Manufacturing giant BAE Systems (GB:BA) and mining company Glencore (GB:GLEN) are among the most common large-cap stocks in the UK market. Analysts are bullish on these stocks and confident about the further upside in their share prices.
Both companies are also good dividend payers, ticking the box for value investors as well.
TipRanks provides a variety of tools like its Shares Screener, Stock Comparison, High-Dividend Stocks, and more for picking such stocks from any particular market. With the help of these tools, investors could screen the stocks based on different parameters and compare them accordingly.
Let’s have a look at these companies in detail.
Glencore PLC
Glencore is a commodity mining company with a diversified portfolio of products such as copper, cobalt, nickel, zinc, lead, etc.
In February, the company released its preliminary results for 2022, showing solid growth numbers. The company’s revenues increased by 26% to $255.9 billion in 2022. The net income for equity holders jumped by 248% to $17.3 billion as compared to $4.9 billion in 2021. The record numbers were mainly driven by a higher coal demand, which contributed to more than half of its earnings.
Analysts were also impressed by the $7.1 billion in payments announced for shareholders, including dividends and a $1.5 billion share buyback.
The total cash distribution is $0.44 per share for 2022. The company has a dividend yield of 6.23%, as compared to the industry average of 1.63%.
Is Glencore Stock a Good Buy?
The stock enjoys Buy ratings from many highly-rated analysts on TipRanks. After the company posted a strong set of results, several analysts reiterated their Buy ratings.
According to TipRanks’ rating consensus, GLEN stock has a Strong Buy rating.
The average target price is 630.8p, which represents growth of 23% on the current price level.
BAE Systems PLC
BAE Systems is a leading manufacturer of defence products used in the air, land, marine, and cyber security sectors.
The shares have gained almost 30% in the last year, with record growth in their orders since Russia invaded Ukraine in 2022.
In the recently announced 2022 annual results, the company generated another set of strong numbers. The company added orders worth £37 billion in 2022, leading to a total order backlog of £58.9 billion as of December 31, 2022. The company’s revenues increased by almost 9% to £21.2 billion, driven by strong dollar growth.
Talking about the shareholders’ return, BAE announced a new share buyback programme for £1.5 billion and a total dividend of 27.0p per share in 2022. The dividend was 7.6% higher than what was paid in 2021.
Analysts remain bullish on the stock as governments are raising their military budgets for more advanced technologies, which will push the company’s top-line growth. The company is expecting to grow its operating profits between 4% and 6% in 2023.
BAE Systems Stock Forecast
BA stock has a Moderate Buy rating on TipRanks, based on five Buy and two Hold recommendations.
The average target price is 1,053.64p, which is 16% higher than current trading levels. The price target has a low and a high forecast of 1,146p and 950p, respectively.
Conclusion
Both Glencore and BAE Systems have demonstrated strong growth potential and commitment towards higher shareholders’ returns through their results.
Amid the volatility in commodity prices, Glencore is set for another profitable year in 2023, with additional demand from China’s reopening and its new-age metals portfolio.
As for BAE, analysts are bullish on its strong order backlog and diversified product range for various markets. These multi-year orders will likely provide a steady revenue generation stream to the company in the future.
