Today I am discussing the growth outlook of three FTSE 100 (INDEXFTSE: UKX) giants.

Brand behemoth

In times of macroeconomic uncertainty such as these, I reckon Unilever (LSE: ULVR) is one of the best stocks out there for those seeking reliable earnings expansion.

The household goods giant’s wide portfolio of products — from Dove soap and Lynx deodorant to Lipton tea — commands unrivalled loyalty from customers, allowing it to steadily raise prices, almost regardless of the broader economic landscape. And Unilever is throwing vast sums at these labels to keep their appeal simmering.

City analysts expect earnings at Unilever to drive 10% higher in 2015, and a further 8% rise is chalked in for 2016. These forecasts leave the business dealing on P/E ratios of 21.4 times and 20 times for this year and next, sailing above the benchmark of 15 times that indicates attractive ‘paper’ value.

However, I reckon Unilever’s terrific defensive qualities, not to mention the splendid long-term prospects generated by its pan-global presence, fully merits such a premium.

Diversified dynamo

While Bunzl’s (LSE: BNZL) products may not carry the unbelievable brand appeal of Unilever’s, I reckon the company is also a terrific stock selection for defensively-minded investors.

Bunzl supplies a wide array of essential goods and services, such as hygiene sprays, safety signage and food packaging, to a multitude of different industries. Such diversification provides the firm with terrific security as it removes Bunzl’s reliance on one or two key sectors.

And Bunzl remains busy on the acquisition front to bolster its long-term growth outlook, having snapped up two German businesses in the ‘healthcare related consumables’ market just this month.

The number crunchers expect Bunzl’s growth story to keep rolling with advances of 6% and 3% in 2015 and 2016 correspondingly. And I reckon subsequent P/E ratings of 21.3 times and 20.8 times reflect fair value given the company’s excellent record of earnings growth.

Dial in

Concerns over future smartphone and PC demand continues dent investor sentiment towards ARM Holdings (LSE: ARM). Indeed, the chipbuilder has seen its share value plummet 10% during the past six weeks, as fresh sales data has indicated a further cooling in mobile device demand.

But I believe stock pickers may be missing a trick here. Indeed, ARM has seen its earnings gallop higher year after year, thanks to its terrific record of innovation.

So while overall sales volumes in critical markets may be cooling, I expect the bottom line at ARM to keep growing as the firm grabs share from its rivals. On top of this, the Cambridge firm’s forays into new markets such as networks, servers and the ‘Internet Of Things’ promises to deliver rich rewards, too.

The City certainly expects earnings at the tech play to keep rocketing, and have pencilled in rises of 43% and 15% for 2016 and 2017 correspondingly.

While these result in elevated P/E ratings of 26.4 times for this year and 23.2 times for 2017, I expect such numbers to keep on tumbling as demand for ARM’s tech continues to fizz.

The post Are ARM Holdings plc, Unilever plc and Bunzl plc the FTSE 100’s best growth bets? appeared first on The Twelfth Magpie.

More reading

• Up 27.1% in 6 months: a FTSE 100 share paying out 2.8% a year!
• 3,566 shares in this FTSE 100 stalwart earns a £1,443 second income
• How do the government’s latest changes affect your Stocks and Shares ISA?
• Why boring is often best when it comes to buying stocks
• This beaten-down UK growth share is also a dividend investor’s dream

Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended ARM Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

A tad heady?

At face value drinks leviathan Diageo (LSE: DGE) can hardly be considered attractive value for money. Thanks to a predicted 1% earnings decline in the year to June, the business currently changes hands on a P/E rating of 21.9 times.

This clearly sails some way above the benchmark of 15 times that indicates ‘conventionally’ reasonable value for money. And Diageo’s earnings multiple remains elevated at 20.2 times for fiscal 2017 despite expectations of a 9% bottom-line uptick.

Investors can’t rely on chunky dividend flows through this period to compensate for Diageo’s inadequate P/E ratios either. Sure, it’s expected to keep dividends rolling higher, medium term, but yields of 3% and 3.2% for this year and next still lag the FTSE 100 average of around 3.5%.

Brand beauty

But Diageo has long trailed most of its blue-chip peers value-wise, and with good reason. Not all stocks are equal regardless of paper projections and investors are willing to pay a bit extra for quality stocks like Diageo.

The market places large importance on Diageo’s portfolio of industry-leading labels like Guinness, Smirnoff and Captain Morgan. These command terrific consumer loyalty like few others, providing investors with confidence that Diageo can keep lifting prices regardless of wider economic pressures. In the current climate, stocks that can boast such brand power can’t be underestimated.

That’s not to say Diageo is without its share of problems as the company battles currency movements and the prospect of fresh sales weakness in emerging markets.

But the firm’s share price still galloped higher in recent months. The market believes Diageo’s expansion into the ‘premium’ segment provides terrific sales opportunities. Furthermore, its expansion across Latin America and Asia is predicted to underpin robust revenues growth as disposable incomes in these geographies march higher.

