4 shares with high growth potential? Barclays PLC, Aviva plc, Taylor Wimpey plc and Purplebricks Group PLC

Can these shares offer capital growth over the long term? Barclays PLC (LON:BARC) (BARC.L), Aviva plc (LON:AV) (AV.L), Taylor Wimpey plc (LON:TW) (TW.L) and Purplebricks Group PLC (LON:PURP) (PURP.L)

Barclays PLC
Barclays PLC

I’m always searching for stocks with high growth potential, and it’s from this perspective that I’m analysing Barclays PLC (LON:BARC) (BARC.L), Aviva plc (LON:AV) (AV.L), Taylor Wimpey plc (LON:TW) (TW.L) and Purplebricks Group PLC (LON:PURP) (PURP.L).

Barclays is forecast to grow its EPS by 31% and 25% per annum over the next two years. These are relatively high rates of growth and put the stock on a prospective P/E of 8.7 for the 2018 financial year. This suggests to me that the company may be undervalued at the moment, which makes me upbeat about its share price prospects. Barclays may not be popular among investors at the moment, but it could be in the long run in my view.

Aviva’s prospective P/E of 9.2 also appears to be relatively cheap. The company has been able to build a successful business in recent years following the start of a period of major restructuring. Now, it has strong positions within key markets and its outlook appears to be relatively positive. With a dividend yield of 5.2% and dividend cover of 2x, Aviva could offer a mix of capital growth and income potential.

Taylor Wimpey’s near term outlook may be uncertain as house price growth in the UK stalls. However, the company appears to have solid foundations for future growth and this may lead to improved share price performance in my opinion. It has a generous dividend payment plan and with a balance sheet which seems to be relatively strong, I’m optimistic on Taylor Wimpey’s share price outlook for the long term.

Still in the property sector, Purplebricks could also offer growth potential. Although the number of housing transactions in the UK is down, the company is on track to deliver on its full year guidance. Its expansion into the USA and Australia could add an extra catalyst to its future EPS growth rate, while a possible tailwind in the UK from homeowners seeking to cut costs when moving home could help to push the Purplebricks share price higher.

About Robert Stephens 3883 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [email protected] or use one of the other contact methods available on the 'Contact Us' page