Are These FTSE 100 Shares a Buy?

LONDON -- I have recently been evaluating the investment cases for a multitude of FTSE 100 companies. Although Britain's foremost share index has risen 4.3% so far in 2013, I believe many London-listed stocks still have much further to run, while others seem overdue for a correction. So how do the following five stocks weigh up?

Burberry (LSE: BRBY  )
I believe Burberry is primed to advance strongly as retail store space increases and activity in emerging markets continues to take off.

The fashion icon announced in last week's trading update that underlying revenue rose 9% in the six months to March 2013 to 1.1 billion pounds, with retail and wholesale turnover from the Asia-Pacific region advancing 15.5% to 447 million pounds. The company said it plans to concentrate new store openings within the growth hotspots of China and Brazil.

City analysts expect earnings per share to have advanced 8% in the year ending March 2013 to 68 pence before accelerating 15% in the current year to 78 pence. A 13% rise has been penciled in for 2015 to 89 pence per share.

Burberry also provides exciting dividend prospects for investors, having raised its final dividend by 25% in 2012 to 25 pence. Brokers expect the payout to increase to 32 pence and 37 pence per share, respectively, in 2014 and 2015.

The luxury goods manufacturer was recently changing hands on a P/E rating of 16.6 for 2014, above the forward earnings multiple of 15.6 for the entire personal-goods sector. However, Burberry's rating is anticipated to fall to 14.6 in 2015. A P/E-to-growth readout of 1.1 for this year and next outlines the firm's reasonable price -- a figure around one represents exceptional value for money.

British Sky Broadcasting (LSE: BSY  )
I view recent weakness in British Sky Broadcasting's stock price as a fresh buying opportunity. The company is ratcheting up activity in the face of mounting competition from the likes of BT Group in order to maintain earnings growth. Sky has recently rolled out initiatives such as its Now TV pay-as-you-go sports service to boost its television business, and in March it bought Telefonica's U.K. consumer broadband and fixed-line telephony arms to boost its operations.

EPS is primed to rise 12% to 57 pence in 2013, according to broker estimates, before rising a further 5% the following year to 60 pence. Sky currently trades on respective P/E ratings of 14.7 and 14 for this year and next, carrying a premium to the entire media sector's forward earnings multiple of 12.1, but I believe the company's track record of consistent growth justifies the higher rating.

As well, Sky is strongly committed to boosting dividends, having hiked last year's total payout 9% to 25.4 pence per share. Brokers expect the payment to increase to 28.6 pence in 2013 and 30.8 pence per share in 2014.

The broadcaster is also pursuing an extensive share-buyback program, and last year it received approval to purchase up to 500 million pounds in additional shares. The firm repurchased 414 million pounds' worth of shares in the second half of 2012.

British Land (LSE: BLND  )
I am backing shares in real-estate investment trust British Land Company to gain traction as its stellar asset-management and exciting acquisition plans ignite earnings. The company sold its Ropemaker Place development in the City of London for 472 million pounds in March and raised 500 million pounds via an equity placing to latch onto a flurry of exciting opportunities entering the market.

City analysts expect EPS to have edged 2% higher in the year ending March 2013 to 30.2 pence before increasing another 2% in 2014 to 30.1 pence. A 7% rise is forecast for the following year to 33 pence per share.

British Land is a favored pick among income investors thanks to its lucrative dividend policy. The firm's 26.1 pence payout in 2012 is anticipated to rise to 26.5 pence for 2013 before marching on to 27 pence in 2014 and 28 pence in 2015. British Land's dividend yield is well ahead of the current forward FTSE 100 average yield of 3.3%, with readings of 4.5%, 4.6% and 4.8% penciled in for 2013, 2014, and 2015, respectively.

British Land currently trades on respective P/E ratings of 18.5 and 17.3 for 2014 and 2015 -- and at a meaty discount to a forward earnings multiple of 24.7 for the wider REITs sector. This discount makes the firm a snip in my opinion, given improving earnings growth projections and a delightful dividend policy.

Direct Line Insurance (LSE: DLG  )
Although not a member of the FTSE 100 index, Direct Line Insurance offers investors the opportunity to latch onto heavyweight earnings increases in coming years.

The firm -- which listed on the London Stock Exchange in October after Royal Bank of Scotland spun off a sizable chunk of the insurer's entity -- saw operating profit from continuing operations jump 9.3% to 461.2 million pounds in 2012. Direct Line is a huge player across a myriad of insurance subsectors, which I believe should deliver solid growth.

City experts have penciled in an EPS decline of 12% for 2013 to 19 pence, although a strong rebound is expected in the following 12 months: Growth of 27% to 24 pence is expected next year. And the insurer also offers chunky payouts to stakeholders, with last year's full-year payout of 8 pence expected to rise to 12.8 pence and 14.4 pence per share, respectively, in 2013 and 2014. Dividend yields for these years come in well ahead of the FTSE 100 forward average, at 6.2% and 6.9%.

Direct Line trades on a P/E rating of 10.6 for 2013, which dips well into bargain-basement territory of 8.4 for 2014, providing greatly improving value for money when viewed against a forward earnings multiple of 10.1 for the wider non-life-insurance sector.

Shire (LSE: SHP  )
I reckon shares in pharma play Shire are ready to shoot higher as a combination of accelerating research and development and acquisitions helps propel growth over the medium to long term. Shire raised R&D spending 16% last year to $848.8 million, which should turbocharge its product pipeline and deliver stellar sales increases well into the future. Goldman Sachs expects turnover to rise around 10% a year until 2017, compared to a 3% rise across the entire pharma sector.

As well, I fully expect the firm's substantial $1.4 billion cash pile to drive M&A activity during the coming years. The company purchased SARCode Bioscience of the U.S. and Premacure AB of Sweden in recent months to bolster its ophthalmology activities, for example.

Earnings per share are expected to explode 68% this year to 147 pence, with growth of 14% marked up for 2014 to 168 pence.

The company was recently changing hands on respective P/E ratios of 13.4 and 11.7 for 2013 and 2014, representing a gargantuan value gap from an average forward earnings multiple of 41.5 for the wider pharmaceuticals and biotechnology sector. Indeed, Shire's position as a great value stock is underlined by a PEG readout of 0.2 for this year and 0.8 for next.

Zone in on other sterling stocks
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