The Motley Fool

Why National Grid plc (+11%), British American Tobacco plc (+12%) and JD Sports Fashion plc (+32%) should keep charging

Today I’m looking at three Footsie stars that should continue shooting higher.

An electrifying rise

Increasing trepidation concerning the health of the global economy has propelled National Grid (LSE: NG) steadily higher during the past six months.

Sign up for FREE issues of The Motley Fool Collective. Do you want straightforward views on what’s happening with the stock market, direct to your inbox? Help yourself with our FREE email newsletter designed to help you protect and grow your portfolio. Click here to get started now — it’s FREE!

Indeed, the electricity network operator’s share price has printed regular record highs since the middle of November, with a fresh peak of £10.08 per share hit just this week. And I believe there’s plenty of fear swirling around the system to keep pushing National Grid higher.

Utilities have always been a magnet for those seeking reliable earnings expansion in troubled times. But while the likes of Centrica and United Utilities face a murky profitability outlook thanks to increased competition and/or rising regulatory pressures, National Grid’s vertically-integrated structure enables it to avoid such problems, making it a more secure stock selection in my opinion.

And despite its recent share price advance, I believe the company still provides exceptional bang for your buck.

National Grid is expected to see earnings edge up 3% and 1% in the periods to March 2017 and 2018, respectively, resulting in highly-attractive P/E ratings of 15.8 times and 15.2 times, respectively.

Meanwhile, dividend yields of 4.4% and 4.5% for 2017 and 2018 smash the FTSE 100 average of 3.5%, further illustrating National Grid’s terrific value.

Train to win

Trainer-and-tracksuit giant JD Sports (LSE: JD) has proved to be the standout retail performer of recent times. And the market has responded by sending the firm’s share price around a third higher since mid-November alone.

JD Sports’ ascent has been less turbulent than that of National Grid as it has furnished the market with a steady stream of blockbuster updates. Indeed, the company advised in April that revenues in the year to January 2016 leapt 20%, to £1.8bn, a result that powered pre-tax profit to a record £131.6m, up 45% year-on-year.

And I expect the bottom line to keep on detonating as JD Sports’ European expansion drive delivers — the firm opened another 38 JD outlets on the continent last year alone.

The City certainly shares my bullish view, and the retailer is expected to record earnings growth of 7% in 2017 and 11% the next year.

These forecasts push a P/E rating of 18.3 times for the current period to 16.3 times for 2018, and I expect JD Sports’ multiples to keep toppling as demand from fashion-conscious customers takes off.

Tobacco titan

Like National Grid, British American Tobacco (LSE: BATS) has also been a beneficiary of safe-haven buying in recent months, the defensive nature of tobacco demand winning favour with risk-averse investors.

And improving performances across key labels have done British American Tobacco’s cause no harm, either. Huge market share grabs saw volumes of the firm’s ‘Global Drive Brands’ jump 10.5% year-on-year during January-March. And I expect heavy investment in these revenues-driving labels to keep sending sales higher.

The number crunchers expect earnings at British American Tobacco to head up 11% and 9% in 2016 and 2017, respectively. These projections result in decent P/E ratings of 18.1 times and 16.6 times.

But it’s in the dividend stakes where British American Tobacco really sets itself apart, the company is carrying yields of 3.9% for this year and 4.1% for 2017. I believe the firm remains an exceptional stock selection for savvy value hunters.

But British American Tobacco isn't the only top-tier dividend stock currently available to investors.

Indeed, this special Fool report by The Motley Fool's crack team of analysts identifies what I believe is one of the best income stocks money can buy.

Our BRAND NEW A Top Income Share report looks at a hidden FTSE superstar enjoying breakneck sales growth across the continent, and whose ambitious expansion plans look set to power dividends still higher in the years ahead.

To discover more just click here and enjoy this exclusive 'wealth report.' It's 100% free and comes with no obligation.

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