The investment outlooks of BP plc (LON:BP) (BP.L), Saga PLC (LON:SAGA) (SAGA.L), Rolls-Royce Holding PLC (LON:RR) (RR.L) and Banco Santander SA (LON:BNC) (BNC.L) are the focus of this article. Could they deliver rising share prices?
BP’s long-term investment potential appears to be relatively appealing in my view. The FTSE 100 company has been able to increase investment in its asset base, with the acquisition of BHP’s petroleum business offering a potential catalyst.
While the oil price could move lower in the short run, I feel that a 6% dividend yield is relatively attractive. Therefore, BP continues to be a sound recovery stock in my eyes after what has been a volatile number of months.
Saga’s turnaround potential remains encouraging in my view. The company may take a number of years to deliver on its potential, though, since it faces a difficult operating environment where customer acquisition costs are relatively high.
Still, the company appears to be putting in place a sound strategy through which to generate improving financial performance. A P/E ratio of around 8 and a dividend yield of over 8% suggest to me that the Saga share price may offer a margin of safety.
Rolls-Royce is putting in place a sound strategy through which it could generate improving financial performance in my view. It is seeking to cut costs and become more flexible, while also improving its free cash flow.
With spending in the defence industry forecast to rise over the next few years, and the number of commercial aircraft in the skies expected to increase, I’m optimistic about the long-term prospects for the Rolls-Royce share price.
Santander’s outlook may be relatively uncertain at the moment as a result of economic and political risks in key markets. However, the bank appears to have put in place a solid strategy to my mind which could improve its financial prospects.
It is due to report a rise in EPS in the next couple of years, while a single-digit P/E ratio suggests to me that investors may have priced in at least some of the risks facing the business. With Santander having what I view as an efficient business model, I feel it could offer improving share price prospects.