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3 Big-Cap Beauties With Outstanding Growth Prospects: HSBC Holdings plc, Cobham plc And Talktalk Telecom Group PLC

Today I am looking at three blue-chip wonders set to deliver excellent earnings growth.

HSBC Holdings

Banking goliath HSBC (LSE: HSBA) (NYSE: HSBC.US) looks set for a prolonged period on the so-called ‘naughty step.’ With prosecutors in France launching a formal investigation into HSBC’s Swiss unit for allegedly encouraging tax evasion — an issue being investigated by lawmakers across the world — news that the firm’s global head of sanctions, Lee Hale, told US regulators that further breaches are “cast-iron certain” owing to the bank’s size are sure not to have gone down well.

Still, I believe that HSBC’s extensive exposure to the global engine rooms of China and South-east Asia should underpin strong earnings growth in the coming years, territories where rising populations, increasing personal income levels and relatively-low banking product penetration bodes well for future revenue growth. As well, the firm also has strong positions in the improving economies of the UK and North America.

City analysts expect “The World’s Local Bank” to record earnings growth of 19% in 2015, and to follow this up with expansion of 5% in the following 12 months. Such projections leave the business dealing on P/E multiples of just 10.6 times and 9.9 times prospective earnings for 2015 and 2016 correspondingly — any reading below 15 times is widely considered attractive value.

Cobham

Boosted by improving economic conditions across key customer bases in the West, I believe that defence play Cobham (LSE: COB) can look forward to putting behind it the revenues pressure and lumpiness in its order book of previous years. Indeed, with ISIS maintaining their charge across the Middle East, relations with Russia declining by the week, and concerns circulating over China’s expansionist policies, I expect hardware sales to continue ticking resolutely higher.

On top of this, I expect Cobham to also reap the rewards of growing demand for civil aeroplanes as airlines enjoy surging passenger numbers. With its Commercial arm having enjoyed like-for-like revenue growth of 5% last year, this segment is now the company’s largest division and responsible for around four-tenths of total turnover.

Accordingly the number crunchers expect Cobham to record a robust 16% earnings increase this year, and an additional 7% rise is chalked in for 2016. Consequently the business sports ultra-appealing P/E multiples of 14.2 times for 2015 and 13.2 times for next year.

Talktalk Telecom Group

While its main telecoms rivals BT and Sky have been engaged in an intense arms race, sector minnow Talktalk (LSE: TALK) has also been engaged in its own investment programme to bolster its own position in the red-hot ‘quad play’ segment. The company has splashed out on Tesco’s broadband and blinkbox operations to expand its internet and TV capabilities in recent months, and the growing popularity of its bundles helped to drive group revenues 4.2% higher during October-December, the eighth successive quarter of growth.

With the City expecting this exceptional momentum to continue, Talktalk is anticipated to follow earnings expansion of 45% in the year concluding March 2015 with further hefty rises to the tune of 72% and 37% in 2016 and 2017 correspondingly. These forecasts drive the company’s P/E multiple of 21.3 times for the new year to just 14.3 times for 2017.

In addition, Talktalk’s tremendous value relative to its growth prospects is underlined by PEG ratios of 0.3 for 2016 and 0.4 for next year — any number below 1 is generally classed as exceptional bang for one’s buck.

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