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Why National Grid plc, Fuller, Smith & Turner plc And Just Eat PLC Are Stellar Defensive Stars!

Today I am looking at three low-risk London superstars.

National Grid

The utilities space is of course a traditional haven for those seeking reliable earnings, and subsequently chunky, dividend growth. This position has come under increasing scrutiny, however, as escalating operating costs and — in the case of electricity stocks, at least — the emergence of independent suppliers has eroded their customer bases and caused earnings to fall.

This is certainly the case with Centrica, for example, which is expected to follow last year’s dividend cut with another reduction in 2015. Still, I believe National Grid (LSE: NG) remains a secure bet for those seeking reliable returns — not only does its vertically-integrated model leave it immune to the regulatory pressures affecting the country’s major power suppliers, but of course the firm does not face the same competitive qualms as the rest of the sector.

With National Grid also benefitting from reduced outlay thanks to RIIO price controls in Britain, earnings are expected to edge 2% higher for the years ending March 2016 and 2017 respectively. These readings create very-attractive P/E ratings of 15.4 times and 15 times. And the company’s solid earnings visibility is expected to propel last year’s dividend to 43.7p per share for this year and 44.8p in 2017, yielding a terrific 4.8% and 4.9%.

Fuller, Smith & Turner

Pub operator Fuller, Smith & Turner (LSE: FSTA) furnished the market with yet another positive trading update in end-of-week trade, and the stock was last dealing 0.7% higher from Thursday’s close. The company advised that revenues revved 10% higher during April-September, to £177.7m, with like-for-like sales defying strong comparatives last year to advance 5.6%.

Subsequently pre-tax profit rose 16% during the period, to £21.2m. Demand for beer and ‘pub grub’ at Fuller, Smith & Turner is steadily rising thanks to its sage expansion programme, while improving spending power amongst drinkers is also playing into the company’s hands. And the London firm could enjoy further upside should the chancellor heed its calls for a further cut in beer duty in the Autumn statement.

Helped by the upcoming UEFA Euro 2016 football championships next year, the City expects the business to follow a 74% earnings rise in the year to March 2016 with a 5% advance in the following year. Subsequent P/E multiples of 21 times and 20.1 times may appear expensive at first glance, but I believe Fuller, Smith & Turner’s solid momentum justifies this premium.

Just Eat

Like the brewer, I believe takeaway provider Just Eat (LSE: JE) is a great defensive pick for savvy stock pickers — a cheeky pint and a pizza are popular luxuries regardless of the wider economic climate, after all.

And thanks to Just Eat’s massive investment in technology and marketing, I fully expect orders through the platform to continue taking off. The company advised this month that like-for-like sales exploded 48% during July-September, speeding up fractionally from the previous six months. And Just Eat’s focus on attracting mobile users means that 74% of all orders are now made on such devices, up from 69% a year ago.

Just Eat is predicted to print a 37% earnings surge in 2015, resulting in a hefty P/E ratio of 73.6 times. But this falls to a much-more appetising, if still elevated, multiple of 46.4 times for next year thanks to expectations of a 58% earnings uplift. But with the firm steadily building its virtual menu as well as expanding overseas, I believe this multiple should keep on toppling.

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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.