I’m considering the FTSE 100 (INDEXFTSE:UKX) beating potential of GlaxoSmithKline plc (LON:GSK) (GSK.L), Unilever plc (LON:ULVR) (ULVR.L), J Sainsbury plc (LON:SBRY) (SBRY.L) and British American Tobacco plc (LON:BATS) (BATS.L).
The investment potential of GlaxoSmithKline seems high to me. The company is now focusing on a smaller number of higher quality options when it comes to investing in its pipeline. This could mean higher rewards in future, which may translate into higher EPS growth. As well as this, the company has a dividend yield of 6.2% at the moment, which is more than twice the rate of inflation. With GlaxoSmithKline having what seems to be a solid balance sheet, its risk to reward ratio looks appealing.
Unilever is another global stock which could enjoy share price growth. The company seems to have found a solid strategy, since its EPS is forecast to rise at an average rate of 15% per annum over the next two years. The company also has dividend investment potential, with it yielding 3% and being expected to grow dividends by around 10% next year. With Unilever having a diverse business model which has an excellent track record, I feel it could beat the FTSE 100.
Sainsbury’s seems to have put in place a sound strategy. The company’s purchase of Argos could provide it with major synergies, as well as cross-selling opportunities. Sure, the UK’s economic outlook may be challenging at the moment, but the company’s long term future appears to be bright. With Sainsbury’s having a dividend yield in excess of 4%, I feel it has investment potential for the long run – particularly with inflation having the potential to move higher.
British American Tobacco is a company that may be misunderstood by some investors. Sure, tobacco products are set to be regulated to a greater extent in future. This could hurt their performance to some degree. However, with there being a significant growth opportunity on offer through e-cigarettes and other next generation products, I believe the future for tobacco companies such as British American Tobacco may be positive. Therefore, it’s a stock I feel bullish about.