LONDON — Since the beginning of 2013, the FTSE 100 is up 6.5%. Not every share has joined the bull market, though. Here are the 10 largest FTSE 100 companies that are trading within 12% of their lowest price in a year. These shares could rise fast if they can demonstrate an improvement in their fortunes. These five stood out in particular.
Royal Dutch Shell
Royal Dutch Shell plc (ADR) (NYSE:RDS.B) is one of the FTSE 100’s true titan companies. The company has more than a century of history behind it, operates in 90 countries around the world and employs 90,000 people. So famous around the world, Shell even makes it into a gag in the Marilyn Monroe film “Some Like it Hot.”
Shell is synonymous with financial strength. The shareholder dividend has not been cut since the end of the Second World War. In 2013, Shell is expected to pay out more in shareholder dividends than any other company in the FTSE 100.
Shell is forecast to make $4.32 per share in 2013, paying a dividend of $1.87. That equates to a 2013 price-to-earnings (P/E) ratio of 8, with a forecast yield of 5.4%.
Imperial Tobacco
In the last five years, Imperial Tobacco Group PLC has increased its dividend by an average of 11.9% per year. In that time, earnings per share (EPS) has increased by an average of 10.7% a year.
Imperial has increased shareholder value by leveraging its brands (Davidoff, Gauloises, West) and its dedicated (addicted) customer base. It is surprising, therefore, to see the shares of a successful company trading within 3% of their low for the year.
The shares now trade on an undemanding valuation. According to my figures, Imperial Tobacco is on a 2013 P/E of 10.8, falling to 10 for 2014. The dividend is forecast to rise 9.5% for the year, meaning that the shares come with an expected yield of 5%.
Wm. Morrison Supermarkets
Morrisons has had a rotten 12 months. In the past year, the shares have fallen 10.5% to the kind of levels not seen since the worst of the financial crisis. According to industry surveys, Morrisons has been losing market share. In an industry where buying power and economies of scale are so important, this is a worrying development.
Unlike rivals Tesco Corporation (USA) (NASDAQ:TESO) and Sainsbury’s, Morrisons has no real online or convenience offering. Analysts fear that this has held back sales growth at the company. In the last year, forecasts for Morrisons’ 2013 profits have fallen 8%.
EPS is forecast to remain broadly unchanged in 2013 and 2014. The dividend is expected to continue rising, putting the shares on a 2013 yield of 4.6%, rising to 4.9% for 2014.
GlaxoSmithKline plc (ADR) (NYSE:GSK)
Shares in pharmaceutical giant GlaxoSmithKline trade 10.5% above a low for the year. They are also just 3% off a 52-week high. This shows just how stable perceptions of the company are.
Along with a portfolio of drugs, Glaxo also owns some consumer brands such as Lucozade and Ribena. The company recently announced that it would be reviewing the future of these drinks brands. This has led to speculation that Glaxo may be preparing to sell. It would likely receive the best part of a billion pounds for this part of its business.
Glaxo is expected to increase its dividend this year and next. That puts the shares on a prospective yield for 2014 of 5.7%. The 2013 P/E is 12.5, falling to 11.4 times the 2014 earnings forecast.
SSE
SSE (previously Scottish and Southern (LSE:SSE) Energy) epitomizes what investors expect from utility companies. In the last five years, its dividend has increased by an average of 7.8% per year. The company has been increasing its dividend to shareholders since its founding in 1998.
Shares in SSE fell recently on the announcement that CEO Ian Marchant will be stepping down in July after 10 years in the role. This coincided with the shares going ex-dividend. SSE has decided that when Marchant departs, his current deputy will step into the hot seat.
SSE shares are expected to yield 6% in 2013, rising to 6.2% in 2014. The recent share price decline in 2013 may be an opportunity to climb aboard.
The article 10 Shares Trading Near 52-Week Lows originally appeared on Fool.com and is written by David O’Hara.
David O’Hara does not own shares in any of the companies mentioned above. The Motley Fool owns shares in Tesco and recommends GlaxoSmithKline.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
