Will Aggreko plc, Vodafone Group plc And Travis Perkins plc Keep Beating The FTSE 100?

Updated
Photo: Maksym Kozlenko. Cropped. Licence: https://creativecommons.org/licenses/by-sa/3.0/
Photo: Maksym Kozlenko. Cropped. Licence: https://creativecommons.org/licenses/by-sa/3.0/

Shares in temporary power solution company Aggreko(LSE: AGK) have risen by 11% today after it released in-line results for the 2015 financial year. This takes its share price rise to 17% over the last week, which is well ahead of the FTSE 100's 2.5% increase during the same time period.

///>

Clearly, Aggreko is facing challenging trading conditions as a result of a low oil price and lower emerging market growth rates. But it continues to make good progress in responding to such conditions, with its pre-tax profit of £252m being in line with expectations and benefitting from changes to the company's operations. These include initiatives to improve account management, the sales process and to make the company more efficient. And with Aggreko being on track to deliver £80m in cost savings by 2017, its profitability could be given a major boost.

With Aggreko trading on a price-to-earnings (P/E) ratio of 13, it appears to offer good value for money. Certainly, it remains a relatively risky play due to the difficult operating conditions it faces, but it has the potential to keep on beating the FTSE 100 in the long run.

Building for growth

Also outperforming the FTSE 100 in the last week has been Travis Perkins(LSE: TPK), with the builders merchant recording a rise in its share price of 4% in the last week. Like Aggreko, it has released full-year results today and they show that Travis Perkins is making good progress despite experiencing difficult trading conditions.

Such conditions caused a fall of 30% in the company's pre-tax profit, with a £141m non-cash impairment charge on Travis Perkins' Plumbing Trade Supplies and F&P Wholesale divisions being recorded due to challenging market conditions. However, the company remains upbeat about its long-term outlook, with its like-for-like (LFL) sales rising by 3.8% and adjusted operating profit up by 8.7%. This confidence has prompted Travis Perkins to raise dividends by 15.8%, although it still yields just 2.4%.

With Travis Perkins trading on a price-to-earnings growth (PEG) ratio of 1.1, it appears to offer significant upside potential. Therefore, while the short term may involve further pain due to a tough operating environment, it has the potential to easily beat the FTSE 100 in the coming years.

Market-beater

Meanwhile, Vodafone(LSE: VOD) also has bright future prospects and its shares have also beaten the wider market in the last week, with them being up by 4.5%. A key reason for their significant potential is an improving Eurozone and this is expected to contribute to a 21% rise in Vodafone's earnings in the 2017 financial year. This puts Vodafone on a PEG ratio of just 1.6, which indicates that its shares could move higher.

Alongside Vodafone's upbeat growth forecasts is a highly appealing yield of 5.4%. With interest rates unlikely to move higher at a rapid rate, Vodafone's shares could remain in vogue in 2016 and beyond as income seekers attempt to bolster their cash flow via blue-chips which offer high yields. As such, Vodafone has growth, income and value appeal, which makes it a relatively enticing purchase right now.

Despite this, there's another stock which could be an even better buy. In fact it's been named as A Top Growth Share From The Motley Fool.

The company in question could make a real impact on your bottom line in 2016 and beyond. And in time, it could help you retire early, pay off your mortgage, or simply enjoy a more abundant lifestyle.

Click here to find out all about it - doing so is completely free and comes without any obligation.

Peter Stephens owns shares of Vodafone. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Advertisement