Share price star

Chipbuilder ARM Holdings (LSE: ARM) has also been unpopular with bargain hunters fixated on near-term valuations. However, those simply snapping up stocks with attractive paper valuations would have missed out big time by overlooking the company.

Someone who had bought it a decade ago would now be celebrating the 600%-plus share price ascent chalked-up to date.

Back to the future

Of course investors today will give scant regard to the company’s previous performance, particularly as its explosive growth story was underpinned by rapid growth in smartphone and tablet PC demand, a phenomenon now receding.

But that’s not to say ARM’s hot growth is drawing to a close. Far from it. The Square Mile expects earnings expansion of 44% and 13% in 2016 and 2017, respectively.

Subsequent P/E ratings of 28.7 times and 25.4 times may — like those at Diageo — appear heady. And dividend yields of 1% for 2016 and 1.2% for next year are hardly exciting either.

But I believe ARM Holdings’ key qualities fully merit such a premium. The company enjoys top-tier supplier status with mobile giants like Apple and Samsung, while its cutting-edge technologies continue to grab market share from competitors. And ARM Holdings is also enjoying accelerating success in new markets like networks, servers and the Internet of Things.

The tech play saw pre-tax profits surge 14% to £137.5m during January-March, it said Wednesday, as the number of chips shipped rocketed 10% to over 4.1m units.

I believe ARM Holdings has what it takes to keep earnings galloping higher and its share price rocketing, putting paid to its reputation as an ‘expensive’ stock selection.

The post Are ARM Holdings plc And Diageo plc Really Worth The Premium? appeared first on The Twelfth Magpie.

More reading

• Newsflash: the Diageo share price just climbed!
• Which British dividend shares could supercharge a passive income portfolio in 2026?
• Has the turnaround finally started for Diageo shares?
• How much longer can the Diageo share price stay this low?
• Is it finally game on for the Diageo share price?

Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has recommended ARM Holdings and Diageo. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

A financial star

With its insurance products flying off the shelves across the globe, and its extensive restructuring drive still delivering handsome returns, I believe Aviva (LSE: AV) is a terrific selection for those seeking long-term earnings expansion.

Indeed, Aviva saw new business volumes in its core UK and Ireland division leap an impressive 39% — to £415m — between October and December, while a 24% surge across its Asian units — to £115m — underlines the long-term potential of these growth markets.

The number crunchers expect Aviva to bounce from an anticipated 18% earnings decline in 2015 with a 17% advance in the current year, and further gains are predicted thereafter. As a consequence the insurer deals on an prospective P/E rating of 8.9 times, while a sub-1 PEG number of 0.5 times further highlights Aviva’s exceptional value.

A housing hero

Due to the worsening supply/demand imbalance washing across Britain’s housing sector, I believe homebuilder Taylor Wimpey (LSE: TW) is also a terrific selection for those seeking stellar earnings growth.

Data from the Land Registry released today showed that the average house price rose 2.5% in January, to £191,812, the largest month-on-month gain since 2002. And the shortage of available homes versus prospective buyers was underlined by news that house sales averaged 78,652 between August and November 2015, down from 81,656 in the corresponding 2014 period.

Against this backcloth the City expects Taylor Wimpey to enjoy a 16% earnings rise in 2016 alone, leaving the business dealing on a P/E rating of 10.8 times. And a PEG readout of 0.7 underlines the builder’s spectacular value relative to its growth outlook.

Tech titan to rise again

Investor appetite for tech giant Apple (LSE: AAPL) has nosedived more recently amid signs of slumping global demand for its products.

Apple saw sales of its critical iPhone rise just 0.4% during October-December to 75.8m units. And demand for its iPad tablet fell off a cliff in the period — quarterly sales of 16.1 million devices represented an eye-watering 25% decline from the prior year.

Still, I believe the company’s brilliant record of innovation should continue to deliver stunning long-term profits growth. Sure, global smartphone sales may be slowing from previous years. But I believe Apple’s ‘rockstar’ reputation should allow it to traverse the worst of the current cooldown, while its diversification into rapidly-rising sectors like smartwatches also provides plenty of opportunity.

The City expects Apple to endure a 1% earnings slip in the period to September 2016 thanks to current sales bumpiness. However, this number still produces a terrific P/E rating of 10.6 times — a reading around or below 10 times is widely considered bargain-basement territory.

And the number crunchers expect the Cupertino colossus to get a handle on its current travails and punch a 10% earnings rebound in fiscal 2017, driving the earnings multiple to an even-better 9.7 times. I believe this represents unmissable value for such a high-quality stock.

The post Great Growth At Pukka Prices! Apple Inc., Aviva plc & Taylor Wimpey plc appeared first on The Twelfth Magpie.

More reading

• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?
• A £10,000 ISA buys 1,931 shares in these 6.5%+ yielding dividend stocks!
• 3 top passive income shares to consider with dividend yields above 5%
• How much do you need in a SIPP to target a stunning £750.75 weekly passive income?

Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.