Buying quality stocks that have upwards momentum is a great investment strategy. These three stocks are all nearing 52-week highs and today I'm looking at whether any are worth an investment in my opinion.
Bellway (LSE: BWY) looks to be in a great position to take advantage of the UK's growing housing market. Bellway is relatively undervalued compared to its peers and trades on a price to earnings ratio (P/E) of just 11 and carries a dividend yield of 2.3%. The company released impressive interim results in January with earnings per share up a whopping 43% and a there was a 36% increase on the interim dividend. The Newcastle based company should continue to perform well as the UK housing market is growing and houses are in shortfall. The order book is up 7% and the strategy to spread investment around the UK and not focus on London is paying off as house prices in the city begin to cool.
Rightmove (LSE: RMV) is the UK's leading property portal with the largest audience and the largest inventory of available properties. The company benefits from being of such a large size and it appears that smaller competitors are finding it very hard to take market share of Rightmove and the smaller Zoopla. Last year Righmove posted fantastic growth across the business with earnings per share rising by 21%, this led management to increase the dividend by 23%. Although the yield is a small 0.9% there is scope for considerable increases to the dividend in the next few years as revenues grow. The company is trading on a P/E of over 30 which would indicate an inflated valuation. However, the company is still in growth mode and a P/E of 36 isn't too expensive for a growth stock.
Just like Bellway and Zoopla, National Grid(LSE: NG) has been performing very well recently. Since 2010 the share price has doubled and dividends have been paid to shareholders every year. The recent results were very good with earnings per share growth of 10% and profit before tax growth of 9%. The gas and electricity utility company trades in a P/E of 14 and pays a chunky dividend of 4.3%. I think this stock could be a very nice addition to an income portfolio for any dividend hunters out there. National Grid is also a perfect defensive play ahead of the EU referendum as it also has operations in the USA which provides some natural protection. The company also trades at a discount to its utility peers so there is potential for a decent increase in the share price in the medium term. City analysts don't seem to share this view as many brokers have targets below the current share price.
All of these companies are performing extremely well at the moment and are all near 52 week highs. If these highs are broken then there should be enough momentum to push the shares much higher.
Zoopla is a classic growth stock and could perform very well. These types of stocks offer huge returns but always carry an increased level of risk and must be chosen very carefully.
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Jack Dingwall has no position in any shares mentioned. The Motley Fool UK has recommended Rightmove. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.