15 Shares Trading Near 52-Week Highs

LONDON -- It seems that whatever the economic backdrop, some shares will always be faring well.

The eurozone crisis and the U.K. recession are two of investors' biggest worries. Despite those concerns, these companies are trading within 3% of their highest price of the last year.

I trawled the market to find the 15 largest companies trading near their 52-week high. Have these shares peaked, or do their prospects mean that there could be further gains to come?

Company

Price (pence)

Yield %

P/E

Market cap (millions of pounds)

Diageo

1730

2.5

17.5

43,251

Centrica

327

4.8

12.4

16,981

Compass

709

2.8

19.0

13,272

British Sky Broadcasting

761

3.3

14.0

12,741

Associated British Foods

1320

1.9

19.1

10,512

Experian

1000

2.0

24.3

10,086

Aggreko

2360

0.9

22.4

6,330

J Sainsbury (LSE: SBRY.L  )

327

4.9

11.6

6,176

Smith & Nephew

667

2.0

14.2

5,991

Next

3580

2.5

14.3

5,895

Johnson Matthey

2400

2.4

15.6

4,922

British Land

540

4.8

10.0

4,798

RSA Insurance (LSE: RSA.L  )

114

8.1

13.3

4,047

Whitbread (LSE: WTB.L  )

2130

2.4

17.2

3,792

Babcock International (LSE: BAB.L  )

937

2.4

20.6

3,367

Four shares stood out.

Sainsbury's
Shares in Sainsbury's are up 10.2% this year. This is a far superior performance to Tesco (-10.3%) and Morrisons (-4.1%) in the last year.

According to the Kantar Worldpanel survey, Sainsbury's managed to increase its share of the U.K. grocery market. Sainsbury's growth in the last 12 months outpaced its three big rivals Tesco, Morrison's and Asda.

Sainsbury's clear progress will have helped reassure the market of its future profitability.

Sainsbury's is expected to deliver a slight increase in earnings for 2013. This puts the shares on 11.3 times the 2013 consensus estimate. The shares are expected to yield 5% for the year. By both measures, Sainsbury's is cheaper than most of its FTSE 100 peers. Although the shares are already up significantly this year, Sainsbury's growth is encouraging and the dividend is respectable.

Whitbread
Perhaps when you hear the name Whitbread, you think "brewer." However, Whitbread is today a hotels and leisure business.

Since selling its beer company in 2000, most of Whitbread's revenues are derived from its hotels and coffee businesses: Premier Inn and Costa Coffee.

Of total revenues for 2012 of 1.8 billion pounds, 756 million pounds were delivered by Premier Inn and 542 million pounds by Costa. The balance comes from Whitbread's restaurants businesses such as Beefeater and Taybarns.

While this sort of discretionary spending might be expected to collapse in a recession, Whitbread has been thriving. In the five years since 2007, sales are up 51.4%. This progress has flowed through to the bottom line and shareholders' pockets. In those five years, earnings per share have risen from 44.1 pence to 124 pence. The dividend has increased in each of the last five years from 30.3 pence to 51.3 pence.

Although the shares currently trade at an all-time high, they do not yet appear overpriced. Another two years of double-digit profit growth is expected. Whitbread shares trade on 14.6 times 2013 consensus estimates, falling to 13.2 times the 2014 number.

RSA Insurance
RSA frequently crops up in market trawls due to its high market capitalization and massive dividend. For the last 12 months, RSA shares have fallen in the expectation that the dividend would be cut. This has not happened. RSA's dividend was even increased 2% at the interim stage. The shares are up 16.7% in the last three months to their highest price since late March.

This means that RSA shares trade on 9.6 times the consensus EPS forecast for 2012. With a forecast dividend of 9.4 pence, the shares come with an expected yield of 8.2%. While dividend cover may look thin, EPS is expected to rise 14.5% in 2013.

Helping underpin the RSA share price is the company's net asset value. At the interim stage, this was reported as 102 pence per share. In the last five years, the RSA share price has spent approximately three weeks trading below 100 pence. All the while, the company has never cut its dividend. RSA looks like the outstanding blue chip, high-income share on the market today.

Babcock International
Babcock International is another company whose shares are trading at an all-time high.

In July, the company issued a trading statement saying that management expects to meet its expectations for the financial year. Perhaps surprisingly, Babcock explained that the current economic climate actually works to the company's favor as more companies look to outsource labor and expertise.

Analysts expect Babcock to deliver a massive 52.3% increase in EPS in 2013. With five months of the 2013 year gone, it looks as though the investment community is starting to believe in the analysts' forecasts.

Babcock's dividend has increased year over year since 1998. Another two years of above-inflation dividend growth are expected. While the current yield may be less than average, this is a result of the considerable share price growth in the last two years. Babcock isn't a stingy payer: for the last five years, the payout has increased at an average of 23% per annum.

Just because these shares have performed well does not mean that they will continue to rise. Stock markets are forward-looking. If investors decide that their prospects have changed, then share prices could move downwards. To understand how investment markets work, download The Motley Fool's free report: "What Every New Investor Needs To Know". This report is 100% free and will be delivered immediately to your inbox.

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Further investment opportunities:

David O'Hara does not own shares in any of the above companies. The Motley Fool owns shares of Tesco and Smith & Nephew. Motley Fool newsletter services have recommended buying shares of Diageo. The Motley Fool has a disclosure policy.
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