Should You Buy These 5 FTSE 100 Shares?

LONDON -- I have recently been evaluating the investment cases for a multitude of FTSE 100 companies.

Although Britain's foremost share index has risen 9.1% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others look overdue for a correction. So how do the following five stocks weigh up?

Wood Group
I believe that oil equipment services firm Wood Group  (LSE: WG  ) represents great growth potential at a reasonable price.

The firm's 2012 results released yesterday showed pre-tax profits leap 43% to $363 million, driven by underlying revenues increasing 20% to $6.8 billion.

Wood Group expects all of its divisions to make headway in 2013, adding that conditions in the global energy markets are likely to remain favorable. Exploration and development spend rose 9% last year, and the company reckons that its prospects should remain solid over the long term.

City analysts forecast earnings per share to rise 31% this year. Earnings are then forecast to jump an additional 16% in 2014. This stellar profit growth is set to deliver ever-improving investor value, with a P/E ratio of 12.1 in 2013 projected to fall to 10.5 next year.

Wood Group's relative cheapness is underlined by a lowly price/earnings to growth (PEG) multiple, which is expected to come in at 0.4 and 0.7 in this year and next. A reading below 1 often represents excellent value.

CRH
I reckon that CRH  (LSE: CRH  ) is chronically overvalued at current levels. The construction specialist's shares have rallied to fresh highs above 1,500 pence in recent days, despite the precarious state of the European and North American building markets.

The group's 2012 results released last month showed pre-tax profit dip 5% to 674 million euros due to enduring difficulties within the firm's core Western markets. Revenues crawled just 3% higher to 18.7 billion euros.

City analysts predict a 60% earnings per share slide in 2013, before a 35% bounceback in 2014. This leaves CRH on P/E ratios of 20.5 and 15.2 for this year and next, which I consider nosebleed territory given the downside risks, particularly as the bombed-out markets of Europe continue to struggle.

The company is expected to offer a dividend yield of 3.8% and 3.9% for 2013 and 2014, respectively, above the FTSE 100 average of 3.5%. However, the potential for formidable earnings pressure could jeopardize any shareholder payouts, particularly with miserly coverage of 1.3 and 1.7 predicted for this year and next.

Randgold Resources
I expect shares in Randgold Resources  (LSE: RRS  ) to head north as a combination of surging production levels over the medium term and ascending precious metals prices pushes earnings higher.

The company churned out 794,844 ounces of gold last year, up 14% from 2011 levels. This helped deliver record profits of $511 million, a 16% increase.

And Randgold is aiming to significantly increase output at its other assets to build future growth, particularly at its Kibali project in the Democratic Republic of Congo, which is due to start production in the fourth quarter. The miner hopes to produce 600,000 ounces of gold per year from this project alone between 2014 and 2023.

Earnings per share are on course to rise 20% in 2013, according to broker forecasts, and a further 38% the following year as groupwide production ramps up.

I think that, given these exciting growth prospects, the gold miner offers decent value for money -- a P/E ratio of 14.4 for this year is expected to decline to 10.5 in 2014. A PEG estimate of 0.7 and 0.3 for 2013 and 2014 ,respectively, also illustrates Randgold's position as a great value stock.

United Utilities 
Although water provider United Utilities  (LSE: UU  ) provides income investors with juicy dividends, I think the group's shares remain too high at present levels.

City estimates put the dividend yield for the year ending March 2013 at 4.6%, well ahead of the FTSE 100 average, and the income is expected to rise to 4.9% and 5.1% in 2014 and 2015, respectively. In addition, the dividend is buttressed by respectable earnings growth forecasts -- analysts expect earnings per share to rise 14% during 2013, followed by 9% and 7% growth in 2014 and 2015.

However, these shares currently change hands at what I consider to be over-the-top prices. A P/E ratio of 18.5 for the current year is due to drop to 16.9 and 15.8 in 2014 and 2015, according to City forecasts.

Furthermore, the effect of forthcoming changes to water industry regulations -- to be discussed next year ahead of implementation across the 2015-2020 period -- could severely crumple earnings over the longer term.

Next
I believe that clothing retailer Next  (LSE: NXT  ) should continue to shrug off tough conditions on the High Street and post resilient earnings expansion.

January's trading update revealed a 4% rise in Next Brand sales from the beginning of November to Christmas Eve last year, while revenues at its Next Directory online and catalogue arm leapt an impressive 11.2%. Investment in this division in particular should support future growth.

City analysts expect earnings-per-share growth to maintain double-digit momentum over the medium term -- 10% increases are expected during this year and next.

A decent dividend is also on offer to beef up the investment case, with brokers projecting a yield of 2.6% and 2.9% for 2014 and 2015.

Next currently trades on a P/E ratio of 13.4 and 12.2 for the current year and next. I'm convinced this rating is justified given the company's proven ability to grow earnings despite enduring weakness in the U.K. retail sector.

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