5 Shares Cheryl Cole Might Buy
National sweetheart Cheryl Cole is triple A-rated. Available. Attractive. A millionaire.
Conventional financial advice is that younger people can afford to put more of their wealth into shares. Using what I know about Mrs Cole, I've scoured the market to find shares that she might like to own.
These five companies might appeal not just to Cheryl but anyone looking for a diverse group of blue chips.
Company Price (p) P/E (forecast) Yield (forecast, %) Market Cap (m)BT (LSE: BT-A.L - news)2259.14.217,610Sage30415.33.43,730Marks & Spencer (Dusseldorf: MA6.DU - news)37811.54.56,160Diageo (Xetra: 851247 - news)181217.72.645,630Unilever (Other OTC: UNLNF.PK - news)233618.53.366,3101) BT
Not just a pretty face, Cheryl is also a proud Geordie. I figured she might like to put some of h! er hard-earned cash into BT shares. The telecoms provider is a major employer in Cheryl's hometown and surrounding area with more than 3,800 staff on the payroll.
Shares in BT have had a good year and today trade within a whisker of their 52-week high. However, the next few years will be crucial to the company. BT's super-fast broadband service 'Infinity' is key to its ability to compete with Virgin Media (NasdaqGS: VMED - news) .
With the recent purchase of some Premier League football rights for next season, BT will also be competing head-on with British Sky Broadcasting (LSE: BSY.L - news) .
A long-term favourite with income investors, BT has increased its dividend for the last three years. At the interim stage this year, BT increased its payout by 15%.
Market consensus forecasts are for a 9.4p per share dividend for 2012, which puts the shares on an expected yield of 4.2%. The shares today trade at 9.1 times forecast earnings for 2013, falling to 8.9 times the expected 2014 result.
2) Sage
Financial-software specialist Sage is headquartered in Newcastle (Berlin: NCI.BE - news) -upon-Tyne and is another major! employer! in Cheryl's native North East. Possibly of more interest to Cheryl is that Sage also provided significant funding for the development of the Sage Centre, the area's leading music venue.
In recent years, Sage has matured from a high-growth/high-PE business into a respectable income/growth share.
Sage's growth has led to a fast-accelerating dividend. From 3.59p per share in 2006, the payout has increased year-on-year and is expected to hit 10.4p per share for 2012, equivalent to an average advance of 22% per annum. The shares currently trade on a forecast yield of 3.4%, rising further to 3.7% for 2013.
Earnings growth at the company is also impressive, with profits increasing throughout the economic downturn. Analysts expect earnings of 19.9p per share for 2012, rising to 22.1p per share for 2013.
3) Marks & Spencer
The development of new food lines has been an important part of Marks' growth in the last ten years. Indeed, one key culinary development during that time has been the emergence of the ready-meal for one.
As a single lady with a busy job, our Cheryl might be a big consumer of M&S' convenience dinners. So, if she likes the product, why not buy the shares?
Like BT, Marks & Spencer is also trading close to a high for the year. However, less growth is expected from the high-street favourite -- the dividend was held at the interim stage, suggesting that the final payout might also fail to progress. Nonetheless, the shares offer a healthy yield of 4.5%.
At present, the dividend is well-covered by earnings. But earnings did fall 9% during 2011/12 and another 5% decline is forecast for this year. Analysts expect M&S to return to double-digit growth during 2014.
4) Diageo
I like Cheryl, but sometimes she looks like she could do with feeding up. One of the best ways Cheryl could bring back the curves would be by downing a few pints of Guinness on a regular basis. Preferably in the comp! any of me! .
Guinness is just one of a collection of drinks brands owned by titan brewer Diageo. Others include Smirnoff and Bailey's.
Notably, the financial crisis and resulting economic downturn has proved no barrier to Diageo's growth. In the last five years, sales at the company have increased 33%, while in the same time, dividends have improved at an average 6% per annum. Earnings per share have increased, on average, by 14% a year for the last five years, too.
Better still, further growth is forecast. Analysts expect profits and dividends to increase by 10% this year, followed by another similar rise for 2014.
5) Unilever
Even one of the most beautiful women on television needs her cosmetics. Anglo-Dutch giant Unilever is the company behind many of the UK's leading personal care brands, including Dove, Pond's Cold Cream and Timotei.
Unilever also owns some food brands, such as Pot Noodle. Unfortunately for Geordie lass Cheryl, there doesn't seem to be a pease pudding flavour.
With such strong brands in its portfolio, Unilever is considered one of the blue-est of blue-chip companies. Unilever's share-price growth in the recent months has pushed the shares to a ten-year high. However, only modest dividend and earnings growth is forecast for the next two years.
Cheryl, meet Warren
Finally, companies that own strong brands are a regular choice of super-investor Warren Buffett. The 'Sage of Omaha' has been buying shares in a famous British company recently. Discover which one in our free report "The One UK Share Warren Buffett Loves". You can enjoy the report now -- simply visit Fool.co.uk and it will be delivered to your inbox immediately.
>David does not own any shares mentioned in this article. The Motley Fool has recommended shares in Unilever.