Shares in Prudential (LSE: PRU) (NYSE: PUK.US) have made a strong start to 2015 and are up 11% since the turn of the year. However, further gains could lie ahead for the diversified financial company, with it having a potent mix of value and growth appeal.
For example, Prudential is forecast to increase its bottom line by 14% in the current year, and by a further 12% next year. This means that its earnings could be around 28% higher in two years’ time, which is clearly a very fast pace of growth.
And, with Prudential trading at a discount to the FTSE 100 (it has a price to earnings (P/E) ratio of 15.2, versus 16 for the wider index) an upward rerating could mean that the company’s shares rise by an even greater amount. As such, they appear to be worth buying right now.
Clearly, Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US) is going through a challenging period at the present time. However, its shares appear to be exceptionally cheap – even when the uncertainty regarding its future strategy and the potential for more negative news flow is taken into account.
For example, Standard Chartered has a price to book (P/B) ratio of just 0.8 and this means that even if its share price were to rise by 25%, it would still only be trading at net asset value.
As such, it appears to offer an exceptionally wide margin of safety, which indicates that even if there is a significant volume of bad news to come, Standard Chartered could still prove to be an excellent buy at the present time.
While there are a number of appealing income stocks in the FTSE 100, Direct Line (LSE: DLG) is continually one of the highest yielding stocks in the index. For example, it presently yields a whopping 5.5%, with dividends being well covered by profit (and, therefore, sustainable) at 1.4 times. As such, Direct Line could make a major impact on your income over the medium to long term.
However, where it could also add value is with regard to capital gains. That’s because appealing income stocks, such as Direct Line, could become more in-demand moving forward, with UK interest rates set to remain low for much of the next Parliament. As such, even a gain of 20% in its share price would still leave Direct Line yielding a FTSE 100-beating 4.6%. Therefore, it could offer a top notch total return in 2015 and beyond.
Peter Stephens owns shares of Standard Chartered. 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.