Are These The 3 Best Growth Plays For Next Year? Barclays PLC, Whitbread plc And Galliford Try plc


Although investor sentiment in Barclays (LSE: BARC) (NYSE: BCS.US) remains relatively low, this doesn’t mean that it won’t have a great 2015. In fact, next year could prove to be a strong year for the bank, since it is expected to offer a top notch yield as a result of excellent earnings growth forecasts.

For example, after announcing at the time of its rights issue that it would seek to pay around 45% of earnings as a dividend over the medium term, Barclays looks to be following through on its promise. In 2015, dividends per share are forecast to rise by 44.5%, which at its current price would put it on a yield of 4.2%.

This is clearly an impressive yield and exists because of a combination of a low valuation and stunning growth prospects. For instance, Barclays trades on a price to earnings growth (PEG) ratio of just 0.3, which highlights that it is a highly appealing growth play.

And, with recent results showing that asset writedowns are fading at a time when the UK economy is going from strength to strength, Barclays could see its bottom line benefit from positive surprises in 2015 and beyond, thereby making it a hugely appealing growth stock.


Shares in Whitbread (LSE: WTB) have risen by a whopping 232% over the last five years, as demand for high quality coffee and budget hotel rooms has exceeded expectations. In fact, there still appear to be considerable opportunities for growth, with Whitbread rolling out a new, niche hotel brand called Hub, as well as offering Costa Coffee outlets in new spaces such as petrol stations.

As a result, the company is expected to increase its earnings by 15% in the current year, and by a further 13% next year. Both of these growth rates are hugely appealing and are roughly twice the rate of growth of the wider index. As such, a PEG ratio of 1.4 seems to be a very reasonable price to pay for favourable long term growth prospects, as well as an excellent track record of delivering on new, niche offerings.

Galliford Try

Having risen by 307% in the last five years, investors may be wondering whether Galliford Try (LSE: GFRD) can continue to post such staggering gains. After all, it would be of little surprise for the valuation of the house building and construction company to be rather rich.

However, with the company forecast to increase its bottom line by 14% next year and its price to earnings (P/E) ratio being 11.2, its PEG ratio is just 0.8. That’s hugely appealing and shows that there could still be significant share price growth on offer next year.

Furthermore, with the major political parties seemingly all agreeing that more house building is needed during the next parliament, the longer term future for Galliford Try appears to be very bright, too. As such, it appears to be a top growth stock to own a slice of.

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Peter Stephens owns shares of Barclays and Galliford Try. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.