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Why Unilever plc, Cranswick plc And Associated British Foods plc Are Terrific Picks For Your 2015 ISA

Today I am looking at three London-listed lovelies you should consider when splashing the cash on next year’s ISA.

Unilever

Even though slowing consumer spend in key territories has seen earnings growth slow more recently, consumer goods giant Unilever (LSE: ULVR) (NYSE: UL.US) retains a near-perfect record of punching year-on-year expansion. And the business is expected to see the bottom line swell 14% in 2015 and 9% in 2016, revving from the 2% advance punched last year.

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It is true that these projections create heady P/E ratios of 21.2 times and 19.1 times for this year and next year respectively, some way above the benchmark of 15 times that illustrates attractive value for money. And although Unilever’s progressive dividend policy is expected to keep chugging along, chucking up payouts of 126.3 euro cents per share in 2015 and 135 cents in 2016, consequent yields of 3.2% and 3.4% are reasonable if unspectacular.

Still, I am convinced that the terrific pricing power of its market-leading brands — from Ben & Jerry’s ice cream through to Persil laundry detergent — and extensive emerging market exposure makes it an ideal pick for those seeking reliable earnings and dividend growth.

Cranswick

Shrugging off the effect of falling prices across the grocery sector, profits at pork-product specialist Cranswick (LSE: CWK) continue to march higher on the back of improved margins. And with demand from overseas on the march — exports to non-European markets rose 38% during October-December — and the business planning further heavy investment following last year’s Benson Park poultry acquisition, I reckon the firm can look forward to a rosy future.

Cranswick is expected to keep earnings ticking along through the next few years, with expansion of 9% for the year concluding March 2015 anticipated to be followed by an extra 9% advance in 2016 and 6% rise in 2017. As a consequence Cranswick deals on attractive P/E multiples of just 14.4 times for the coming year and 13.6 times for the following 12 months.

In line with this bubbly outlook, the food manufacturer is expected to raise the dividend from an estimated 34.4p per share for 2015 to 36.8p in 2016 and 39p in 2017. And even though figures for this year and next only produce yields of 2.6% and 2.8% correspondingly, I believe that dividends should push higher as profits surge.

Associated British Foods

Like Unilever and Cranswick, Associated British Foods (LSE: ABF) has a proud history of generating dependable earnings growth year after year. But the City is braced for a 2% decline in the 12 months concluding September 2015 as capital expenditure weighs and currency headwinds bite. Still, this dip is expected to be fleeting and a robust 16% bounceback is expected for fiscal 2016.

Granted, Associated British Foods can hardly be considered a cheap paper pick given that it currently deals on P/E multiples of 29.2 times and 25.2 times for 2015 and 2016 correspondingly. And even though the company is expected to keep on lifting the dividend, projected payments of 35p and 39.1p per share for these years only create yields of 1.2% and 1.3%.

However, I believe that the breakneck progress of the firm’s Primark budget clothing brand fully justifies the company’s premium price — Associated British Foods has said that it expects sales to rise 16% during October-February, at constant exchange rates, and is expanding both retail and warehouse space in the UK and on the continent. With the brand set to be rolled out in the US later this year I believe the stage is set for Associated British Foods’ bottom line to explode in the coming years.

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

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