One of the most appealing aspects of Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US) is its exposure to the Asian economy. Certainly, this has helped it to come through the credit crunch in a relatively strong position and, looking ahead, the potential for Chinese stimulus means that Standard Chartered looks set to deliver strong bottom line growth over the medium term.
And, while the bank has a new management team this year which will inevitably make changes and restructure parts of the business, it is still forecast to post earnings growth of 14% next year. That’s double the wider market growth rate and, despite this, Standard Chartered trades on a price to earnings (P/E) ratio of just 11.2 versus 16 for the FTSE 100. This indicates that an upward rerating is very much on the cards for Standard Chartered.
2015 has been a stunning year for investors in Old Mutual (LSE: OML), with the diversified financial company seeing its share price rise by 19%, while the FTSE 100 is up just 4% year-to-date. Despite this, Old Mutual still offers excellent value for money, with it having a price to earnings growth (PEG) ratio of just 0.9 and, as such, its share price could continue its strong recent performance.
And, even though Old Mutual’s share price could be somewhat volatile over the next few months, as evidenced by a beta of 1.4, the company has a strong income appeal that should offer support in the short to medium term. In fact, Old Mutual has increased dividends in each of the last five years and, with a dividend coverage ratio of 2, its current yield of 4.3% looks very sustainable.
Legal & General
With UK interest rates set to stay low over the next few years, companies that offer great yields and impressive dividend growth prospects could see their share prices rise significantly. One such stock is Legal & General (LSE: LGEN) (NASDAQOTH: LGGNY.US), which currently offers a yield of 4.7% and is forecast to increase dividends per share at an annualised rate of 13.5% over the next two years.
Of course, this rate of dividend growth is hardly surprising, since Legal & General has increased dividends per share in each of the last four years, with them rising from 4.75p per share in 2010 to 11.75p last year. That’s a rise of almost 2.5 times in just four years and, with investors still on the hunt for great yields, Legal & General could see investor sentiment surge and help to drive its share price northwards.
Don’t miss our special stock presentation.
It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.
They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.
That’s why they’re referring to it as the FTSE’s ‘double agent’.
Because they believe it’s working both with the market… And against it.
To find out why we think you should add it to your portfolio today…
Peter Stephens owns shares of Old Mutual and 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.