Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    StockNews24StockNews24
    Subscribe
    • Shares
    • News
      • Featured Company
      • News Overview
        • Company news
        • Expert Columns
        • Germany
        • USA
        • Price movements
        • Default values
        • Small caps
        • Business
      • News Search
        • Stock News
        • CFD News
        • Foreign exchange news
        • ETF News
        • Money, Career & Lifestyle News
      • Index News
        • DAX News
        • MDAX News
        • TecDAX News
        • Dow Jones News
        • Eurostoxx News
        • NASDAQ News
        • ATX News
        • S&P 500 News
      • Other Topics
        • Private Finance News
        • Commodity News
        • Certificate News
        • Interest rate news
        • SMI News
        • Nikkei 225 News1
    • Carbon Markets
    • Raw materials
    • Funds
    • Bonds
    • Currency
    • Crypto
    • English
      • العربية
      • 简体中文
      • Nederlands
      • English
      • Français
      • Deutsch
      • Italiano
      • Português
      • Русский
      • Español
    StockNews24StockNews24
    Home » Around £28 a share, is it time for me to buy this overlooked FTSE growth stock on the dip?
    News

    Around £28 a share, is it time for me to buy this overlooked FTSE growth stock on the dip?

    userBy user2024-10-16No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    Share
    Facebook Twitter LinkedIn Pinterest Email


    Image source: Getty Images

    The FTSE 100’s Coca-Cola HBC (LSE: CCH) has dipped since its 31 July 12-month traded high of £28.52.

    I think this is mainly due to profit-taking after a 36% rise from its 12-month traded low of £20.65.

    Nonetheless, it appears a rare chance to consider buying the shares for investors who think it fits their overall portfolio aims.

    What are its growth prospects?

    Ultimately, rising earnings will power increases in a firm’s share price and dividend over time.

    In theory, the business looks full of promise to me, as a strategic bottling partner of The Coca-Cola Company. This in turn is a core holding of legendary investor Warren Buffet’s Berkshire Hathaway. So far, so good, as far as I am concerned.

    In practical terms as well, its H1 2024 results were strong. Organic net sales revenue jumped 13.6% year on year to €5.176bn (£4.33bn). Organic sales are a company’s revenue from its core operations, while reported sales include both organic and non-organic sales. Operating profit climbed 1.6% to €566m.

    The company flagged potentially challenging macroeconomic and geopolitical backdrops in H2. The variety of consumer profiles in the 29 countries in which it operates also remains a risk in my view.

    That said, it raised its key 2024 targets. Organic revenue growth is expected to be 8%-12% higher (compared to the previous 6%-7%). And organic earnings before interest and taxes growth is forecast to rise 7%-12% (from a 3%-9% forecast).

    Consensus analysts’ estimates are that its earnings will grow by 12% each year to the end of 2026.

    Are the shares undervalued?

    I never buy stocks that look overpriced compared to their competitors or to their future cashflow projections.

    On the key price-to-earnings (P/E) ratio of relative stock valuation, Coca-Cola HBC currently trades at 18.9. This is cheap compared to its peer group P/E average of 22.4.

    The same can be said for its price-to-book ratio of just 4.1 against a competitor average of 9.6.

    And it also looks a bargain on the price-to-sales ratio measure, presently trading at 1.2 versus a 2.3 average for its peers.

    To translate all this into hard cash terms, I ran a discounted cash flow analysis using other analysts’ figures and my own.

    It shows Coca-Cola HBC shares to be 43% undervalued at their current price of £28.10. So a fair value for the shares would be £49.30.

    They may go lower or higher than that, given the vagaries of the market. But this underlines to me how cheap the stock looks right now.

    Will I buy it?

    I have focused on stocks that pay very high dividends since I turned 50 a few years ago.

    Coca-Cola HBC last year paid a dividend of 93 euro cents (78p) that gives a current yield of just 2.8%. Analysts forecast that this return will rise to 3.4% in 2025 and to 3.7% in 2026.

    Nonetheless, these still fall well short of the average 9% or so that I receive from my core high-yield stocks.

    If I were even 10 years younger, I would buy the stock, as its earnings growth potential looks excellent to me. This should prompt a rise in the very undervalued share price and in the dividend too, I think.



    Source link

    Share this:

    • Click to share on Facebook (Opens in new window) Facebook
    • Click to share on X (Opens in new window) X

    Like this:

    Like Loading...

    Related

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleCan US Investors Benefit from Global Diversification?
    Next Article Income Investing: A patient craft
    user
    • Website

    Related Posts

    Can the Tesco share price soar another 30% this year? Here’s the growth forecast

    2025-08-06

    £10,000 in Dr Martens shares at IPO is now worth…

    2025-08-06

    Check out the surprising 5-year return from the Taylor Wimpey share price and dividend

    2025-08-06
    Add A Comment

    Leave a ReplyCancel reply

    © 2025 StockNews24. Designed by Sujon.

    Type above and press Enter to search. Press Esc to cancel.

    %d