Why AstraZeneca plc & Dixons Carphone PLC Are Red-Hot Growth Stars!

Today I am looking at the growth prospects of two FTSE 100 big hitters.

The prescription for healthy returns

At first glance pharma giant AstraZeneca (LSE: AZN) may be one of the last FTSE 100 plays to be considered irresistible to growth seekers.

Thanks to the relentless top-line pressure caused by patent expirations across key labels, AstraZeneca has seen earnings recede during each of the past three years. And the City does not expect things to improve any time soon — a marginal dip this year is forecasted to be followed with a 6% fall in 2016.

And the London-based firm faces additional hurdles down the line as exclusivity on stomach acid treatment Nexium ran out this year, and cholesterol battler Crestor is due to lose patent protection in 2016.

Still, I am confident that AstraZeneca’s reinvented product pipeline — combined with galloping emerging market healthcare investment — will provide the ammunition to get the bottom-line firing again. The business currently has its eyes on gaining approval for between eight and ten new drugs by the end of next year alone.

On top of this, AstraZeneca remains busy on the M&A trail in highly-lucrative areas, aimed at bolstering its promising pipeline still further. Just today the business announced the purchase of Takeda Pharmaceutical’s respiratory operations for $575m, and the firm is also weighing up a deal to acquire Dutch cancer specialists Acerta Pharma.

With AstraZeneca trading on a very reasonable P/E rating of 16.8 times for 2016, I reckon now could be a great time to invest in the medicine firm’s exciting growth prospects.

Stick a star in your trolley

I believe that electronics and white goods retailer Dixons Carphone (LSE: DC) should also see earnings surge in the coming years thanks to steadily-improving conditions on the UK High Street. Britons are enjoying steadily-fattening wallets thanks to persistently-low inflation, rising wages and improving employment levels, and I reckon these factors should continue driving sales for some time to come.

Dixons Carphone cheered the market in midweek business as it released its latest set of interims. The London-based company saw revenues advance 5% higher between May and October, a result that blasted pre-tax profit 23% higher to £121m. Consequently the gadget specialists hiked the interim dividend by almost a third to 3.25p per share.

Despite the impact of intense market competition and adverse currency effects across its foreign businesses, Dixons Carphone’s ability to grab market share in all its major territories allowed it to enjoy chunky sales growth in the period. With the hard work of last year’s merger of Dixons Retail and Carphone Warehouse now largely completed, I believe performance should continue to pick up in the months and years ahead.

The number crunchers expect earnings at Dixons Carphone to shoot 6% higher in the 12 months to April 2016, and an extra 11% bounce is predicted for the following year. I reckon a P/E rating of 16.8 times provides great value given the firm’s excellent upward momentum.

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