Immediately following the announcement that Morrisons (LSE: MRW) (NASDAQOTH: MRWSY.US) was looking for a new CEO, its share price rallied by around 4%. Clearly, the market is ready for change and, while the appointment of the next CEO may not cause its shares to surge, a new strategy could do so, as has been the case at sector peer, Tesco.
And, with Morrisons trading on a yield of 4.9%, it seems to offer good value for money and the scope for a share price rise. For example, were its shares to trade on a yield of 4% (which would still make it a very appealing income play), it would equate to a share price gain of 21.6%. While this may not take place in the next few weeks, a new strategy plus a stabilisation in its sales decline could prompt investors to buy Morrisons and push its share price to 225p or above.
Although the outlook for the global economy is more upbeat now than it has been for a considerable amount of time, the Eurozone could still cause investors to remain somewhat cautious in the months ahead. Thats why Imperial Tobacco (LSE: IMT) (NASDAQOTH: ITYBY.US) could be a great stock to own, since its sales are likely to improve whatever the economic weather.
Furthermore, Imperial has expanded its e-cigarette operations with the acquisition of Blu (the biggest e-cigarette brand in the US) and this could persuade investors that it is a much more internationally focused operation which, therefore, offers better diversification than it has in the past.
And, with Imperial having a dividend yield of 4.6%, it seems to offer excellent value for money. In fact, it would be of little surprise for investor demand for its shares to rise so that it yields 3.5% especially given its consistent and above-average growth prospects. Such a level would mean that its shares would trade around 30% higher than at the present time, which could be achievable this year.
Like Morrisons, Centrica (LSE: CNA) is undergoing a period of change at the present time, with its new management team set to put in place a new long term strategy for the business. This could involve a greater focus on its exploration arm since, although the price of commodities has fallen, it could help Centrica to diversify and lessen the effect of political risk on its share price.
In fact, the prospect of an energy price freeze and new regulator under Labour has been a major drag on its share price. And, should Ed Miliband not become Prime Minister, it would be of little surprise for Centricas shares to make strong gains this year. With them having a yield of 5.8%, it has the scope to move over 20% higher and still yield a whopping 4.8%. This highlights just how cheap they are right now.
Of course, Centrica, Morrisons and Imperial aren’t the only stocks that could be worth buying at the present time. That’s why the analysts at The Motley Fool have written a free and without obligation guide called 5 Shares You Can Retire On.
The 5 companies in question offer a potent mix of dependable dividends, stunning growth prospects, and super-low valuations. As such, they could make a positive impact on your portfolio this year.
Click here to find out all about them – it’s completely free and without obligation to do so.
Get FREE Issues of The Motley Fool Collective
Get straightforward advice on whats really happening with the stock markets, direct to your inbox. Help yourself with our FREE email newsletter designed to help you protect and grow your portfolio wealth.
By providing your email address, you consent to receiving further information on our goods and services and those of our business partners. To opt-out of receiving this information click here. All information provided is governed by our Privacy Statement.
Peter Stephens owns shares of Centrica, Imperial Tobacco Group, Morrisons, and Tesco. The Motley Fool UK has recommended Centrica. The Motley Fool UK owns shares of Tesco. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.