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4 Stellar Stocks With Compelling Growth Stories: Lloyds Banking Group PLC, Supergroup PLC, WH Smith Plc And BT Group plc

Today I am looking at four FTSE giants poised to explode.

Lloyds Banking Group

I believe that banking giant Lloyds (LSE: LLOY) (NYSE: LYG.US) could be set to enjoy excellent earnings growth in the coming years. Indeed, spiking optimism surrounding the bank’s earnings profile has been boosted by further government share sales during the past month — taking the taxpayers’ stake to less than 20% — followed by news that stock will be made available to retail investors possibly as early as the autumn. This provides plenty of vindication over the hard work management has undertaken in recent years to transform the ailing institution.

Since the Treasury ploughed in to rescue the bank more than five years ago, a programme of significant restructuring has seen Lloyds emerge as a much more agile, earnings-generating machine, complimenting the business’ terrific presence on the UK High Street. So although the firm is expected to record small 1% earnings improvements in both 2015 and 2016, I believe that Lloyds should see earnings take off thereafter in line with a steadily-improving UK economy.

And with the bank changing hands on ultra-low P/E multiples of 10.5 times prospective earnings through to the end of 2016 — a number around or below 10 times is widely considered a steal — I reckon investors can do a lot worse than Lloyds, particularly as the firm’s retail-focussed operations make it a much less-risky earnings pick than many of its sector rivals.

Supergroup

I believe that Supergroup (LSE: SGP) is a solid choice for those seeking explosive earnings expansion looking ahead. The purveyor of the blue ribbon Superdry brand is embarking on a massive expansion drive across Europe, a scheme that helped push revenues 18.4% higher during January-April. On top of this, Supergroup’s decision to secure exclusive distribution rights across the lucrative US, Canadian and Mexican marketplaces back in March also marks a critical step in the firm’s long-term growth story.

Supergroup is expected to follow a 3% bottom-line uptick in the year concluding April 2015, results for which are due on July 9, with breakneck expansion of 11% and 13% in 2016 and 2017 correspondingly. And this predicted earnings acceleration drives a P/E ratio of 17.9 times for the current year to 15.3 times for 2017 — any reading around or under 15 times represents attractive value.

WH Smith

Shares in centuries-old stationer WH Smith (LSE: SMWH) have enjoyed a terrific spurt during the past month as its turnaround strategy continues to deliver. Total sales edged 1% higher during March-May, the company announced this month, and I expect till activity to keep heading northwards as new stores pop up and improving retail conditions drive custom higher. And ‘Smiths’ is also embarking on an extensive cost-cutting programme to further bulk up the bottom line.

As a result, WH Smith is expected to keep its long-running growth story in business, with earnings growth of 9% and 8% forecast for the years concluding August 2015 and 2016 correspondingly. Such projections leave the High Street stalwart dealing on respectable P/E multiples of 17.9 times for this year and 16.4 times for 2016, numbers that I fully expect to continue edging lower in the years ahead.

BT Group

With demand for multi-play entertainment services taking off, I believe that the bottom line is set to keep swelling at BT (LSE: BT-A). The company has invested heavily to bolster the quality of its packages, from its rolling fibre-laying programme through to £12.5bn acquisition of mobile giant EE earlier this year. And the London firm intensified its fight with Sky this week by offering Champions League football free to customers who take up its both its TV and broadband products.

The telecoms giant has seen earnings move consistently northwards in recent years, although this trend is anticipated to come to an end in the year concluding March 2016 as its ambitious capex drive finally catches up with it — a 3% decline is currently pencilled in by the City. Still, this is expected to represent a mere blip in the company’s growth story, and a 5% rebound is chalked in for 2017. Consequently BT changes hands on very reasonable P/E numbers of 14.1 times and 13.5 times for 2016 and 2017 correspondingly.

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Royston Wild 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.