Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The 10 Most Popular FTSE 100 Shares

LONDON -- As the FTSE 100 is up over 5% so far this year, I wondered which companies investors have been loading up on. I contacted online stockbroker Selftrade, who supplied a list of the 10 blue-chip companies that have been subject of the most buy trades since the New Year.

Company Price (pence) P/E (2013, forecast) Yield (%, 2013 forecast) Market cap (millions of pounds)
Lloyds Banking  (LSE: LLOY  ) 52 13.9 0.4 37,470
Vodafone  (LSE: VOD  ) 165 10.5 6.1 79,800
Barclays  (LSE: BARC  ) 295 7.9 2.4 36,400
BG Group 1149 12.6 1.6 38,080
BP  (LSE: BP  ) 464 7.7 5.8 87,460
Aviva  (LSE: AV  ) 370 7.8 6.6 10,940
GlaxoSmithKline 1419 11.9 5.5 69,240
Royal Bank Of Scotland 359 13.3 0.0 41,590
Legal & General 150.5 10.0 5.4 8,970
Sainsbury (J) 328 11.1 5.1 6,200

I thought that five of these looked particularly interesting.

Lloyds Banking Group (Lloyds)
Apparently, the New Year is the time when shoppers look to tighten their belts and rein in spending. It may come as a surprise, therefore, to learn that the best-performing blue chip of 2012 has been the most sought-after share of 2013.

Clearly, it is not just Selftrade's customers that have been buying Lloyds. Shares in the bank have risen 8.5% so far this year. It would be very unusual for a blue-chip share like Lloyds to rise that much without new managed fund buying.

Lloyds' rally has run out of steam in recent weeks. However, I think there is potential for further rises when investors digest Lloyds' next results.

Shares in blue-chip titan Vodafone are up 6% in 2013. That's a significant rise. The shares fell 15% in a miserable 2012.

The shares jumped earlier in the month following media reports that raised the prospect of Vodafone receiving a bid for its U.S. operations, Verizon Wireless.

Vodafone is one of the FTSE 100's dividend titans. In 2012, the company paid out more in dividends than any other FTSE 100 member. The chunky dividend yield is my main reason for owning the shares. This year, I expect the company to pay out dividends totalling 9.81 pence -- that equates to a yield of 6.1%. I fully expect the dividend to increase next year.

Vodafone is currently in the middle of a 1.5 billion-pound share buyback. This could lead to a short-term spike in the company's share price.

Barclays shares are nearly double the price they were when former CEO Bob Diamond departed in 2012. Though the rise has been huge, I think that further increases could be in store.

That's because on today's share price, Barclays is still vastly undervalued in comparison with the average FTSE 100 share. Today, Barclays shares trade on a 2013 price-to-earnings (P/E) ratio of just 7.9. The average for a U.K. blue chip is 16.4. The income from Barclays stock is less: 2.4% versus the market's average 3.3%.

Barclays' miserable rating might make sense if profits were sinking. Yet the 2013 earnings per share (EPS) forecast is 5% ahead of what the bank is expected to report for 2012.

Provided the eurozone can stay on track, I see substantial upside from the shares in 2013 alone.

With each passing week, the Gulf of Mexico disaster fades a little bit more in investors' memories. BP shares jumped at the start of the year following a settlement between disaster rig partner Transocean and U.S. authorities. BP investors cheered this news as it raises the possibility that BP's share of any further punishments may be less.

Despite the rise, the shares still look cheap. BP is expected to increase its dividend 35% on last year's payout. Another 12% is forecast for 2013. This puts the shares on a 2013 yield of 5.8%.

I expect that by 2014, most of the speculation around the shares will focus on BP's new Russian partnership with state energy company Rosneft.

Aviva is a well-known company with a big dividend yield. Provided that remains so, it will always have a big following among the customers of a stockbroker like Selftrade.

The more discerning among these will be analysing the likelihood of Aviva maintaining (and increasing) its dividend. Analysts currently expect that Aviva will announce earnings per share for 2012 of 48.4 pence. It looks likely that the dividend for the whole year will be 26.0 pence, the same as in the previous year.

Worryingly, Aviva's interest costs are more than its annual dividend payments. For 2011, the company paid out 506 million pounds of dividends and 708 million pounds on debt interest. Aviva's new chief executive has been in the role since the New Year. Of all the yields in the FTSE 100, it is Aviva's that concerns me most.

Of course, you might prefer to avoid the shares that investors have been jumping on in 2013. Going against the consensus is a common trait among some of the world's best investors.Warren Buffett has famously spoken of the importance of being a contrarian. This super-investor has recently been buying shares in a FTSE 100 company himself. To find out which one and the price he paid, get the free Motley Fool report "The One U.K. Share Warren Buffett Loves." The report is 100% free and will be delivered to your inbox immediately. Just click here to start reading today.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2213032, ~/Articles/ArticleHandler.aspx, 9/26/2016 10:09:11 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 53 minutes ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 12:11 PM
AV $442.61 Up +4.51 +1.03%
Aviva CAPS Rating: No stars
BARC $166.31 Down -1.79 -1.06%
Barclays CAPS Rating: No stars
BP $432.17 Up +0.17 +0.04%
BP CAPS Rating: No stars
LLOY $54.25 Down +0.00 +0.00%
Lloyds Banking Gro… CAPS Rating: No stars
VOD $219.99 Down -0.21 -0.10%
Vodafone CAPS Rating: No stars