As one of the largest life insurers trading in London, you wouldn’t expect Prudential (LSE: PRU) to make it onto the list of the top growth stocks. However, Prudential is one of the fastest growing large caps around.
According to City forecasts, Prudential’s earnings per share are set to expand by 28%, to 101p this year. Based on these figures, the company is trading at a forward P/E of 15.5 and a PEG ratio of 0.6. A PEG ratio lower than one indicates that the shares offer growth at a reasonable price.
Prudential’s shares currently support a dividend yield of 2.7%, and the payout is covered two-and-a-half times by earnings per share.
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Important acquisition
DCC (LSE: DCC) the international fuel sales, marketing, distribution and business support services group, recently completed a game-changing acquisition.
The company purchased a network of unmanned petrol stations across France from Esso, a subsidiary of oil giant ExxonMobil. City analysts believe that this acquisition will boost DCC’s earnings per share by 43% this year — the kind of growth that’s worth paying a premium for.
Based on current figures, DCC is set to report earnings per share of 244p for 2015, which puts the company on a forward P/E of 21.1. Factor in the earnings growth rate of 43%, and you get a PEG ratio of 0.5.
Analysts estimate that DCC’s dividend yield will hit 2% this year.
Rival merger
CRH (LSE: CRH) is set to benefit from the £33bn merger of peers Holcim and Lafarge.
CRH will benefit as it is buying £4.6bn of factories and plants to allay competition fears. These assets include the Tarmac brand owned by Lafarge.
After buying these assets, City analysts estimate that CRH’s earnings per share will surge by 34% this year to €1.10. Translated back into sterling, this earnings growth means that CRH is currently trading at a forward P/E ratio of 19.9 and a PEG ratio of 0.6.
CRH’s dividend yield is set to hit 2.5% next year, and the payout will be covered twice by earnings per share.
Booming demand
Signet Jewelers (LSE: SIG) owns the number one jewellery brands in the UK, US and Canadian markets. As the economic recovery gains traction, demand for luxury jewellery items is surging.
City forecasts estimate that Signet’s earnings per share will jump 24.3% this year, from 346p to 430p, which indicates that the company is trading at a forward P/E of 19.2. Further, these figures dictate that Signet is trading at a PEG ratio of 0.8. The company’s shares currently support a dividend yield of 0.7%.
Explosive growth
Investors have only been able to buy Fevertree Drinks’ (LSE: FEVR) shares for eight months, but over this period the market has quickly realised the company’s potential.
Fevertree’s shares have jumped 70% since November last year, and there could be additional gains to come.
Indeed, City analysts expect the company to report earnings per share of 7.7p this year, up from 2.2p as reported last year when the company was a private business. And with earnings growth of 170% expected, Fevertree currently trades at a PEG ratio of 0.2, making it the cheapest growth share in this article.
