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Are These FTSE 100 Shares a Buy?

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Burberry Group plcLONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies. Although Britain’s foremost share index has risen 4.3% so far in 2013, I believe many London-listed stocks still have much further to run, while others seem overdue for a correction. So how do the following five stocks weigh up?

Burberry
I believe Burberry Group plc (LON:BRBY) is primed to advance strongly as retail store space increases and activity in emerging markets continues to take off.

The fashion icon announced in last week’s trading update that underlying revenue rose 9% in the six months to March 2013 to 1.1 billion pounds, with retail and wholesale turnover from the Asia-Pacific region advancing 15.5% to 447 million pounds. The company said it plans to concentrate new store openings within the growth hotspots of China and Brazil.

City analysts expect earnings per share to have advanced 8% in the year ending March 2013 to 68 pence before accelerating 15% in the current year to 78 pence. A 13% rise has been penciled in for 2015 to 89 pence per share.

Burberry Group plc (LON:BRBY) also provides exciting dividend prospects for investors, having raised its final dividend by 25% in 2012 to 25 pence. Brokers expect the payout to increase to 32 pence and 37 pence per share, respectively, in 2014 and 2015.

The luxury goods manufacturer was recently changing hands on a P/E rating of 16.6 for 2014, above the forward earnings multiple of 15.6 for the entire personal-goods sector. However, Burberry Group plc (LON:BRBY)’s rating is anticipated to fall to 14.6 in 2015. A P/E-to-growth readout of 1.1 for this year and next outlines the firm’s reasonable price — a figure around one represents exceptional value for money.

British Sky Broadcasting
I view recent weakness in British Sky Broadcasting Group plc (LON:BSY)‘s stock price as a fresh buying opportunity. The company is ratcheting up activity in the face of mounting competition from the likes of BT Group plc (LON:BT.A) in order to maintain earnings growth. Sky has recently rolled out initiatives such as its Now TV pay-as-you-go sports service to boost its television business, and in March it bought Telefonica‘s U.K. consumer broadband and fixed-line telephony arms to boost its operations.

EPS is primed to rise 12% to 57 pence in 2013, according to broker estimates, before rising a further 5% the following year to 60 pence. British Sky Broadcasting Group plc (LON:BSY) currently trades on respective P/E ratings of 14.7 and 14 for this year and next, carrying a premium to the entire media sector’s forward earnings multiple of 12.1, but I believe the company’s track record of consistent growth justifies the higher rating.

As well, British Sky Broadcasting Group plc (LON:BSY) is strongly committed to boosting dividends, having hiked last year’s total payout 9% to 25.4 pence per share. Brokers expect the payment to increase to 28.6 pence in 2013 and 30.8 pence per share in 2014.

The broadcaster is also pursuing an extensive share-buyback program, and last year it received approval to purchase up to 500 million pounds in additional shares. The firm repurchased 414 million pounds’ worth of shares in the second half of 2012.

British Land
I am backing shares in real-estate investment trust The British Land Company plc (LON:BLND) to gain traction as its stellar asset-management and exciting acquisition plans ignite earnings. The company sold its Ropemaker Place development in the City of London for 472 million pounds in March and raised 500 million pounds via an equity placing to latch onto a flurry of exciting opportunities entering the market.

City analysts expect EPS to have edged 2% higher in the year ending March 2013 to 30.2 pence before increasing another 2% in 2014 to 30.1 pence. A 7% rise is forecast for the following year to 33 pence per share.

The British Land Company plc (LON:BLND) is a favored pick among income investors thanks to its lucrative dividend policy. The firm’s 26.1 pence payout in 2012 is anticipated to rise to 26.5 pence for 2013 before marching on to 27 pence in 2014 and 28 pence in 2015. British Land’s dividend yield is well ahead of the current forward FTSE 100 average yield of 3.3%, with readings of 4.5%, 4.6% and 4.8% penciled in for 2013, 2014, and 2015, respectively.

The British Land Company plc (LON:BLND) currently trades on respective P/E ratings of 18.5 and 17.3 for 2014 and 2015 — and at a meaty discount to a forward earnings multiple of 24.7 for the wider REITs sector. This discount makes the firm a snip in my opinion, given improving earnings growth projections and a delightful dividend policy.

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