As we move into 2015, the global economic recovery is gaining traction and companies with the best growth prospects are attracting the most attention. With this in mind, and if you’re stuck for ideas, here are five companies with some of the best growth prospects for 2015.
Leading provider
The London Stock Exchange (LSE: LSE) is busy building its presence in the global finance industry and is rapidly becoming one of the world’s leading financial services companies. This expansion is driving rapid growth at one of the world’s leading exchange providers.
Current figures suggest that the company will grow earnings by 26% next year, which puts the shares on a PEG ratio of 0.9 at present levels — indicating growth at a reasonable price. The group’s shares currently trade at a forward P/E of 18.1.
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Property boom
Barratt Developments (LSE: BDEV) has staged an impressive recovery over the past five years and the group’s growth is set to continue next year. Thanks to the booming UK property market, City analysts believe that Barratt’s earnings per share will expand 38% during 2015.
As the company is currently trading at a forward P/E of 10.7, earnings growth of 38% puts the stock on a PEG ratio of 0.3. A lowly growth valuation that’s almost too hard to pass up.
International growth
After spending much of the past two years restructuring, City analysts expect Imperial Tobacco’s (LSE: IMT) growth to explode next year. On average, analysts are predicting earnings per share growth of 19% next year, although this forecast could be revised higher, if Imperial’s deal to acquire a number of US cigarette brands goes ahead.
The company currently trades at a forward P/E of 13.5 and projected earnings growth of 19% next year gives a PEG ratio of 0.9, once again indicating growth at a reasonable price. Not only is Imperial cheap compared to its projected growth, the company currently supports a dividend yield of 4.5%.
Merger synergies
The recently merged Dixons Carphone (LSE: DC) is set to grow next year as the synergies gained from the deal between Dixons and Carphone Warehouse start to filter through.
According to current figures, the new, larger company will report earnings per share of 22.02p for 2015, a full 33.2% higher than the figure reported last year for the two separate entities. Dixons Carphone is currently trading at a forward P/E of around 18, which means that the shares trade at a PEG ratio of 0.7. What’s more, City analysts believe that Dixons Carphone’s earnings will expand a further 22% during 2016.
So, if you’re looking for a great growth stock for the next few years, Dixons Carphone could be the way to go.
Rising demand
And lastly, Wolseley (LSE: WOS), which is my final GARP pick for 2015.
Even though Wolseley looks expensive at present levels — the shares are currently trading at a forward P/E of 15.7 — City analysts expect the group’s earnings per share to expand by 23% next year. With earnings growth of 23% expected, the high earnings multiple is justified and a low PEG ratio of 0.8 only confirms the fact that the group is attractively priced at present levels.
