3 Great Value Stocks For Your ISA: Vodafone Group plc, Old Mutual plc And Pennon Group plc

These 3 stocks could transform your ISA: Vodafone Group plc (LON: VOD), Old Mutual plc (LON: OML) and Pennon Group plc (LON: PNN)

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Vodafone

While Vodafone (LSE: VOD) (NASDAQ: VOD.US) is continuing to struggle with bottom-line growth, its balance sheet remains very strong and this could prove to be the catalyst behind improved future performance. In fact, Vodafone’s focus on Europe continues to slow down its short term progress but, with excellent cash flow and modest leverage, it has the capacity to continue its strategy of buying high quality businesses at discount prices. And, in the long run, this could allow it to grow its bottom line at a rapid rate.

In terms of its current price level, Vodafone has seen investor sentiment pick up sharply over the last six months and its shares have risen by 11% during the period. However, with its yield still being a whopping 5.2%, it appears as though it offers good value for money and could be a strong long term performer.

Old Mutual

Old Mutual (LSE: OML) offers investors an excellent blend of income, growth and value. For example, it is forecast to increase its bottom line by 9% in the current year, followed by growth of 11% next year. That’s significantly faster growth than is predicted for the FTSE 100, and means that Old Mutual could arguably deserve to trade at a premium to the wider index.

However, it has a price to earnings (P/E) ratio of just 12.1, which is considerably lower than the FTSE 100’s P/E ratio of 16. As such, Old Mutual’s share price could realistically rise at a rapid rate and, with it having a yield of 4.1%, it also offers excellent income potential, too. As a result, it could prove to be a worthy addition to your ISA.

Pennon

Unlike many of its utility peers, Pennon (LSE: PNN) is expected to at least match the growth of the FTSE 100 over the next two years. For example, in the current year its bottom line is forecast to grow by 10%, followed by 5% next year. As such, it deserves to trade on at least the same rating as the wider index.

However, Pennon also offers a degree of stability that cannot be matched by most of its index peers. Even other utilities are less robust than Pennon, with the supply of water having far less political risk and uncertainty than services such as domestic energy supply. As such, Pennon’s current P/E ratio of 20.7 appears to be very appealing – especially when you consider that it also has a yield of 4%.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Old Mutual. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »