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SABMiller plc Could Be Worth Upwards Of 3,355p

With 2013 having been a surprisingly strong year for shares, a lot of Fools are getting excited about the prospects for 2014.

Of course, just as 2013 was something of a surprise, 2014 may also prove to deliver something similar in terms of the general consensus being wide of the mark.

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Indeed, even though earnings growth looks set to be a key theme of 2014, it could be worth seeking out companies that not only have an impressive set of growth forecasts for the year ahead, but which also have a strong track record of delivering earnings per share (EPS) growth.

One such company could be SABMiller (LSE: SAB) (NASDAQOTH: SBMRY.US). It has experienced fairly substantial earnings growth during the last few years, with EPS growing by between 11% and 17% in each of the last 4 years.

Furthermore, even in 2009, when trading conditions were exceptionally challenging, SABMiller was able to limit EPS falls to just 4%.

Of course, the EPS growth forecast for the current year to the end of March 2014 is not particularly strong, with a 4% increase expected to be delivered. However, looking ahead to 2015 is more satisfying and SABMiller is duly expected to generate EPS growth of 11% over the one-year period.

Indeed, its shares seem to offer above-average and impressive earnings growth and, moreover, could offer substantial upside potential.

With SABMiller currently trading on a forward P/E of 19.9, if 11% EPS growth was to be delivered and shares were to remain on their current P/E ratio, it could mean that they reach 3355p. This would be a gain of 11.2% from their current price level and, although this may not sound like a huge gain, if subsequent years were to see further EPS growth in the same region as that which is expected to be delivered in 2015, shares could offer potential upside of more like 20%.

Furthermore, with an albeit below-average yield of 2.3% thrown in, shares could deliver a total return of over 20% over the medium to long term. Add to this mix the aforementioned relative stability of earnings growth during challenging trading periods and SABMiller could be a top performer in future.

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> Peter does not own shares in SABMiller.

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