5 FTSE 100 Shares You Should Have Bought In February
Mar 1st 2013 12:04PM
Updated Mar 1st 2013 1:15PM
LONDON -- After January's dramatic rise, the FTSE 100 settled into a steadier month in February, gaining 105 points to reach 6,381. The index of the U.K.'s biggest companies did pop its head over the 6,400 parapet on Feb. 20, but it has yet to close above that level.
A number of the FTSE 100's constituents have soundly beaten the average during February, and some of them will surely go on to even better things. Here are five that have risen and might still be good values.
Legal & General
The insurance sector has been making a bit of a comeback, and Legal & General Group has done well along with the rest of it. The shares gained a relatively modest 5.3% during February to reach 160 pence, but that adds up to a rise of more than 30% over the past 12 months.
Full-year results are due next week, and they look like they should be good. The City is forecasting a 13% rise in earnings per share, and that puts the shares on a relatively modest price-to-earnings ratio of 11. There's also a dividend yield of 4.7% expected, topping two previous years of dividend rises, and it's likely to be about twice covered. There could still be more to come from the shares.
Shares in Rolls-Royce Holdings climbed 8.7% to 1,028 pence, taking them up more than 25% over the past 12 months. Full-year results released on Feb. 14 showed revenue up 8% to 12.2 billion pounds, pre-tax profit up 24% to 1.4 billion pounds, and earnings per share up 22% to 59.3 pence. That resulted in an 11% dividend lift to 19.5 pence per share.
Since then, Rolls-Royce has announced a new $40 million contract to provide "equipment and related services to power the flow of natural gas through the Uzbekistan section of the Turkmenistan-China natural gas pipeline."
Forecasts for 2013 put the shares on a P/E of 15.5, which is not high for a quality company, and there's a further dividend hike expected to yield 2.1%.
ISAs, SIPPs, stockbroking -- it has all added up to a great month for Hargreaves Lansdown, whose share price powered up a whopping 25% to 867 pence in February -- and that's on top of a strong year that has seen the price nearly double.
On Feb. 6, first-half results showed record revenue of 140 million pounds, up 24%, with pre-tax profit up 30% to a record 93.7 million pounds. The firm now has 30.4 billion pounds in assets under administration -- and yes, that's also a new record. Forecasts for the full year suggest a 25% rise in earnings per share, but that does put the shares on a prospective P/E of 28, which is about twice the long-term FTSE average. Many will see that as a bit pricey.
ITV shares had a good February, rising 8.2% to 124 pence. In addition, you would have had become eligible for a final dividend of 1.8 pence per share (for a full-year total of 2.6 pence, and a yield of 2%), plus a special dividend of 4 pence per share, after the broadcaster revealed 2012 results on Wednesday.
While some companies dependent on traditional advertising revenues have struggled, ITV's mix of TV with digital, online and interactive media is reaping rewards. Even with the shares having gained 45% over the past 12 months, 2012 earnings per share put them on a P/E of 13, and forecasts for 2013 and 2014 drop that ratio to 12 and 11 respectively.
Shares in aerospace and defense engineer BAE Systems gained a modest 4.4% to 355 pence during February, so why am I including the company here? Well, in addition to BAE being a constituent of the Fool's Beginners' Portfolio, that rise is still a decent one-month performance. And there is also a final dividend of 11.7 pence per share to be added, announced with full-year results on Feb. 21, making for a full-year payout of 19.5 pence per share for a 5.7% yield.
Although 2012 operating profit fell 6% to 1.9 billion pounds, underlying earnings per share of 38.9 pence puts the shares on a P/E of only 9.1, and that falls to 8.3 based on forecasts for 2013 -- the company told us it anticipates modest growth this year.
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The article 5 FTSE 100 Shares You Should Have Bought In February originally appeared on Fool.com.Alan Oscroft has no position in any stocks mentioned. The Motley Fool owns shares of Hargreaves Lansdown. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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