The prospects for shares in BP plc (LON:BP) (BP.L), HSBC Holdings plc (LON:HSBA) (HSBA.L), Royal Mail PLC (LON:RMG) (RMG.L) and Standard Life Aberdeen PLC (LON:SLA) (SLA.L) may seem to be relatively uncertain at the moment. But could they still offer long-term growth potential?
While the oil price may have risen in recent trading sessions, I still think that the BP share price has an uncertain future. The price of black gold could move sharply up or down in the near term depending on factors such as the outcome of talks between the US and China.
In the long run, I’m upbeat about the prospects for BP. I believe that the investment it is making in its business, plus a 6% dividend yield, suggest that it may deliver improving total returns.
HSBC’s share price prospects may come under a degree of pressure in the short run in my view, with a slowing Chinese economy having the potential to cause investor sentiment to decline.
The FTSE 100-listed bank, though, appears to offer a margin of safety in my opinion. It has a dividend yield of around 6%, while it could deliver improving EPS growth as demand for banking services across Asia is expected to increase in future years. With an increasing focus on efficiency, I think HSBC could become a stronger business over the medium term.
Royal Mail’s recent profit warning was clearly disappointing. However, the company’s international performance remains impressive in my opinion, and further investment in this area could help it to catalyse the overall performance of the business.
With Royal Mail having a dividend yield of over 5%, I think that the stock could have a margin of safety. Although its UK Letters segment may act as a drag on its performance, I believe that a refreshed strategy which is expected to be announced in the next few months may provide a catalyst to its overall performance in future.
Standard Life Aberdeen’s outlook continues to be uncertain in my view. The company is seeking to make major changes to its structure while the prospects for the world economy, including emerging markets, remain uncertain.
However, with a P/E ratio of around 10 and a dividend yield of over 7%, I believe that the stock could offer good value for money. While investors may remain cautious towards the stock in the near term, I feel that Standard Life Aberdeen could offer recovery potential in the long run as it continues to refine its structure and wider business model.