3 More Shares For The Week Ahead: GlaxoSmithKline plc, ITV plc And British American Tobacco plc

I’m continuing my look at some of the tempting companies offering up their latest figures next week, and my thoughts are turned to three that will be bringing us first-half results — some ideas to chew on over the weekend, perhaps, while we await the revelations:

Top pharma

I’ve always had a soft spot for our big pharmaceuticals firms, as despite recent problems with the expiry of some key drugs, they’re the ones that have the financial muscle to drive in whatever direction medical technology might go. As an example of that, GlaxoSmithKline (LSE: GSK)(NYSE: GSK.US) has just received regulatory approval for the world’s first malaria vaccine — it’s only aimed at babies in Africa at the moment and Glaxo will not be making a profit with it, but it’s a headstart in a potentially very lucrative market.

The shares have actually slipped by 8% over the past 12 months to 1,350p as a return to earnings growth is not expected until 2016, but we should be seeing 6% dividend yields in the meantime — only barely covered if that, but Glaxo has the cash to pay them. At Q1 time in May, Glaxo told us it expects revenue to rise at a compound annual growth rate (CAGR) of “low-to-mid single digits” in the 2016-2020 period, with core EPS to show a CAGR of “mid-to-high single digits” in the same period, and we’ll hopefully hear more on that when we get half-time figures on Wednesday.

Televisual entertainment

A day before that, on Tuesday, we should get interim results from ITV (LSE: ITV). If you’d bought ITV shares five years ago, you’d be sitting on a five-bagger today with the price at 271p — and even the last 12 months has seen a 29% gain. And every penny of that gain has been deserved, as ITV has achieved strongly rising earnings to back it up as it has reshaped itself into a quality content provider.

From earnings of 6.4p per share in 2010, ITV more than doubled it to 13.8p in 2014, and forecasters are expecting more of the same in the next two years. The dividend has grown too, but with the share price soaring the yield has remained around 2-2.5%. At Q1 time the firm reported a 14% rise in total revenue, with chief executive Adam Crozier telling of “further growth across all parts of the business as we continue to deliver against our strategy“.

The shares are on a P/E of 15.6 based on 2016 forecasts, and I don’t think that’s too high based on the company’s clear potential.

Profitable weed

Tobacco might be increasingly frowned on, but that hasn’t stopped British American Tobacco (LSE: BATS) shares from putting on 63% over five years. That’s not in the same league as ITV, but it’s more than double the FTSE 100‘s overall performance over the same period. The share price rise did actually falter around mid 2013 and has been flat since, as sales volumes continued to fall and earnings growth tailed off.

But analysts are forecasting a return to growth in 2016, and at Q1 time it appeared that the company is still managing to compensate for falling cigarette volumes with a shift towards more upmarket and more profitable brands — overall volumes fell 3.6%, but Global Drive Brands volumes rose 5.7%.

At 3,584p, British American shares are on a 2016 P/E of under 16, but there’s a well-covered dividend yield of 4.4% on the cards. I wouldn’t buy tobacco shares myself for ethical reasons, but I reckon there’s solid income to be had here for some years to come. First-half results on Wednesday.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.