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3 Stocks Set To Post Stellar Returns: Vodafone Group plc, SABMiller plc And Compass Group plc


Vodafone (LSE: VOD) (NASDAQ: VOD.US) has made an excellent start to 2015, with the mobile telecoms company seeing its share price rise by 6% since the turn of the year. A key reason for this is improved market sentiment regarding the Eurozone, with a Greek Exit now not being seen as the beginning of the end for the single currency zone, while QE is causing the mood of investors to pick up somewhat.

With Vodafone focused on Europe following its acquisition spree and the sale of its North American operations last year, this is important for the company. And, while its bottom line has been a major disappointment, its future potential appears to be rather enticing. So, while Vodafone has posted a fall in profit in three of the last five years, it is expected to deliver a 19% rise in earnings next year. This, coupled with a yield of 5%, could be enough to improve investor sentiment even further and push the company’s shares northwards during the course of 2015 and beyond.

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Today’s update from SABMiller (LSE: SAB) (NASDAQOTH: SBMRY.US) was somewhat disappointing, with the alcoholic beverages company reporting a flat profit for its recently ended financial year. This was, of course, in-line with market expectations and, as a result, shares in the company are up by 1% at the time of writing.

The key reasons for the disappointing profitability are currency headwinds and challenging trading conditions in a number of its key markets. Both of these factors are likely to hurt the current year’s financial performance, although SABMiller is still expected to post an improved performance this year, with earnings forecast to rise by 5%, and by a further 8% next year.

Clearly, SABMiller remains a relatively appealing bid target, with its stable of brands and strong balance sheet giving it appeal to a number of potential suitors. And, with there being scope to further expand its soft drinks business and cut costs further, the medium to long term could still be a very bright one for investors in SABMiller.


Compass (LSE: CPG) may not be the most exciting of companies. After all, the provision of catering services is hardly as exciting as mining or technology, for example, However, in terms of capital gains for its investors, few companies can compete with Compass over the last ten years, with it having posted share price gains of 351% during the period.

And, looking ahead, there could be more to come, since Compass offers supremely reliable top and bottom line growth potential. For example, its sales are expected to rise by 12.9% during the next two years, with improving margins set to help it to deliver profit growth of 23.2% during the same time period.

Such consistently high and robust growth is likely to cause Compass’ shares to be bid up over the medium term and, while they trade on a price to earnings growth (PEG) ratio of 1.7, which is slightly higher than desired, their stability makes them well worth it.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the 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.

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