In this article I’m considering whether shares in easyJet plc (LON:EZJ) (EZJ.L), National Grid plc (LON:NG) (NG.L), Persimmon plc (LON:PSN) (PSN.L) and Royal Dutch Shell Plc (LON:RDSB) (RDSB.L) could move significantly higher.
In my view, Persimmon offers good value for money at the moment. Sure, there are risks ahead from Brexit and consumer confidence in the UK economy. But with a strong balance sheet and low interest rates, the company could outperform expectations.
With Persimmon’s land bank providing the company with a firm footing for long-term growth, I think that it could deliver high capital growth in future years.
Shell’s financial performance could improve over the next few years in my view. The company is moving ahead with its plans to divest assets and also reduce leverage.
This could create a stronger business for the long term, while improving free cash flow could create a stronger entity that is better able to cope with volatile oil prices. As a result, I think that Shell’s 5%+ dividend yield appeals at the moment.
easyJet’s success at winning new passengers has been impressive in recent quarters in my view. It has allowed the company to improve its forecasts so that it is expected to post improving EPS over the next couple of years.
With easyJet also having the potential to benefit from the acquisition of Air Berlin, I feel upbeat about the company’s long-term investment potential. Although fuel prices could squeeze margins, the company seems to have a strong position versus peers due to its net cash position.
National Grid may become a more popular share if volatility increases over the medium term. While there is scope for a further increase in share prices over the medium term, I think defensive shares could hold some appeal.
With a 5%+ dividend yield, National Grid appears to offer good value for money in my view. As a result, I believe it could generate impressive total returns.