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3 Big-Cap Bargains Too Good To Miss: GlaxoSmithKline plc, Banco Santander SA And Royal Mail PLC

Today I am running my eye over three of the FTSE 100‘s best all-round value stocks.

GlaxoSmithKline

For pharmaceuticals giant GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US), the crushing effect of significant patent expirations on revenues performance is not expected to expire anytime soon. Indeed, the business is expected to punch a fourth successive annual earnings decline in 2015 as a result, and a 4% drop is currently chalked in by the City’s army of brokers.

However, I remain confident that GlaxoSmithKline has both the financial clout and the know-how get sales moving in the right direction in the coming years, achieved through a targeted R&D drive in hot growth areas and underpinned by strong emerging market demand. And the number crunchers are in agreement, with the medicines play predicted to rebound from next year and a 4% advance is currently anticipated in 2016.

Although the Brentford business changes hands on P/E ratios of 17.3 times for 2015 and 16.3 times for 2016 — above the threshold of 15 times which generally signals decent value — I reckon this is more than compensated for by market-smashing dividends. Indeed, GlaxoSmithKline is expected to meet its predicted payout of 80p per share in 2015, producing a 5.2% yield. And should earnings march higher thereafter as the City expects, I believe investors can look forward to even more lucrative yields in the coming years.

Banco Santander

Not only is global banking giant Santander (LSE: BNC) a terrific way to cotton on to improving economic conditions in core established markets like the UK, but I believe the Spanish bank’s ongoing expansion into Latin America makes it a great developing market play.

Years of significant restructuring, combined with terrific performance across its retail operations in core markets, has seen Santander emerge as an exceptional earnings generator in the post-recession landscape. And the bank is expected to punch further growth of 14% and 13% in 2015 and 2016 correspondingly, producing ultra-low P/E multiples of 11.8 times and 10.5 times for these years.

Santander stunned investors in January when it announced it was slashing the dividend by two-thirds, to 20 euro cents per share, this year in an attempt to bulk up its capital reserves. Still, it is worth bearing in mind that such a payout creates a decent yield of 3.2%. And with balance sheet reparations undertaken, I fully expect dividends to march higher again from 2016 in line with earnings expansion.

Royal Mail

With the rise of online shopping looking set to boost parcels volume both at home and in Europe, I believe that Royal Mail (LSE: RMG) is in great shape to enjoy splendid earnings growth in coming years. On top of this, the company’s ongoing modernisation drive still has plenty left in the tank and should keep on knocking chunks off its cost base.

The courier is expected to post a solid 23% earnings advance in the year concluding March 2015, leaving the business dealing on an attractive P/E ratio of 13.5 times. Although an anticipated 6% slip next year raises the earnings multiple of 14.7 times, this reverse is expected to be temporary, and a predicted 16% improvement in fiscal 2017 drives the ratio to just 12.2 times.

Furthermore, the City expects Royal Mail to keep dividends ticking higher throughout this period, with last year’s total payout of 13.3p per share predicted to surge to 20.4p for fiscal 2015, producing a meaty 4.7% yield. And dividends of 21p and 21.3p for 2016 and 2017 respectively push the yield to 4.9% and 5%.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.