FTSE100: Individual Stocks

Below is a table showing the expected annual returns on a long term holding of the following list of FTSE100 stocks. I've ranked them in order of total expected return based on the model I outlined in the entry on stock valuation.

All the data I have used is from digitallook.com. Analysts' forecast is the annualised dividend growth rate over the next 2 years. So if a share currently pays a 10p dividend and the forecast dividend for 2014 is 12.1p then the annualised dividend growth will be 10%pa. I've limited the growth rate to 15%, if a stock has an analyst growth rate higher than this, say 20% I have substituted 15% into the table below for the model. The reason for this is that high growth rates for large cap stocks are unsustainable in the long run.

The 3 year average yield is the total dividend paid over the last 3 years divided by 3 and then divided by the most recent share price.

I've omitted stocks with negative dividend growth forecasts (Eurasian, Kazakhmys, Man Group and Fresnillo), erratic dividends (BP), no dividends (Lloyds, RBS and Int Cons Airlines), or without 3 years track record of making dividend payments (GKN, Anglo American, ITV, Wolseley, Evraz, Carnival, Glencore, and Polymetal). That still leaves 84 stocks in the FTSE100.

As the stocks in the FTSE100 are large cap I have used a factor of 40% on the analyst growth rates for the model (for FTSE250 stocks I would use 33%).

I have used the adjustment factor which I outlined in a previous post, but have been conservative and not used any positive adjustment factors.

