Why BP plc, Royal Dutch Shell Plc and Stagecoach Group plc Should Beat The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) is in a buoyant mood ahead of the start of the US Federal Reserve’s next two-day meeting starting today. The banking sector is having a down day overall, but BP’s results-led surge helped to offset that and send London’s top index to its highest level since May. 

Which shares are supporting the FTSE indices today? Here are three:


BP shares climbed a very nice 21.8p (4.8%) to 474p this morning, after the oil & gas giant raised its third-quarter dividend by 5.6% to 9.5 cents (6p) per share — a similar rise for the full year would provide an attractive yield of 4.7% based on the current share price.

Underlying replacement-cost profit for the quarter did decline by 26%, to $3.7bn from $5bn in the third quarter of 2012, but that was better than the City had expected and represented a 36% gain on the second quarter of this year.

Based on full-year forecasts, BP shares are now on a forward P/E of only a bit over 9, with a 5% dividend yield expected — and those figures improve to 8 and 5.5% respectively for 2014 predictions. Cheap? I think so, which is why BP is in the Fool’s Beginners’ Portfolio.

Royal Dutch Shell

Royal Dutch Shell (LSE: RDSB) (NYSE: RDS-B.US) shares also had a good day, gaining 22.9p (1%) to 2,263p by midday. Some of that would have been due to a spread of optimism from BP to the sector as a whole, but Shell also updated us today on the progress of its current share buyback programme — on 28 October, the company bought 300,000 of its B shares for cancellation, at a price of 2,232p per share.

Shell shares are also arguably cheap right now, with forecasts for this year putting them on the same forward P/E as BP, of just over 9, and it falls to under 9 for 2014. Predicted dividend yields for this year and next stand at 5.1% and 5.2% respectively.


Stagecoach Group (LSE: SGC) shares have soared 2.5-fold since their low point in 2009, comfortably outstripping the FTSE along the way. And today they got a 4p (1.2%) boost to reach 338p, after a trading update ahead of a planned pow-wow with analysts told us that things are going smoothly.

The firm’s London bus operations saw like-for-like year-to-date revenue dip by 1.6%, but all of its other operations enjoyed nice rises. Regional bus services in the UK gained 5%, with UK rail operations seeing a 3% increase. The firm’s stake in Virgin Rail saw 6.1% more revenue, and its North American operations raked in a rise of 7.3%.

Stagecoach’s guidance for full-year earnings remains unchanged, with the shares on a forward P/E of 13.

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> Alan does not own any shares mentioned in this article.