Are These FTSE 100 Shares Buys?

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

Although Britain's foremost share index has risen 10% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others seem overdue for a correction. So how do the following five stocks weigh up?

BP
The fallout surrounding the 2010 Deepwater Horizon oil crisis continues to weigh heavily on industry giant BP  (LSE: BP  ) . The company has heavily divested assets to cover the cost of the accident, the trial for which is ongoing and which BP expects final compensation to come out at $42 billion.

Although the court case currently hangs wearily over the oil giant, I believe rocketing production should propel earnings higher over the longer term. Output is set to surge higher from this year onwards at BP's major new projects, while maintenance-related closures at its other installations are set to slow considerably.

City analysts expect earnings per share to rise 39% in 2013 before leaping 8% in 2014. The oil leviathan currently trades on P/E ratios of 7.9 and 7.3 for this year and next, and whose excellent value for money is underlined by price/earnings to growth (PEG) projections of 0.2 and 0.9 for the same two years.

As well, BP's dividends are expected to remain well above the average 3.5% yield for the FTSE 100 -- yields of 5.1% and 5.3% are anticipated in 2013 and 2014 correspondingly.

Centrica
I reckon Centrica  (LSE: CNA  ) is an excellent pick for income investors looking for consistent dividend growth. The energy provider boasts a progressive payout policy, and City analysts expect a 16.4 pence per share dividend to rise to 17.4 pence and 18.3 pence per share during 2013 and 2014 correspondingly.

Yields of 4.9% this year and 5.2% in 2014 are projected, and although coverage of just 1.6 times is predicted, Centrica's position in the ultra-defensive utilities sector should protect shareholder payments.

Group revenues increased 5% last year to £24 billion, which pushed total adjusted operating profit 14% higher to £2.7 billion. Despite the ongoing furor over last October's decision to hike household energy prices, the firm remains highly resilient and continues to add new custom.

Earnings per share are forecast to rise 2% and 8% in 2013 and 2014 respectively. And I fully expect earnings to speed up thereafter, as rising strength within the British Gas subsidiary, combined with a drive to build the group's upstream oil businesses both in Europe and the U.S., delivers improving investor returns.

Evraz
Enduring weakness in the steel price, allied to the potential for further large production closures, makes Evraz  (LSE: EVR  ) a risky selection in my opinion.

Group crude steel production fell 5% to 16 million tonnes in 2012, the company said in January, as the impact of a vast modernization program -- combined with the closure of a facility in the Czech Republic -- pushed output lower. Evraz expects production to improve this year as its upgrade scheme nears completion, however.

City brokers expect earnings per share to have slumped 86% in 2012, before planned production increases thrust earnings 210% and 39% higher in 2013 and 2014 respectively. Results for last year are due for release on Thursday, 11 April.

The company currently trades on P/E ratings of 23.9 and 17.2 for this year and next, and I think that these are far too expensive. I would like to see production-rate improvements this year, as well as a marked improvement in global steel demand, before ploughing my cash into this mining play.

Kazakhmys
I believe copper miner Kazakhmys  (LSE: KAZ  ) could be set for further woe as falling production levels, rising output costs and the potential for fresh copper-price volatility could trouble the company.

City brokers anticipate a 64% plunge in earnings per share to be reported for 2012, results for which are due on Tuesday, March 26. Earnings are expected to dip fractionally in 2013 before falling 3% in 2014.

The company currently trades on a P/E ratio of 8.1 for this year and 8.3 for 2014, which is cheap given a forward earnings multiple of 15 for the broader mining sector. However, I believe that such a low rating is justified given worsening near-term production issues.

Last month's trading update revealed a 2.3% fall in copper cathode production from its own sources last year, to 292,000 tonnes. And Kazakhmys expects output to come in between 285,000 tonnes and 295,000 tonnes in 2013.

The firm hopes to hike group output to 500,000 tonnes by 2018, but potential ramp-up problems and further copper-price weakness could continue to blast the bottom line -- operating profits fell 70% in 2012 to $368 million, Kazakhmys said in February.

Smiths Group
Shares in Smiths Group  (LSE: SMIN  ) have maintained their rapid ascent, reaching near-two-year highs above 1,310 pence in recent days. And I believe its operations across a collection of red-hot growth sectors should keep delivering solid growth.

The diversified engineer has its fingers in many pies, and underlying revenues increased across all divisions in the three months to 3 November. Smiths Group's product offerings straddle the oil, gas, health care and security sectors, among others.

Earnings per share are set to rise 3% in 2013, according to broker forecasts, with a further 7% rise penciled in for 2014. The accelerating stock price has caused the firm's earnings multiple to leap to 13.8 and 12.9 for this year and next, compared to an average forward reading of 10.8 for other general industrials plays, but in my opinion, the strength of its businesses warrants this premium.

Moreover, Smiths Group is expected to continue steadily building dividends, with payouts of 39.9 pence and 42.3 pence per share expected for 2013 and 2014 respectively, up from 38 pence per share last year. These prospective dividends carry yields of 3.1% and 3.3% for this year and next.

The canny guide for clever investors
Whether or not you already hold shares in any of these companies, I'd urge you to check out this newly updated special report, which highlights a host of other FTSE winners identified by ace fund manager Neil Woodford.

Woodford -- head of U.K. Equities at Invesco Perpetual -- has more than 30 years' experience in the industry, and boasts an exceptional track record when it comes to selecting stock market stars.

The report, compiled by The Motley Fool's crack team of analysts, is totally free and comes with no further obligation. Click here now to download your copy.

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