One to watch: Centrica

CENTRICA has four major brands: British Gas, which trades as Scottish Gas north of the Border; Centrica Energy; Centrica Storage; and Direct Energy. British Gas supplies gas, electricity and "services" to UK residential and business customers and has about 15.7 million clients.

Direct Energy is one of North America's largest energy providers, with more than six million customers in ten Canadian provinces and 46 US states.

Centrica's shares have underperformed both the market and its peer group in the past 12 months principally on concerns about margin pressures. UK wholesale gas and electricity prices have surged over the year whilst the hikes in North Sea tax levels have also hit the upstream business. However, British Gas recently announced substantial rises in prices, gas up 18 per cent and electricity up 16 per cent, and this should help. A constituent of the FTSE 100 index, Centrica's shares may not be the most exciting but, offering a yield of around 4.5 per cent and on a conservative price earnings ratio of nine, they look an attractive commitment to the oil and gas sector.

Centrica

294.8p -10.2p

Scotsman says BUY

• The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.

BROKER SNAPS

Shell

1,890p -35p

Broker says BUY

AMID the market turbulence, Jonathan Jackson, head of equities at Killik & Co, highlighted ten "high-quality companies" in which to invest, including oil giant Shell. He added: "Shell is financially strong, and the shares currently offer a dividend yield of 5.4 per cent, covered 2.6 times by earnings."

Stagecoach

216.8p -9.4p

Broker says BUY

SHORE Capital has retained its "buy" rating on Perth-based transport group Stagecoach. The broker said: "The group could prove counter-cyclical and, with the consumer squeeze, could continue to outperform with the potential attraction of a total return of 42 per cent over two years at the current share price."