With the FTSE 100 pulling back in recent weeks, now could be a good time to buy shares in high-quality companies at even more attractive prices.
After all, the long-term prospects for the world economy still seem bright and, although the Eurozone continues to deliver disappointing levels of growth, a renewed stimulus programme could help it to pull through a challenging period more quickly.
So, here are three companies that you may have overlooked for a while, but that now offer great value and great prospects.
With the cost of pay-tv rights being huge, its little wonder that BT (LSE: BT-A) is due to report earnings growth of just 3% in the current year. However, the addition of sports rights such as the Champions League football should add value over the long run and, as soon as next year, BTs bottom line growth rate is expected to rise by 8%.
In addition, BT remains an attractive income stock. It currently yields 3.4%, but has a payout ratio of only 44%. This means that dividends per share could rise at a faster rate than profit moving forward, which offers investors in the company a highly desirable mix of income and growth potential.
The last few years have been rather unusual for Standard Chartered (LSE: STAN). Thats because the Asia-focused bank rode out the credit crunch in superb style increasing the bottom line while most of its peers were on the brink of collapse. However, over the last couple of years, it has experienced disappointing performance, with market sentiment being weakened due to allegations of wrongdoing and a profit warning earlier this year adding to its woes.
However, with earnings growth of 10% pencilled in for next year and shares in the bank having a price to earnings (P/E) ratio of just 10.2, Standard Chartered has a price to earnings growth (PEG) ratio of 1. This indicates growth at a reasonable price and, as such, a return to more prosperous times could lie ahead for its investors.
Although ARMs (LSE: ARM) earnings growth rate is slowing somewhat, it remains a hugely attractive growth play. For example, it is forecast to grow the bottom line by 23% next year, which is around four times that of the wider market.
Despite this, ARM continues to see its share price decline. It is now down 10% over the last year and this means that it offers good value for money. For example, ARM has a PEG ratio of 1.4 and, with its nimble and idea-focused business model still providing it with a competitive advantage, could turn out to be a strong performer in future.
While ARM, Standard Chartered and BT all have bright prospects, they’re not the only companies that could help you retire rich. So, which other shares should you buy, and why?
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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.