2 growth stocks I’d always buy over Barclays plc

If City forecasts are to be believed, British banking behemoth Barclays  (LSE: BARC) has a bottom line that is expected to detonate imminently.

In 2017 earnings at the FTSE 100 business are predicted to rise 33%. And another hearty leap, this time by 31%, is anticipated for next year.

Such predictions make the financial giant decent value for money, on paper at least — not only does it boast a forward P/E rating of just 11.7 times, but a corresponding PEG reading of 0.4 falls below the bargain watermark of 1.

Still, there are a number of items that are persuading me to still stay away from Barclays. While restructuring measures are now complete, signs that the bank’s core operations are beginning to struggle is a major cause for concern, as is the hefty uptick in PPI-related penalties — another £700m was stashed away for the first half of 2017 to cover the cost of fresh claims.

As I believe Barclays may be in danger of disappointing growth hunters, in both the near term and beyond, I have picked out two stocks with stronger investment potential than the Footsie-quoted bank.

Motoring ahead

Improving market conditions over the past year has propelled the share price of Hastings Group  (LSE: HSTG) to the stars in recent times, the share advancing 40% in the past six months alone. And I do not think the party is over just yet.

The car insurance specialist saw gross written premiums gallop to £462m during January-June, it announced last week, up 28% year-on-year. The FTSE 250 company’s decision to focus on price comparison websites is clearly paying dividends, helping the number of live customer policies rise 15% to 2.54m, and helping its share of the motor market advance to 7% from 6.2% a year earlier.

The number crunchers expect Hastings to record a 72% earnings jump in 2017, and to follow this with a 17% advance next year. As a consequence the company trades on a decent prospective P/E multiple of 15.8 times, as well as a PEG ratio of just 0.2 times.

I reckon there remains plenty of upside at these prices.

A tasty treat

Nichols (LSE: NICL) is another London stock expected to keep doling out great bottom-line growth.

The drinks manufacturer can count on much-loved labels like Vimto and Panda to deliver meaty sales expansion, brands which are allowing it to outperform the broader UK market. Whilst total soft drink sales in Britain increased 2.9% (according to Nielsen), Nichols saw revenues at home grow 6.7% in the period.

And Nichols can also look to foreign markets to churn out excellent profits growth in the years ahead — the company saw sales in its international markets stomp 33.5% higher in the first half.

The company has a reputation as a reliable deliverer of profits growth year after year, and the calculator bashers expect this trend to continue for some time yet. Another 7% advance is chalked in for 2017, and growth is expected to improve to 8% in the next period.

Nichols may not pack the same attractive paper valuations as either Hastings or Barclays, the firm trading on a forward P/E ratio of 26.2 times. But I believe its sterling performance at home and abroad makes Nichols worthy of such a premium.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Barclays. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.