5 Shares Cheryl Cole Might Buy

Published in Investing on 15 November 2012

Where might the gorgeous Geordie invest her money in today's stock market?

National sweetheart Cheryl Cole is triple A-rated. Available. Attractive. A millionaire.

Conventional financial advice is that younger people can afford to put more of their wealth into shares. Using what I know about Mrs Cole, I've scoured the market to find shares that she might like to own.

These five companies might appeal not just to Cheryl but anyone looking for a diverse group of blue chips.

CompanyPrice (p)P/E (forecast)Yield (forecast, %)Market Cap (£m)
BT (LSE: BT.A)2259.14.217,610
Sage (LSE: SGE)30415.33.43,730
Marks & Spencer (LSE: MKS)37811.54.56,160
Diageo (LSE: DGE)181217.72.645,630
Unilever (LSE: ULVR)233618.53.366,310

1) BT 

Not just a pretty face, Cheryl is also a proud Geordie. I figured she might like to put some of her hard-earned cash into BT shares. The telecoms provider is a major employer in Cheryl's hometown and surrounding area with more than 3,800 staff on the payroll.

Shares in BT have had a good year and today trade within a whisker of their 52-week high. However, the next few years will be crucial to the company. BT's super-fast broadband service 'Infinity' is key to its ability to compete with Virgin Media.

With the recent purchase of some Premier League football rights for next season, BT will also be competing head-on with British Sky Broadcasting.

A long-term favourite with income investors, BT has increased its dividend for the last three years. At the interim stage this year, BT increased its payout by 15%.

Market consensus forecasts are for a 9.4p per share dividend for 2012, which puts the shares on an expected yield of 4.2%. The shares today trade at 9.1 times forecast earnings for 2013, falling to 8.9 times the expected 2014 result.

2) Sage 

Financial-software specialist Sage is headquartered in Newcastle-upon-Tyne and is another major employer in Cheryl's native North East. Possibly of more interest to Cheryl is that Sage also provided significant funding for the development of the Sage Centre, the area's leading music venue.

In recent years, Sage has matured from a high-growth/high-PE business into a respectable income/growth share.

Sage's growth has led to a fast-accelerating dividend. From 3.59p per share in 2006, the payout has increased year-on-year and is expected to hit 10.4p per share for 2012, equivalent to an average advance of 22% per annum. The shares currently trade on a forecast yield of 3.4%, rising further to 3.7% for 2013.

Earnings growth at the company is also impressive, with profits increasing throughout the economic downturn. Analysts expect earnings of 19.9p per share for 2012, rising to 22.1p per share for 2013.

3) Marks & Spencer 

The development of new food lines has been an important part of Marks' growth in the last ten years. Indeed, one key culinary development during that time has been the emergence of the ready-meal for one.

As a single lady with a busy job, our Cheryl might be a big consumer of M&S' convenience dinners. So, if she likes the product, why not buy the shares?

Like BT, Marks & Spencer is also trading close to a high for the year. However, less growth is expected from the high-street favourite -- the dividend was held at the interim stage, suggesting that the final payout might also fail to progress. Nonetheless, the shares offer a healthy yield of 4.5%.

At present, the dividend is well-covered by earnings. But earnings did fall 9% during 2011/12 and another 5% decline is forecast for this year. Analysts expect M&S to return to double-digit growth during 2014.

4) Diageo 

I like Cheryl, but sometimes she looks like she could do with feeding up. One of the best ways Cheryl could bring back the curves would be by downing a few pints of Guinness on a regular basis. Preferably in the company of me.

Guinness is just one of a collection of drinks brands owned by titan brewer Diageo. Others include Smirnoff and Bailey's.

Notably, the financial crisis and resulting economic downturn has proved no barrier to Diageo's growth. In the last five years, sales at the company have increased 33%, while in the same time, dividends have improved at an average 6% per annum. Earnings per share have increased, on average, by 14% a year for the last five years, too.

Better still, further growth is forecast. Analysts expect profits and dividends to increase by 10% this year, followed by another similar rise for 2014.

5) Unilever 

Even one of the most beautiful women on television needs her cosmetics. Anglo-Dutch giant Unilever is the company behind many of the UK's leading personal care brands, including Dove, Pond's Cold Cream and Timotei.

Unilever also owns some food brands, such as Pot Noodle. Unfortunately for Geordie lass Cheryl, there doesn't seem to be a pease pudding flavour.

With such strong brands in its portfolio, Unilever is considered one of the blue-est of blue-chip companies. Unilever's share-price growth in the recent months has pushed the shares to a ten-year high. However, only modest dividend and earnings growth is forecast for the next two years.

Cheryl, meet Warren

Finally, companies that own strong brands are a regular choice of super-investor Warren Buffett. The 'Sage of Omaha' has been buying shares in a famous British company recently. Discover which one in our free report "The One UK Share Warren Buffett Loves". You can enjoy the report now -- simply click here and it will be delivered to your inbox immediately.

