Are These FTSE 100 Stalwarts Good Value?

Published in Investing on 21 August 2012

Kevin Godbold assesses these blue chips for their growth potential.

Capital appreciation is surely the goal of many investors. One method of achieving that is to buy companies with steady earnings growth. If bought when the shares are cheap, two drivers could move the share price up:

  • growth in earnings, and
  • an upwards P/E re-rating.

Highly successful fund manager Peter Lynch classified steady growers as Stalwarts, which he typically traded for 20% to 50% share-price gains. But whether buying for gains like that or holding for the longer term, we need to know if reliable earnings growth can continue, and whether the shares are cheap.

Seeking durable growth

Not all companies achieve stable growth as you can see by the aggregate performance of those in London's premier FTSE 100 index (UKX), where the compound annual earnings-growth rate has been just 0.7% over the last five years:

Year to June200720082009201020112012
FTSE 100 index660856264249491759465571
Aggregate earnings per share537503427397527557

Consistent, cash flow-backed growth in profits is a promising characteristic in today's markets so, for this series, I'm examining firms with annual earnings growth between 4% and 20%.

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You can read my company assessments to date by clicking the links below. I hope my research assists your investment decisions:

Is FTSE 100 Stalwart Aberdeen Asset Management Good Value?

Is FTSE 100 Stalwart Admiral Good Value?

Is FTSE 100 Stalwart Amec Good Value?

Is FTSE 100 Stalwart AstraZeneca Good Value?

Is FTSE 100 Stalwart Babcock Good Value? 

Is FTSE 100 Stalwart BAE Systems Good Value?

Is FTSE 100 Stalwart British American Tobacco Good Value? 

Is FTSE 100 Stalwart Burberry Good Value?

Is FTSE 100 Stalwart Bunzl Good Value?

Is FTSE 100 Stalwart Capita Good Value?

Is FTSE 100 Stalwart Diageo Good Value?

Is FTSE 100 Stalwart G4S Good Value?

Is FTSE 100 Stalwart Imperial Tobacco Group Good Value?

Is FTSE 100 Stalwart Intertek Good Value?

Is FTSE 100 Stalwart Meggitt Good Value?

Is FTSE 100 Stalwart Morrison Good Value?

Is FTSE 100 Stalwart Pearson Good Value?

Is FTSE 100 Stalwart Reckitt Benckiser Good Value? 

Is FTSE 100 Stalwart SABMiller Good Value?

Is FTSE 100 Stalwart Sage Good Value?

Is FTSE 100 Stalwart Serco Good Value?

Is FTSE 100 Stalwart Smith & Nephew Good Value?

Is FTSE 100 Stalwart Smiths Good Value? 

Is FTSE 100 Stalwart Tate & Lyle Good Value?

Is FTSE 100 Stalwart Tesco Good Value? 

Is FTSE 100 Stalwart Whitbread Good Value?

If you are an ambitious investor hoping to profit from this uncertain economy, as I am, I urge you to read "10 Steps To Making A Million In The Market" today -- it could transform your wealth. Click here now to request your free, no-obligation copy. The Motley Fool is helping Britain invest. Better.

Further Motley Fool investment opportunities:

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