This week I’m focusing on 3 shares which are on my investment watchlist: Legal & General Group Plc (LON:LGEN) (LGEN.L), BP plc (LON:BP) (BP.L) and British American Tobacco plc (LON:BATS) (BATS.L).
In my view, Legal & General could offer relatively high investment returns in the long run. The company seems to have a good strategy and has been able to grow its EPS at an annualised rate in the double figures over the last 5 years. In spite of this, it has a P/E of around 10.5, which to me seems to be relatively low.
Legal & General also has a 6%+ dividend yield. As someone who is becoming more interested in the income potential of my shareholdings, a high yield has appeal for me. Therefore, it’s a stock I’m bullish about for the long run.
British American Tobacco is one of my favourite global consumer stocks. I feel the company has a good mix of defensive character and high growth potential. Although tobacco is becoming less popular due in part to regulations and more health conscious consumers, population growth means the absolute number of smokers in the world may increase in future years.
As well as this potential tailwind, British American Tobacco also has a good position within reduced risk products (RRPs) in my view. I think they could provide additional growth potential for the long term.
The oil price continues to disappoint, and it has held back the share price performance of BP in the last few years. The company is now becoming stronger in my eyes as it moves away from the payments made for the 2010 oil spill. With what I view as a strong asset base, I think the company could post strong growth.
BP remains one of the highest-yielding shares I can find among large-cap peers. Its dividend yield of 6.4% is well over twice the rate of inflation. Although it may not be particularly well covered by profit, I think the potential for a rising oil price could make the stock a relatively appealing income play.