 3.6% for 2013, rising to 3.9% next year.

Rio Tinto

Like all resource companies, Rio Tinto (LSE: RIO)(NYSE: RIO.US)’s earnings are subject to the price that the international market sets for its products. Forecast profits for the company have declined significantly in the last 12 months as industrial metal prices have fallen. This time last year, analysts were forecasting $6.93 of earnings per share. Today, that figure is $4.93.

That puts the shares today on a 2013 P/E of 10.1. That is a considerable discount to the FTSE 100 average of 14.2.

Rio is expected to push through an 8% dividend increase this year, increasing the 2013 yield on the stock to 3.6%. Some investors may be deterred by the fact that profit expectations at Rio have deteriorated so significantly.

All things considered, the shares do not look expensive to me.


Oil services firm Petrofac (LSE: PFC) is one of the FTSE’s great growth stories. In the last five years, sales at the company have increased from $2.4bn to $6.2bn. In that time, net profit has increased from $190m to $630m. Earnings per share has tripled. Petrofac is expected to pay $0.66 of dividends per share for 2013, far ahead of the $0.17 paid for 2007.

A big earnings increase is forecast for 2014, putting the shares on a P/E of 10.3. Petrofac is forecast to yield 2.9% this year. The payout is then expected to increase by 16% in 2014.

The company recently confirmed that it expects to report modest net profit growth for the year, which roughly corresponds with the broker forecasts.

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> David does not own shares in any of the above companies.