As we get into March, we've got some potentially tasty full-year results coming up -- with three key ones on 1 March itself.
After Lloyds Banking Group pleased investors with its much-expected dividend, plus an extra unexpected special payment, will Barclays(LSE: BARC) do anything to perk up its shareholders? Barclays shares have actually ticked up a little in the past few days, presumably in anticipation, and in line with improving banking sentiment -- but we're still looking at a 40% fall since the end of July 2015, to today's 171p.
Current expectations suggest a 22% rise in EPS for the year just ended December 2015, with forecast rises of 10-14% penciled in for the next two years. That puts the shares on a P/E of 8.2 for 2015, dropping as low as 6.3 by 2017. And, remarkably for a FTSE 100 bank, Barclays shares are on PEG ratios of between 0.4 and 0.7 -- and values that low are usually seen at smaller-cap high-growth companies.
With dividends set to yield 3.8% and growing, I've considered Barclays as cheap for quite some time, and I'm expecting upbeat results.
Shares in Direct Line Insurance Group(LSE: DLG) have had a better time recently with an 8% gain in 12 months to 388p, but it's been erratic. And though there's a 20% EPS rise predicted, a P/E of close to 13 suggests there's already a fair bit of that built in to the share price.
After the sale of its international division, Direct Line made a special cash payment to shareholders of 27.5p per share, and analysts are guessing at a total of around 41.5p for the whole year, which would yield 10.7%. The problem going forward is that the cost of winter storm damage, estimated at between £110m and £140m, will hit the bottom line, and the mooted 19p (4.9%) dividend for 2016 would only be around 1.5 times covered by forecast earnings -- and that could be stretching it a bit fine.
I think Direct Line is still a solid investment, but I see better insurance bargains out there.
Housebuilding has been a massive post-recession success, with Taylor Wimpey(LSE: TW) one of the bigger winners with a 355% share price rise over the past five years, to 188p. But even after such a climb, expectations for the year just ended put the shares on a relatively modest P/E of 12.5 -- with forecasts dropping it to 11 this year and 10 next. On top of that, forecast dividends stand at 5.2% and they're rising strongly.
Is that optimism well placed? Well, the firm's year-end trading update suggests it is, with chief executive Pete Redfern speaking of "building more homes than at any point in the last six years and delivering a record operating profit margin of over 20%". Completions rose 7% to 13,341 homes, with a 9% average selling price rise to £254,000.
With a record year-end order book up 27% on the previous year, I see plenty still to come from Taylor Wimpey.
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Alan Oscroft owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.