With stock markets experiencing volatility of late, finding shares with high return potential may seem tough but that’s why I’m looking at the prospects of Unilever plc (LON:ULVR) (ULVR.L), AstraZeneca plc (LON:AZN) (AZN.L), Diageo plc (LON:DGE) (DGE.L) and Persimmon plc (LON:PSN) (PSN.L).
Unilever seems to have a bright future in my view. The company has been able to gradually improve and develop its business model in the last few years so that it is now more efficient.
This could help it to become increasingly competitive in what remains a crowded market. Since Unilever has relatively strong customer loyalty, I feel it could have pricing power alongside sales growth potential for the long run.
Persimmon appears to be in a strong position through which to generate improving financial performance over the medium term. Its £1.3 billion net cash position could help it to deliver further EPS growth, with government policy generally being favourable towards housebuilders.
With a PE ratio of around 11, Persimmon continues to offer good value for money in my view. Its dividend yield of around 7% continues to offer significant income appeal in my eyes.
Diageo’s strategy of becoming more efficient could have a positive impact on its financial performance and share price. The company already has exposure to fast-growing markets through a number of strong brands. This may create a mix of resilience and growth in the long run.
While not a cheap stock, Diageo continues to offer a favourable investment outlook in my eyes. It is one of my top picks in the consumer goods industry.
AstraZeneca looks set to finally turn the corner in the next couple of years when it comes to EPS growth. It has been negative for a number of years as the business has faced a patent cliff.
However, forecasts are for double-digit growth in EPS next year. This puts the stock on a PEG ratio of around 1.4, which suggests that it may be undervalued. With a 4%+ dividend yield and defensive characteristics, I think that AstraZeneca has an upbeat outlook for the long term.