	Share		Price	Analysts' forecast*	3yr average yield	Growth	Adjustment		Total
1	Aviva	269		3.6%	9.4%	1.4%	0.0%	10.8%
2	Vodafone	174		15.0%	5.1%	6.0%	-0.4%	10.8%
3	RSA	101		3.1%	8.7%	1.2%	0.0%	9.9%
4	Standard Life	206		5.2%	6.3%	2.1%	0.0%	8.4%
5	L&G	111		11.7%	4.5%	4.7%	-1.0%	8.2%
6	Resolution	203		3.6%	6.7%	1.4%	0.0%	8.1%
7	BAE	272		3.3%	6.4%	1.3%	0.0%	7.7%
8	BT	207		14.6%	3.6%	5.8%	-2.0%	7.4%
9	SSE	1359		4.5%	5.5%	1.8%	0.0%	7.3%
10	ICAP	341		3.5%	5.8%	1.4%	0.0%	7.2%
11	Admiral	1116		15.0%	3.4%	6.0%	-2.4%	7.0%
12	AstraZenica	2632		2.0%	6.2%	0.8%	0.0%	7.0%
13	HSBC	514		7.7%	4.6%	3.1%	-0.9%	6.8%
14	National Grid	685		2.3%	5.6%	0.9%	0.0%	6.5%
15	Centrica	313		6.9%	4.5%	2.8%	-1.0%	6.3%
16	GlaxoSmithKline	1417		6.2%	4.6%	2.5%	-0.9%	6.2%
17	Aberdeen AM	240		15.0%	3.1%	6.0%	-2.9%	6.2%
18	M and S	348		5.6%	4.7%	2.2%	-0.8%	6.1%
19	British Land	495		2.7%	5.3%	1.1%	-0.2%	6.1%
20	RDShell 'B'	2081		2.7%	5.2%	1.1%	-0.3%	5.9%
21	Morrisons	273		11.7%	3.5%	4.7%	-2.3%	5.9%
22	Tesco	310		5.3%	4.5%	2.1%	-0.9%	5.7%
23	BATS	3050		9.7%	3.7%	3.9%	-1.9%	5.6%
24	Imperial Tobacco	2400		10.7%	3.5%	4.3%	-2.2%	5.5%
25	Sainsbury's	296		1.4%	5.1%	0.6%	-0.4%	5.3%
26	Reed Elsevier	488		5.6%	4.3%	2.3%	-1.3%	5.2%
27	Ashmore	326		6.0%	4.0%	2.4%	-1.5%	4.9%
28	United Utilities	649		1.0%	4.9%	0.4%	-0.5%	4.8%
29	BHP Billiton	1704		8.4%	3.4%	3.4%	-2.4%	4.3%
30	CRH	1129		2.4%	4.4%	0.9%	-1.1%	4.3%
31	Old Mutual	143		12.1%	2.8%	4.8%	-3.3%	4.3%
32	Vedanta	967		8.3%	3.4%	3.3%	-2.4%	4.2%
33	Rexam	393		10.8%	2.9%	4.3%	-3.1%	4.1%
34	Standard Chartered	1327		7.7%	3.4%	3.1%	-2.4%	4.1%
35	Capita	611		8.8%	3.2%	3.5%	-2.7%	4.0%
36	Barclays	182		12.8%	2.6%	5.1%	-3.7%	3.9%
37	Land Sec	711		3.7%	4.0%	1.5%	-1.6%	3.9%
38	Prudential	684		7.4%	3.4%	3.0%	-2.4%	3.9%
39	Unilever	2029		15.0%	2.2%	6.0%	-4.4%	3.8%
40	WPP	782		12.7%	2.5%	5.1%	-3.9%	3.6%
41	Sage	254		7.0%	3.3%	2.8%	-2.6%	3.5%
42	Amec	992		12.1%	2.5%	4.8%	-3.8%	3.5%
43	Pearson	1142		6.2%	3.4%	2.5%	-2.4%	3.5%
44	Hammerson	422		3.8%	3.8%	1.5%	-1.8%	3.5%
45	IMI	880		9.0%	2.9%	3.6%	-3.1%	3.4%
46	Schroders NV	995		4.9%	3.6%	1.9%	-2.1%	3.4%
47	G4S	276		9.3%	2.9%	3.7%	-3.2%	3.3%
48	Kingfisher	280		11.3%	2.5%	4.5%	-3.8%	3.3%
49	Smiths	1015		5.4%	3.4%	2.1%	-2.3%	3.2%
50	Next	2996		9.7%	2.7%	3.9%	-3.4%	3.2%
51	BSkyB	700		8.8%	2.9%	3.5%	-3.2%	3.2%
52	Tate & Lyle	670		5.0%	3.5%	2.0%	-2.3%	3.2%
53	Hargreaves Lansd	474		15.0%	2.0%	6.0%	-4.9%	3.1%
54	Severn Trent	1701		1.5%	4.0%	0.6%	-1.6%	3.1%
55	Compass	634		9.8%	2.6%	3.9%	-3.6%	2.9%
56	Diageo	1514		8.9%	2.5%	3.6%	-3.8%	2.3%
57	Rolls Royce	808		12.9%	2.0%	5.2%	-4.9%	2.2%
58	SABMiller	2394		11.8%	2.1%	4.7%	-4.6%	2.2%
59	Schroders	1194		4.9%	3.0%	1.9%	-3.0%	1.9%
60	Meggitt	378		8.1%	2.5%	3.3%	-3.9%	1.8%
61	Reckitt Benckiser	3433		2.4%	3.3%	1.0%	-2.5%	1.8%
62	Whitbread	1821		8.1%	2.4%	3.2%	-4.0%	1.7%
63	Johnson Matthey	2141		12.3%	1.9%	4.9%	-5.2%	1.7%
64	Petrofac	1577		12.0%	1.9%	4.8%	-5.3%	1.3%
65	ABF	1180		10.2%	2.0%	4.1%	-5.0%	1.0%
66	Burberry	1372		15.0%	1.4%	6.0%	-6.5%	0.9%
67	Bunzl	1006		6.5%	2.4%	2.6%	-4.1%	0.8%
68	Intercont Hotels	1412		7.3%	2.2%	2.9%	-4.5%	0.6%
69	Rio Tinto	2795		6.6%	2.3%	2.6%	-4.3%	0.6%
70	Wier Group	1552		11.0%	1.7%	4.4%	-5.6%	0.5%
71	Experian	903		9.0%	2.0%	3.6%	-5.0%	0.5%
72	Croda	2180		9.9%	1.7%	4.0%	-5.7%	0.0%
73	Intertek Group	2564		15.0%	1.1%	6.0%	-7.6%	-0.5%
74	Xstrata	913		8.1%	1.7%	3.2%	-5.7%	-0.8%
75	International Power	414		1.3%	2.4%	0.5%	-4.0%	-1.0%
76	Antofagasta	1017		15.0%	1.0%	6.0%	-8.4%	-1.5%
77	Serco	524		9.1%	1.4%	3.6%	-6.6%	-1.6%
78	Smith & Nephew	606		3.7%	1.7%	1.5%	-5.8%	-2.7%
79	Aggreko	2157		13.9%	0.8%	5.6%	-9.1%	-2.8%
80	BG Group	1266		7.5%	1.1%	3.0%	-7.8%	-3.7%
81	ARM	492		15.0%	0.6%	6.0%	-10.5%	-3.9%
82	Tullow	1395		15.0%	0.4%	6.0%	-12.7%	-6.3%
83	Randgold	5130		15.0%	0.3%	6.0%	-13.3%	-6.9%
84	Shire	1897		10.7%	0.4%	4.3%	-11.8%	-7.1%

There's the data. No real surprises. A lot of insurance companies at the top of the list with their high yields and growth forecasts. I'm a bit wary of them though. The adjustment factor is very harsh on stocks what have low dividend yields. As my preference is for investing in high dividend stocks I don't have a problem with it but the model clearly favours dividend stocks opposed to growth 

See also: FTSE100: Individual stocks (Updated)