3 Stunning Stocks For Growth And Income Hunters: Lloyds Banking Group PLC, BAE Systems plc And RSA Insurance Group plc

Today I am looking at three stocks offering terrific value for both earnings and dividend seekers.

Lloyds Banking Group

Shares in banking giant Lloyds (LSE: LLOY) (NYSE: LYG.US) have fluctuated in recent months as concerns over its capital position and the scale of previous misconduct has curtailed investor appetite. Although these issues are a very real cause for concern, of course, I believe that the streamlined firm’s focus on improving its operations on the UK high street should deliver juicy gains in the coming years.

City analysts expect Lloyds to record a marginal 1% earnings decline in 2015, creating a P/E rating bang on the bargain watermark of 10 times forward earnings. And a modest 1% recovery next year nudges this to 9.9 times. Undoubtedly the effect of rising legal penalties and the cost of ongoing restructuring is expected to crimp growth in the medium term, but I fully expect the fruits of an improving domestic economy to underpin meaty earnings growth looking further ahead.

And with Lloyds having got its dividend policy back on track with a final dividend of 0.75p per share for fiscal 2014, the number crunchers expect payouts to explode this year and next. The bank is anticipated to shell out a total dividend of 2.8p in 2015, resulting in a juicy 3.5% yield, while a prospective reward of 4.2p next year drives the yield to an eye-popping 5.2%.

BAE Systems

I believe that weapons builder BAE Systems (LSE: BA) is a terrific choice for those seeking reliable earnings and dividend expansion. With improving economic conditions in the UK and US easing the budgetary pressures and bumpy contract timings of the post-recessionary landscape — and demand from emerging regions rumbling higher — in my opinion the company’s expansive suite of market-leading defence products looks likely to deliver exceptional returns.

The City expects 2015 to represent a watershed year for the London company, allowing the business say goodbye to the bottom-line volatility that has dogged it for many years. BAE Systems is anticipated to punch a 3% earnings rise in 2015, creating a P/E ratio of 13.8 times — any reading below 15 times is generally considered attractive value. And a predicted 6% rise in 2016 pushes the earnings ratio to just 13 times.

BAE Systems’ terrific cash-generative qualities have enabled it to keep dividends ticking higher even in times of earnings volatility, so not surprisingly the defence giant’s improved outlook is anticipated to safeguard future payout growth. Indeed, last year’s 20.5p per share payment is expected to rise to 20.9p this year and 21.7p in 2016, figures which produce appetising yields of 3.8% and 4% correspondingly.

RSA Insurance Group

Even though shares in RSA Insurance (LSE: RSA) have failed to ignite in recent times, I believe that the stock is overdue for a positive re-rating as its aggressive cost-stripping and disposal programme rattles along. With the business also doubling-down on its critical regions of the UK and Ireland, Scandinavia, Canada and Latin America, I reckon that the business is poised to enjoy strong bottom line expansion in the coming years.

This view is shared by the City, and RSA Insurance is expected to see earnings surge from 6.2p per share last year to 32p in 2015, creating a P/E multiple of 13.8 times. And the ratio slips to just 12.4 times for 2016 as earnings are predicted to edge 4% higher.

With growth firmly back on the agenda, and RSA Insurance’s capital buffer expected to receive a sizeable shot in the arm, dividends are anticipated to rocket higher sooner rather than later. A full-year payout of 2p last year is predicted to rise to 13.6p per share for 2015, producing a handy yield of 3.1%. And expectations of a further hike in 2016, to 15.9p, pushes the yield to an even-juicier 3.6%.

But whether or not you share my bullish take on the firms discussed above, I strongly recommend you check out this brand new and exclusive report that singles out even more FTSE 100 winners to really jump start your investment income.

Our “5 Dividend Winners To Retire On” wealth report highlights a selection of incredible stocks with an excellent record of providing juicy shareholder returns. Among our picks are top retail, pharmaceutical and utilities plays that we are convinced should continue to provide red-hot dividends. Click here to download the report -- it's 100% free and comes with no further obligation.

Royston Wild has no position in any shares mentioned. 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.