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3 Shares With Terrific Growth Prospects: GlaxoSmithKline plc, Unilever plc And Talktalk Telecom Group PLC

Today I am looking at three FTSE favourites primed to deliver exceptional growth.

GlaxoSmithKline

It is true that GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) — like much of the pharmaceuticals sector — could be considered a risky pick for those seeking copper-bottomed growth prospects. Of course the business of drugs development is a rocky road fraught with setbacks and vast capital outlay, a situation made all the worse as the Brentford firm needs to get the next generation of revenues-drivers on the shelves ASAP to mitigate the inevitability of further heavy patent losses.

However, I believe that GlaxoSmithKline has both the know-how and financial clout to navigate these treacherous waters. The medicines play is not quite out of the woods just yet, however, and is anticipated to endure a 7% earnings slide in 2015, a result that would represent the fourth consecutive annual slip. But the bottom line is expected to improve from next year, and a 5% bounce is currently pencilled in by the City for 2016.

These figures leave GlaxoSmithKline dealing on a P/E ratio of 17 times predicted earnings for this year, although this reduces to 15.9 times for 2016. Even though this remains above the touchstone of 15 times which represents decent value for money, I reckon that GlaxoSmithKline’s rejuvenated product pipeline — and increased healthcare investment in emerging markets to — drive earnings through the roof.

Unilever

And in my opinion Unilever (LSE: ULVR) is also set to benefit from the rising financial might of developing regions. The company currently sources 60% of sales from these places, and with population levels and personal incomes here heading for the stars, I expect revenues at the firm to follow suit. Indeed, Unilever noted last month that it is “starting to see more tailwinds than headwinds in our markets,” lessening fears of prolonged economic cooling and the subsequent impact on customer spending.

Accordingly the calculator bashers expect Unilever to keep earnings ticking higher with a 12% advance in 2015, and an extra 8% rise is forecast for the following year. These figures leave the business dealing on expensive P/E multiples of 21.8 times for this year and 20.3 times for 2016.

Still, I believe the strength of Unilever’s blue ribbon labels — stretching from Flora spreads and Dove soap through to Domestos bleach — fully justifies this premium rating. The terrific pricing power of these brands has enabled the company to shrug off the effect of cyclical headwinds in emerging markets and keep its growth story rolling. And with the company ploughing huge sums into innovating these brands, I believe the sales outlook will remain more than rosy at Unilever.

Talktalk Telecom Group

I believe that Talktalk (LSE: TALK) is a great way to cotton onto surging demand at Britain’s multi-services providers. The company boosted its internet and TV businesses through the purchase of Tesco’s blinkbox and Tesco Broadband divisions in January, and is rumoured to be chasing the supermarket’s Tesco Mobile arm to boost its quad-play capabilities still further. Talktalk has already reported surging customer interest, and saw aggregate TV, mobile and broadband take-up hit record levels during January-March.

Like GlaxoSmithKline and Unilever, Talktalk may not be the most attractive selection on the market for value hunters, at least in the immediate term. The business is anticipated to deliver meaty earnings growth of 73% and 42% for the years concluding March 2016 and 2017 correspondingly. Consequently prospective growth for this year creates a heady P/E multiple of 24.3 times, although this slips to 15.2 times for 2017.

And I believe that investors should take notice of the price to earnings to growth (PEG) numbers for these years, ratios which give a true indication of Talktalk’s cheapness relative to its earnings prospects. The business sports a reading of just 0.3 for this year and 0.4 for the following 12-months, well below the watermark of 1 which represents terrific bang for one’s buck.

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Royston Wild owns shares of Unilever. The Motley Fool UK has recommended GlaxoSmithKline. The Motley Fool UK owns shares of Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.