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3 Shares With Red-Hot Growth Prospects: Vodafone Group plc, Reckitt Benckiser Group Plc And ITV plc

Today I am looking at three FTSE 100 winners poised to deliver exceptional earnings growth.

Vodafone Group

It may appear extraordinary to describe Vodafone (LSE: VOD) (NASDAQ: VOD.US) as a terrific growth pick given that a backdrop of intensifying competition, combined with revenue-bashing regulatory changes and the effect of extensive capital expenditure, are expected to keep the telecoms operator in the red for some time to come.

Indeed, the City expects Vodafone to have punched a hefty 63% earnings decline in the year concluding March 2015 — following on from the previous year’s 13% dip — and a further 5% drop is predicted for fiscal 2016.

Still, I believe that the Newbury business is a terrific selection for those seeking solid growth in the years ahead, starting with a chunky 19% snapback in 2017. Improving economic conditions in Europe are helping to herald a sales turnaround in this critical region, no doubt helped by the multi-billion-pound organic investment scheme to upgrade its data and voice capabilities.

On top of this, Vodafone is also splashing the cash in the red-hot ‘quad-play’ market to boost its cross-selling opportunities — exemplified by its purchase of Kabel Deutschland and Ono in recent years — while it is also expanding its presence in Asia. So although the business trades on relatively-high P/E multiples of 37.4 times and 32.6 times prospective earnings for 2015 and 2016 respectively, I believe that the company’s vast investment programme makes it a top-notch, long-term growth selection.

Reckitt Benckiser Group

Like Vodafone, household goods manufacturer Reckitt Benckiser (LSE: RB) has seen revenues stutter more recently as macroeconomic pressure on retail conditions has bitten. Still, I believe that the top line should pick up in the coming years once current cyclical woes abate, and the firm’s extensive exposure to developing regions allows it to cotton onto the strident spending power of the rising middle classes.

Reckitt Benckiser is anticipated to follow last year’s 4% earnings rise with an extra 3% advance in 2015. But earnings are really expected to take off from next year as demand growth clatters through the gears, and a 7% advance is currently pencilled in.

Granted, these figures are hardly jaw-dropping and Reckitt Benckiser still deals on P/E multiples comfortably above the threshold of 15 times or below which is generally regarded attractive value for money — the firm boasts figures of 25.4 times and 23.8 times for 2015 and 2016 respectively.

However, the tremendous pricing power of Reckitt Benckiser’s sector-leading labels — right through from Nurofen pain relievers through to vanish laundry products — makes it a reliable earnings generator even in times of sales pressure, a quality which I believe merits this premium rating. And with the firm expected to ramp up its acquisition policy sooner rather than later, I expect the sales outlook to receive a further welcome shot in the arm.


Broadcasting play ITV (LSE: ITV) has a brilliant pedigree of generating dependable earnings growth year after year, a phenomenon which the City does not expect to cease any time soon.

With the company aggressively expanding its production unit — its ITV Studios arm made three acquisitions in 2014 and just last month purchased The Voice producer Talpa Media for £355m — ITV is now a global powerhouse, a quality which helped revenues from this unit rise 9% last year to £933m.

As a consequence the abacus bashers expect ITV to punch another year of strong earnings growth in 2015, with the bottom line anticipated to swell an extra 13%. And an additional 8% rise is forecast for next year.

These projections leave the business changing hands on P/E ratios of 17.3 times for this year and 16 times for 2016, figures which I consider decent value given ITV’s exceptional long-term earnings outlook. With established favourites like Coronation Street and The X Factor continuing to bring the ad revenues in, and the company also rolling out new channels in the UK during the past year, I believe the bottom line should continue to swell.

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Royston Wild has no position in any 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.