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3 Shares For The Week Ahead: Persimmon plc, Admiral Group plc And Imperial Tobacco Group PLC

Interim reporting season for companies whose years end in December is still with us, and we have a mixed but intriguing batch coming our way next week:

On Tuesday, 18 August, we should have first-half figures from Persimmon (LSE: PSN). We have a fair idea of what to expect from the housebuilder’s trading update released in July, when the we heard that confidence had improved, with completions rising 7% to 6,855 units. That, coupled with a 4% rise in average selling prices, helped push revenues up 12%.

The company paid 95p per share as the third installment of its capital return plan in April, and in addition to that we’ve seen the share price climb by 58% over the past 12 months, to 2,095p — and over five years, shareholders have enjoyed a six-bagger.

Yet even after such a performance, the shares are still only valued close to the market average with a forward P/E of 14.2, dropping to 12.5 on 2016 forecasts. The rapid earnings growth of recent years should slow significantly, but the shares still look good value to me.

Intense competition

The motor insurance business is a very competitive one, and a squeeze on margins has led analysts to forecast a 10% fall in EPS for Admiral Group (LSE: ADM) this year. But despite that, the share price has held up reasonably well with a 10% gain over the past 12 months. And we saw a total 2014 dividend payment of 98.4p, equating to a 6.8% yield on today’s 1,449p share price.

The dividend is split about 50/50 between normal and special portions, so it’s potentially far more volatile than others — and there’s a fall in line with the expected EPS drop forecast for this year. But if Admiral can keep turning over the bulk of its earning to investors as dividend cash, we should be seeing total yields of consistently around 6% or better.

How’s the dividend really looking for this year so far? Find out on Wednesday, when Admiral releases first-half figures.

Tobacco still growing?

Is the tobacco business really in the “dead but won’t lie down” category? If you think so, you’ll have written off Imperial Tobacco (LSE: IMT), which will reveal its third-quarter performance on Wednesday.

But although overall tobacco consumption is falling, Imperial’s shift to higher-margin premium brands should help it resume earnings growth this year — the City is predicting a 2% rise for the year ending September 2015, followed by a 12% jump next year. Dividends are on the up too, and should reach 4.6% in 2016 based on today’s share price of 3,280p.

But the share price has climbed 53% in the past two years, and those looking to the longer term might not see a prospective 2015 P/E of a 16 as a bargain.

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Alan Oscroft 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.