4 Stocks Set To Beat The FTSE 100: Standard Chartered PLC, Genel Energy PLC, Next plc And Compass Group plc

These 4 stocks could be worth adding to your portfolio right now: Standard Chartered PLC (LON: STAN), Genel Energy PLC (LON: GENL), Next plc (LON: NXT) and Compass Group plc (LON: CPG)

| 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.

Standard Chartered

Despite rising by 13% in the last three months, shares in Standard Chartered (LSE: STAN) continue to offer excellent value for money relative to the FTSE 100. For example, they trade on a price to earnings (P/E) ratio of just 11.1, which is considerably less than the FTSE 100’s P/E ratio of around 16.

Certainly, the future of Standard Chartered is set to be one of change, with a new management team likely to make efficiencies and rationalise the business. They may also, however, increase dividends per share at a rapid rate. That’s because Standard Chartered currently pays out just 53% of profit as a dividend which, for a bank that has remained highly profitable throughout the credit crunch, seems to be rather modest.

As such, a combination of a rapidly growing dividend, very attractively priced shares and the potential for Chinese stimulus to boost the Asian economy mean that Standard Chartered should beat the FTSE 100 over the medium term.

Genel

Shares in Genel (LSE: GENL) continue to disappoint and are now down by 16% since the turn of the year. That’s at least partly because of uncertainty surrounding the company’s operations in Kurdistan, with the political climate continuing to be relatively challenging.

As such, Genel’s share price currently offers a very wide margin of safety and this reduces the risk to the company’s investors, while at the same time also increasing the potential reward. For example, Genel has a price to earnings growth (PEG) ratio of just 0.2 and this means that even if the company’s upbeat earnings forecasts are missed, its shares may not react so unfavourably moving forward. And, if Genel does perform as expected, then a share price rise could be on the cards.

Next

With the UK economy moving from strength to strength, UK-focused consumer stocks such as Next (LSE: NXT) could be a great place to invest. Certainly, Next’s shares lack value at the present time, with the company being expected to grow its bottom line in the mid-single digits over the next two years and its shares having a P/E ratio that is broadly similar to that of the wider index.

However, where Next could beat the FTSE 100 is with regard to its defensive merits. For example, it has a beta of just 0.7 and, with considerable turbulence expected during the rest of the year, Next’s shares could outperform a falling FTSE 100. Furthermore, its sales and profitability should remain robust even if the UK economy experiences a challenging period – as was seen with Next’s great run of profitability during the credit crunch.

Compass

Over the last five years, shares in Compass (LSE CPG) have risen by a whopping 11%, which is a far superior performance to the FTSE 100. And, looking ahead, there could be more to come, since Compass offers its investors a hugely consistent and robust earnings profile.

Of course, that’s to be expected, since the provision of catering and other support services is generally one which offers great earnings visibility. And, looking ahead, investors may be willing to pay a significant premium for this relative certainty, with Compass’ P/E ratio of 21.5 having the potential to move higher due to a bottom line that is expected to rise by a hugely impressive 13% in the current year.

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 Standard Chartered. 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 »