While Vodafone (LSE: VOD) (NASDAQ: VOD.US) is continuing to struggle with bottom-line growth, its balance sheet remains very strong and this could prove to be the catalyst behind improved future performance. In fact, Vodafones focus on Europe continues to slow down its short term progress but, with excellent cash flow and modest leverage, it has the capacity to continue its strategy of buying high quality businesses at discount prices. And, in the long run, this could allow it to grow its bottom line at a rapid rate.
In terms of its current price level, Vodafone has seen investor sentiment pick up sharply over the last six months and its shares have risen by 11% during the period. However, with its yield still being a whopping 5.2%, it appears as though it offers good value for money and could be a strong long term performer.
Old Mutual (LSE: OML) offers investors an excellent blend of income, growth and value. For example, it is forecast to increase its bottom line by 9% in the current year, followed by growth of 11% next year. Thats significantly faster growth than is predicted for the FTSE 100, and means that Old Mutual could arguably deserve to trade at a premium to the wider index.
However, it has a price to earnings (P/E) ratio of just 12.1, which is considerably lower than the FTSE 100s P/E ratio of 16. As such, Old Mutuals share price could realistically rise at a rapid rate and, with it having a yield of 4.1%, it also offers excellent income potential, too. As a result, it could prove to be a worthy addition to your ISA.
Unlike many of its utility peers, Pennon (LSE: PNN) is expected to at least match the growth of the FTSE 100 over the next two years. For example, in the current year its bottom line is forecast to grow by 10%, followed by 5% next year. As such, it deserves to trade on at least the same rating as the wider index.
However, Pennon also offers a degree of stability that cannot be matched by most of its index peers. Even other utilities are less robust than Pennon, with the supply of water having far less political risk and uncertainty than services such as domestic energy supply. As such, Pennons current P/E ratio of 20.7 appears to be very appealing especially when you consider that it also has a yield of 4%.
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