> David does not own any shares mentioned in this article. The Motley Fool has recommended shares in Unilever.

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Comments

The opinions expressed here are those of the individual writers and are not representative of The Motley Fool. If you spot any comments that are unsuitable hit the flag to alert our moderators.

ProfessorMarcus 15 Nov 2012 , 10:59am

SportsDirect?

Greggs?

ANuvver 15 Nov 2012 , 11:50am

Ho ho.

Warren Buffet? Ee, I diven't think I could invest in little dogs being cruel to rabbits, like...

theRealGrinch 15 Nov 2012 , 2:27pm

ITV plc?
aka Dumb Dumb they are Dumbing it down plc?
aka Dead from the Neck UP TV plc

I jest. Of course she would invest in biotech companies knowing their scientific values

ProfessorMarcus 15 Nov 2012 , 3:50pm

You can't beat a good stereotype hey?

Would the same article have been written if Chezza was from an ethnic minority?

alarmbells 15 Nov 2012 , 6:27pm

ethnic minority?

eh? She's a Geordie.

Surely that qualifies!

ProfessorMarcus 15 Nov 2012 , 9:54pm

I suppose you're correct Alarmbells. There is a unique language and culture!

Please excuse me I need to take the whippet out to dig some coal. ;-)

tg12 16 Nov 2012 , 9:02am

With this article has TMF finally jumped the shark?

ANuvver 16 Nov 2012 , 9:23am

Next week:
Bigg Market movers...

elispace 16 Nov 2012 , 10:42am

Honestly, what has Cheryl Cole got to do with anything that might be of interest to me on this site and how are the shares mentioned anymore than a random selection with no relevance to Cheryl Cole?

What has Warren Buffet got to do with Cheryl Cole? Does he advise her, is she an invester in Berkshire H?

Do you think people who read this site follow celeb mags too? Really?

I've been following this site for a while and it seems to harder to find good articles. . So many of the articles are generic it seems all that changes is the name of the company. Why so many depth-less articles these days.

Less might be more. Something with more substance and effort might be good.

If this is how you try to attract us to the paid aspects of the site, it's not working for me.

As has been mentioned countless times by others, the Buffet/Woodford thing is getting boring too.

Please, I'm starting to feel insulted. More respect for your readers intellect might get you better results.

If I've misunderstood and this article was meant to just be a tongue in cheek, light hearted joke, then, sorry for being so serious, obviously I'm in the wrong place for some serious financial journalism.

tg12 16 Nov 2012 , 11:38am

I agree- the generic "3 shares expected to beat the FTSE" etc are pointless. Any depth/insight appears to have disappeared from most of the articles- in fact I know just skip past nearly all of them and head straight for the boards.

It is a real shame.

andrewboswell 16 Nov 2012 , 12:29pm

Look at the MF advert for a freelance investment writer and you will understand why the quality of articles is what it is and why nearly every article links to the same "special report"!

ANuvver 16 Nov 2012 , 7:55pm

In defence of MF, there's nothing wrong with trying to "fun up" the sort of boring investment strategy that, it seems to me, is at the heart of the MF philosophy.

A lot of the bumf is aimed at new eyes. I accept that this stuff has to be kept current. Regular lags may get tired of hearing how "Neil Woodford eats biscuits too" etc, but there are plenty who are coming to it new.

I've been as critical as many, and I agree that the tone of the articles has been lightened of late, but they still stimulate interesting debate below the line.

Now then (now then) ... sign up to my exclusive report about how to turbocharge your investment returns!

Ee, look at this, pet...

You will receive my fantastic newsletter that will give your wealth a go-go-go charge!

Well hadaway, smack me with a kipper, hinny, and pass the chequebook!

Reinvest your dividends.

Jonesey12 17 Nov 2012 , 12:18pm

elispace

You clicked on an article with Cheryl Cole in the headline and were shocked to find something a bit lightweight!

I thought it was lots of fun.

supasap 18 Nov 2012 , 5:06pm

eeh ya knaa ah'm such a canny lass ah amm, mind ya ah've got bagsa talent ye knaa, not just a pretty face like......oh aye ah'd still be famous even if I was ugly me...... wot me brutha? wor kid...... aye mebbe one day ah should help him oot like.... mmmm mebbe some other day ......... ah need to cosy up to music moguls wi me spare time....... ah fuck'm in fact all geordies can gan shag themsels ah luv other celebrities me

ANuvver 18 Nov 2012 , 11:27pm

No commercialisation without representation...

BIACS 19 Nov 2012 , 10:03pm

Dear god. What next MF - an interview with the contestants of "I'm a Celebrity" asking them what their favourite preference share picks are? An analysis of whether Paris Hilton thinks that Gilts are in a bubble? ("they are, like, so last year - oh wait, sorry "gilts?" I thought you said "belts" - what's this gilts thing? Is that , like, Girls I'd Like To... or something?")

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