Why NOW Is The Time To Buy BAE Systems plc, National Grid plc & ITV plc!

Today I’m running the rule over three blue-chip bargains.

Screen star

Broadcasting bruiser ITV (LSE: ITV) has seen its share price take a pasting so far this year, the stock declining 13% since the first bells of 2016 rang out.

Although prices may have recovered ground in recent days, I reckon there’s plenty of room for ITV to keep on charging. Revenues across the business continue to surge, with net advertising revenues increasing 6% last year, to £1.72bn, and turnover at ITV Studios leaping 33% to £1.24bn.

ITV has a quite brilliant record of punching year-on-year earnings growth. And I believe the business should continue to outperform the television market this year and beyond, helped in no small part by shrewd acquisition activity in key regions.

This view is shared by the City, and earnings are predicted to rise 9% in 2016 and 7% next year, resulting in P/E ratings of just 13.6 times and 12.6 times. And ITV’s strong growth outlook is expected to keep powering dividends higher — the broadcaster sports yields of 3.1% and 3.6% for 2016 and 2017, respectively.

Electrifying potential

I believe that the current nerviness still washing across financial markets makes power provider National Grid (LSE: NG) a perfect stock pick at the present time.

Sure, the FTSE 100 may have galloped from the three-and-a-half-year lows punched last month to perch back around the 6,200-point marker. But there’s still plenty of mud in the system — from Chinese economic cooling to the implications of a possible ‘Brexit’ — to send the index shuttling lower again.

Regardless of the broader economic climate, the essential role of electricity in our day-to-day lives is one that can’t be disputed. With this in mind, network operator National Grid is arguably the most secure stock out there, particularly as utilities peers like Centrica and Severn Trent are pressured by rising regulatory pressure and in some cases fierce competition.

National Grid is expected to follow a 5% earnings advance in the year to March 2016 with a 2% rise in 2017, resulting in a reasonable P/E rating of 16 times for the upcoming period. And investors should sit up and take notice of huge dividend yields of 4.5% and 4.6% for 2016 and 2017, respectively.

A defensive darling

Like Britain’s utilities sector, defence giants like BAE Systems (LSE: BA) have also been a haven for cautious investors in troubled times. And this appeal is likely to remain as strong as ever, a backcloth of rising geopolitical turbulence supporting Western arms demand to keep citizens safe.

As the International Institute for Strategic Studies (IISS) points out, “the rapid expansion of budgets by regional powers has multiplied tensions in Asia, the Middle East and North Africa, and Russia and the post-Soviet space.”

In addition to this, the rising threat from terrorist groups is also driving defence spending from the US, while European arms budgets are also back on the rise to combat the likes of ISIS.

BAE Systems is expected to bounce from a 3% earnings decline in 2016 to a 7% advance in 2017, figures that produce ultra-cheap P/E  ratings of 12.5 times and 11.9 times, respectively. And expectations of further dividend growth produce plump yields of 4.3% for 2016 and 4.4% for next year.

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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.