Fears over declining consumer spending and falling business activity as the UK adjusts to Brexit continues to depress the share price of Royal Mail(LSE: RMG) -- the parcels giant is still dealing at a hefty discount to levels seen on the eve of June's EU referendum.
I believe the market may be missing a trick here, however, and reckon a bubbly second quarter trading statement (due on Thursday 17 November) could provide the fuel for a positive re-rating.
Royal Mail printed resilient results for the quarter ending June, the company traversing significant competition and a low inflationary environment to print a 1% revenues advance. And the parcels play's European GLS division gave cause for optimism, too -- both volumes and revenues here shot 13% higher between April and June.
On top of this, Royal Mail's ultra-low valuations certainly give room for a fresh share price advance, in my opinion.
The elder statesman of Britain's couriers is expected to endure flatlining earnings in the year to March 2017. Still, this reading results in a mega-low P/E multiple of 11.7 times, some way below the FTSE 100 prospective average of 15 times.
And the bottom line is predicted to resume its upward path in the following 12-month period, with a 3% rise currently forecast by City brokers. This projection drives the earnings ratio to a delicious 11.4 times.
Royal Mail isn't too shoddy a selection for dividend seekers, either. With massive restructuring seriously reducing the amount of capital seeping out of the firm, the full-year dividend is expected to keep charging higher, resulting in vast yields of 4.8% for 2017 and 5% for 2018.
At face value, telecoms titan Vodafone(LSE: VOD) may not have the same headroom to generate significant share price gains like Royal Mail.
Indeed, a predicted 32% earnings rise in the year to March 2017 results in a P/E ratio of 31 times. And an anticipated 18% rise in fiscal 2018 produces a multiple of 26.3 times.
However, I believe Vodafone's clear earnings momentum -- a charge supported by massive investment in its voice and data capabilities -- merits this weighty premium. And I would expect a strong update on Tuesday, November 15th to give the mobile operator's share price fresh fuel.
Vodafone announced in July that the sales recovery in Europe continued during April-June, with organic revenues edging 0.3% higher. And growing services demand in Africa, the Middle East and Asia Pacific continued to spark higher, too, up 7.7% from the corresponding 2015 quarter.
Should the company announce further frenzied demand for its services -- the company saw the number of 4G customers on its books double during the first quarter, to 52.5m -- I would expect investors to capitalise on recent share price weakness. Vodafone dipped to its cheapest since February in end-of-week business.
Furthermore, I believe Vodafone's huge 6.1% dividend yield through to the close of next year gives plenty of reason for income chasers to take the plunge. The FTSE 100 average forward yield stands at a far more modest 3.5%.
Fool-proof your portfolio
Times of macroeconomic uncertainty like these mean that picking the 'right' stock can be more difficult than usual.
With this in mind, our crack team of boffins has drawn up a report titled Worst Mistakes Investors Make that outlines the key things you should consider before taking the plunge.
There are a multitude of traps share investors can fall into, from timing their trades incorrectly to listening to the wrong information. And this is where The Motley Fool can help.
Click here to download the report. It's 100% free and can be delivered straight to your inbox.
Royston Wild has no position in any shares mentioned. 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.