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Why I’d Buy Banco Santander SA, Vodafone Group plc And Supergroup PLC

Today I am lauding the merits of investing in three British high-street stalwarts.

Banco Santander

Market appetite for banking goliath Santander (LSE: BNC) (NYSE: SAN.US) has fallen through the floor since new chairperson Ana Botín announced plans to slash the dividend and introduce a rights issue to shore up its capital ratio back in January.

Shares have recovered somewhat following the firm’s 2014 release at the start of the month, however, which underlined the enduring success of its retail operations — total new loans rose 5% last year to €7.6bn, a result that helped push pre-tax profit almost a third higher to €9.72bn. With Santander expressing its desire to double-down on its high-street operations across the globe, I expect the bottom line to keep on expanding.

This bullish view is shared by the City, which expects Santander to punch growth of 14% in 2015 and 13% next year, creating ultra-cheap P/E multiples of 11.8 times and 10.4 times prospective earnings for these years. A readout around or below 10 times is widely considered too good to pass.

And despite Botín’s desire to cut the dividend to just 20 euro cents per share this year — a mammoth drop from the 60-cent reward of recent years — such a payment would still create a handy 3.1% yield. It is too early to say what next year’s total payment will come out at, with capital ratios across the banking sector coming under close scrutiny, but at the moment the City’s touted payout of 25.1 cents drives the yield to 3.9%.

Vodafone Group

Unlike Santander, Vodafone (LSE: VOD) (NASDAQ: VOD.US) has seen its shares rocket by more than a fifth since mid-October, reflecting an improvement in its core markets and the firm’s massive investment programmes which promise to drive voice and data revenues skywards.

The telecoms giant is expected to register a gargantuan 64% earnings dip for the year concluding March 2015, due to its vast capital outlay and enduring difficulties in Europe. But with Vodafone noting improvements in these key regions since last summer, earnings are expected to edge 1% higher in fiscal 2016 before vaulting 23% higher the following year.

On paper, Vodafone can still be considered an expensive pick in spite of this impressive rebound, with P/E multiples coming in at 36.8 times and 31.2 times in 2016 and 2017 correspondingly. However, in my opinion Vodafone’s aggressive entry into the European red-hot quad-play sector, colossal $19bn Project Spring organic investment programme, and surging demand for its products in Asia fully justifies this premium.

In addition, Vodafone’s exceptional cash-generative qualities is also expected to maintain dividends at eye-watering levels. And anticipated 11.5p per share payment for this year is expected to rise to 11.8p in 2016 and 11.9p in 2017, producing a market-smashing 5.1% yield for this year and next.

Supergroup

Investor faith in clothes retailer Supergroup (LSE: SGP) have taken a battering this week with the shock exit of chief financial officer Shaun Wills, who stepped down after declaring personal bankruptcy.

Although the firm was quick to point out that the matter was “wholly unrelated to the financial position of the company,” Wills’ resignation follows hot on the heels of chief operating officer Susanne Given own departure, raising questions of just what is going on at boardroom level.

Of course, the market will be keeping a close eye on developments at the top, but I believe that Supergroup’s investment case remains undiminished. The company’s rapid expansion across Scandinavia, Germany and France in recent years should drive revenues from its hugely-popular Superdry brand still higher, adding to the roaring trade seen across its online channel.

Supergroup is expected to bounce back from a 1% earnings slip for the year ending April 2015 with a 15% recovery next year, followed by a similar bounce in fiscal 2017. These projections leave the business dealing on a P/E reading of 15 times for 2016 — bang on the benchmark which indicates attractive value for money — and which ducks to 13.3 times for the year after.

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Royston Wild has no position in any 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.