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One FTSE 100 share I’d always buy instead of BT Group plc

There is no shortage of shares I would rather buy instead of BT Group (LSE: BT-A) today.

Rising capex bills and a mountainous pension deficit would be a problem at the best of times, but BT is suffering a double whammy as demand for its services is also on the wane. During the three months to June the company saw revenue creep just 1% higher, according to its latest trading statement, or 0.2% on an underlying  basis.

So as I say, I believe there are plenty of companies out there with rosier profits outlooks than the telecoms giant. And Croda International (LSE: CRDA) is one such stock.

Titanic trading numbers

Indeed, my faith in the chemicals colossus received an extra shot in the arm in Tuesday business upon the release of latest trading details.

The FTSE 100 star advised that sales blew 12.8% higher during the nine months to September, and it reported: “The improved sales trend seen in the first half of 2017 continued through Q3 with group constant currency sales up 4.4% in the quarter and 4% year to date.”

In the third quarter sales shot 6.1% higher, to £334.6m, Croda advised, with sales at its core Personal Care and Performance Technologies arms rising 7.5% and 7% respectively in the quarter at constant currencies. And demand for Croda’s products in hot growth territories also continued to take off — in North America and Asia these rose 8% and 6% in the last three month period, while in Europe revenues improved by 7%.

A terrific all-rounder

Croda’s bubbly release today sent its share price spiralling higher again. It struck fresh record peaks above £42 per share earlier in the session, and although it has since settled down again, the stock remains 4% higher from Monday’s close.

Despite these heady advances, however, I believe Croda still offers exceptional value. Sure, a forward P/E ratio of 24.1 times may sail above the widely-accepted value watermark of 15 times, but a sub-1 corresponding PEG multiple of 0.8 suggests the firm is actually attractively priced relative to its growth prospects.

And with earnings at the East Yorkshire business expected to head skywards — increases of 29% and 7% are anticipated by the City for 2017 and 2018 respectively — its ultra-progressive dividend policy is expected to keep rolling too.

Last year’s 74p per share ordinary dividend is predicted to march to 81.4p in the present period, and again to 88.4p 2018, meaning that a handy 1.9% yield rises to 2.1% next year.

Don’t answer the call!

The outlook for BT in the near-term and beyond is much less compelling, and this is reflected by pretty-uninspiring broker projections.

In the 12 months to March 2018 the telecoms play is predicted to print a second successive annual earnings reverse, a 6% dip currently predicted. And I believe the 3% anticipated bounce-back for fiscal 2019 is looking less than robust.

So while BT carries pretty compelling valuations (a forward P/E rating of 9.6 times, as well as monster yields of 6% for this year and 6.2% for next year), in my opinion the company’s patchy revenues outlook and massive debt levels are encouraging me to give it a miss right now.

You may regret ignoring this growth tip

But while there remains a lot of uncertainty facing BT in the near term and beyond, the investment case for the stock detailed in this special Fool report is much more compelling, in my opinion.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.