Is Now The Time To Buy G4S Plc?

I'm always searching for shares that can help ordinary investors like you make money from the stock market.

So right now I am trawling through the FTSE 100 and giving my verdict on every member of the blue-chip index. Simply put, I'm hoping to pinpoint the very best buying opportunities in today's uncertain market.

Today I am looking at G4S (LSE: GFS) (NASDAQOTH: GFSZY.US) to determine whether you should consider buying the shares at 296p.

I am assessing each company on several ratios:

Price-to-earnings (P/E): Does the share look good value when compared against its competitors?

Price-to-earnings growth (PEG): Does the share look good value factoring in predicted growth?

Yield: Does the share provide a solid income for investors?

Dividend cover: Is the dividend sustainable?

So let's look at the numbers:

The consensus analyst estimate for this year's earnings per share is 24.3p (15% growth) and dividend per share is 9.8p (9% growth).

Trading on a projected P/E of 12.2, G4S appears cheaper than its peers in the support services sector, which are currently trading on an average P/E of around 20.

G4S's P/E and double-digit growth rate give a PEG ratio of around 0.8, which implies the share price is cheap for the near-term earnings growth the firm is expected to produce.

Offering a 3% yield, G4S's dividend yield is greater than the sector average of 2.2%. Additionally, G4S has a three-year compounded dividend growth rate of 14%, implying the yield will continue to stay above that of its peers.

Indeed, the dividend is nearly two-and-a-half times covered by earnings, giving G4S plenty room for further payout growth.

So, is now the time to buy G4S?

Global security company G4S hit the headlines for all the wrong reasons last summer when it fail to deliver its contracted security presence for the London Olympics. The company's well-publicised failure and the subsequent fines have so far cost G4S £88m, and investors are still waiting to see if the company's reputation has been damaged.

Having said that, I believe that G4S could be in the process of making a comeback, as within its most recent annual report the company revealed that its profit for the year, excluding losses related to the Olympics, actually expanded by 3.5% to £266m.

Additionally, it would appear that G4S has regained some trust from the government here in the UK, as during the last year - despite the Olympic fiasco- the company was awarded several new government contracts, worth around £200m a year.

Furthermore, G4S' management remains proactive and is actively seeking to streamline the company, selling off underperforming divisions and acquiring additional business to boost organic growth. Indeed, during 2012, the company spent around £90m on acquisitions, the largest of which was Vanguarda, a leading Brazilian security company.

So, after taking all of that in to account, and factoring in G4S's current discount to sector peers, I feel that now looks to be a good time to buy G4S at 296p.

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In the meantime, please stay tuned for my next verdict on a FTSE 100 share.