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Are Barclays PLC, MITIE Group PLC & Admiral Group plc ‘Screaming Buys’?

While the FTSE 100 has been relatively stable since its August correction, Barclays (LSE: BARC) has endured a significant fall in its share price. In fact, during the last three months the bank has posted a decline in its valuation of 14%. A key reason for this is negative investor sentiment, with the appointment of a new CEO seemingly failing to ignite excitement or a positive outlook among the investment community.

Certainly, there is work for a new CEO to undertake at Barclays, but Jes Staley inherits a company which is moving in the right direction. For example, Barclays posted a rise in its earnings of 13% this year and, looking ahead, is expected to continue this strong result with an increase in its bottom line of 28% this year and a further 19% next year. This puts the bank on a forward price to earnings (P/E) ratio of 8.3 after its recent fall, which indicates that an upward rerating is highly likely.

The problem for Barclays, though, seems to be invigorating investor interest in its shares. This issue could continue in the first half of 2016 when part-nationalised UK banks are expected to be at least partly sold off by the government, leaving Barclays out of the main spotlight within the UK banking space.

However, as has been undertaken at other companies with low dividend payout ratios, Barclays seems likely to increase dividends per share at a rapid rate. For example, they are due to rise by 27% next year and this puts Barclays on a forward yield of 3.8%. Further such gains seem highly likely when the bank’s profitability gains are taken into account, which has the potential to push its share price significantly higher.

Also offering strong income prospects is Admiral (LSE: ADM). Certainly, the car insurance sector is undergoing a challenging period at the present time, which is at least partly due to increases in insurance premium tax. However, with Admiral having a significant share of the market via a number of dominant brands, it appears to be set to overcome near term challenges as evidenced by a bottom line which is due to increase marginally next year.

Furthermore, Admiral is expected to pay out over 12% of its current share price in the form of dividends over the next two years. This makes it one of the most appealing income plays on offer and, with the market currently expecting UK interest rates to be only 1.3% by the end of 2018, investor sentiment in Admiral seems likely to remain strong over the medium term.

Meanwhile, MITIE (LSE: MTO) also offers upbeat income prospects, with the support services business currently yielding 4.1%. As with Barclays, it has the scope to increase dividends at a brisk pace since it currently pays out less than half of profit as a dividend. And, while the company reported a fall in profit today (excluding the positive impact of no repeat restructuring charges), its medium term outlook remains bright.

That’s because MITIE’s healthcare business has disappointed in the first half of the year but, with unprofitable contracts now having been exited, it expects the division to return to profitability in the next 18 months. This has the potential to improve investor sentiment in the company and, with MITIE trading on a P/E ratio of 12.6 and being forecast to increase its earnings by 8% next year, now seems to be a good time to buy a slice of it for the long term.

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Peter Stephens owns shares of Admiral Group and Barclays. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.