Sunday newspaper share tips

By THIS IS MONEY
Updated:

 

Each week, we round up the main share tips from the Sunday newspapers.

You'll also find this week's renowned Midas column from the Mail On Sunday here

The Sunday Telegraph

Oil and gas firm BG Group (£10.85) reported fourth quarter results last week in which profits were 15% ahead of expectations. The last quarter of 2008 was the 10th consecutive period in which the company posted a set of consensus-beating numbers.

The real star was its liquefied natural gas (LNG) operations, which beat all expectations. Operating profits in these operations soared by 204% to £1.59bn, because the company locked in sales on long-term contracts when LNG prices were high.

This means that results in 2009 will also be flattered by these contracts, with around 80% of sales expected to be on these long-term deals. This figure falls to 70% to 75% in 2010.

The company expects global LNG production to more than double to around 400m tonnes a year by 2020, with around 70m tonnes of new capacity delivered by 2011.

Strong exploration success in Brazil also helped BG to report a 64% year-on-year jump in proved and probable oil and gas reserves. It also affirmed its production growth target of 6% to 8% to 2020.

The shares are currently trading on a December 2009 earnings multiple of 14.3 times, which is a premium to BP shares on 8.8 times and Royal Dutch Shell on 8.2 times, but this represents the company's superior growth profile. Buy.

Most watched Money videos