Today I am looking at two FTSE giants throwing up plenty of value for savvy stock seekers.
Bank on a bargain
Thanks to the improving health of the British economy, I believe that banking goliath Lloyds (LSE: LLOY) is a sound choice for both growth and income investors. The business has seen its share price trend steadily lower since the summer prices hit their cheapest since April 2014 just this week but I believe this presents a sound buying opportunity.
Lloyds is expected to enjoy a 2% earnings advance in 2015, resulting in a P/E multiple of just 8.6 times any reading below 10 times is widely considered exceptional value for money. And despite predictions of a 6% slide next year, the banking giants earnings ratio remains at just 9.3 times.
Sure, chief executive Antnio Horta Osrios decision to scale back Lloyds global footprint and re-focus its attention on the British high street may make it less of an exciting growth pick than many of its sector rivals. But such measures naturally make Lloyds less of a risky proposition, a particularly promising signal for dividend chasers.
And when you factor in the fruits of extensive cost-slashing on the firms cash pile Lloyds CET1 ratio stood at a healthy 13.7% as of September the omens look promising for the firms recently-resurrected dividend policy. Indeed, the City expects a dividend of 2.4p per share for 2015, yielding a chunky 3.4%. And this figure leaps to 5.3% for 2016 amid forecasts of a 3.8p reward.
Brew up brilliant returns
Like Lloyds, I believe pub operator Marstons (LSE: MARS) is a splendid stock choice for bargain hunters. The Midlands business announced today that underlying revenues leapt 7% during the 12 months to September 2015, to 845.5m, a result that drove underlying pre-tax profit 10% higher to 91.5m.
The market responded by sending the companys share price almost 3% higher from Wednesdays close, and I for one share this current investor optimism. The restructuring programme over at Marstons helped drive profits higher across all segments, despite the business operating just 1,600 outlets at present, down from more than 2,000 just two years ago.
While the closure of underperforming pubs is clearly paid off handsomely, and the companys vow to open more than 20 new-build pubs in the current period promises to deliver further gains, Marstons is also benefitting from surging demand for its home-brewed ales. Indeed, the successful rollout of labels like Hobgoblin Gold helped Marstons enjoy volume growth of 15% last year.
Marstons is clearly a business with strong momentum, and the City expects earnings to advance a further 6% in the year to September 2016, creating a mega-low P/E multiple of 11.7 times. And when you throw in a projected dividend of 7.3p per share, yielding a market-bashing 4.6%, I believe value hunters will find the brewer hard to overlook.
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