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

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.

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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.


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.


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.


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.

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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.