Today I am looking at the investment potential of three London-quoted heavyweights.
Engineer a fortune
Despite the release of disappointing British construction data today output during November slumped to a seven-month nadir of 55.3 I believe builder Galliford Try (LSE: GFRD) remains a sterling stock pick.
The Uxbridge firm has a terrific record of chalking up top-quality contracts across the building industry, and orders at Galliford Trys Housebuilding and Construction arms surged 40% and 27% respectively in the year to June. And since then even more business has rolled through the doors.
With Galliford Try expected to enjoy another double-digit earnings uptick in the 12 months to June 2016 this time by a hefty 11% last years dividend of 68p per share is anticipated to rise to 79.9p, yielding a brilliant 5.6%. And I expect shareholder returns to continue rising as UK economic growth clicks higher.
Dividends set for take off?
While corporate jet activity in the US has remained grounded in recent times, I reckon an improving economy across the Atlantic could send more planes into the air from next year and beyond, a promising sign for aviation services provider BBA Aviation (LSE: BBA).
Indeed, the London-based firm underlined its long-term confidence in the business jet market during the autumn through the $2.07bn acquisition of Landmark Aviation. The move significantly expands BBA Aviations US footprint, and boosts its global terminal base by more than a third.
Despite an anticipated 4% earnings slide in 2015, BBA Aviation is expected to increase the dividend from 11.5 US cents per share in 2014 to 11.8 cents in 2015, yielding a sizeable 4.4%. And an anticipated 8% bottom-line bounce in 2016 is expected to push the payment to 12.3 cents, yielding 4.6%.
Keep shopping around
Improving sales data over at Sainsburys (LSE: SBRY) has provided trader appetite with a solid shot in the arm in recent weeks. Retail researcher Kantar Worldpanels latest release showed till rolls at Sainsburys improve 1.5% during the 12 weeks to November 8, the only rise amongst Britains Big Four supermarkets and nudging its market share 20 basis points higher, to 16.6%.
But investors should learn the lessons of Tesco (LSE: TSCO) a year ago, the Cheshunt firm having also enjoyed a brief sales uptick as massive discounting paid off. But revenues turned south again shortly afterwards and the firms share now stands at 27.9%, slipping from 28.7% a year ago.
While Sainsburys recent revenues revival should of course be welcomed, investors should not lose sight of the rampant march of Aldi and Lidl. Indeed, Kantar noted that the discounters show no sign of stopping, and with plans to open hundreds of stores between them, theyll noticeably widen their reach to the British population.
As a result, I believe further earnings troubles can be expected at Sainsburys as the sectors price wars intensify. The London firm is already expected to cut last years dividend of 13.2p per share to 10.7p in the year to March 2017, and although a chunky 4.2% yield may be tempting, I believe the murky profits picture over at Sainsburys makes the retailer a risk too far presently.
So if you are looking for even more blue-chip beauties like those mentioned, I strongly recommend you check out this totally exclusive report that highlights a hatful of FTSE superstars waiting to deliver terrific shareholder gains.
Our “5 Dividend Winners To Retire On” wealth report highlights a selection of incredible stocks with an excellent record of providing juicy shareholder returns. Among our picks are top retail, pharmaceutical and utilities plays that we are convinced should continue to provide red-hot dividends.
Click here to download the report — it’s 100% free and comes with no further obligation.