Royal Mail share price: a better recovery option than Persimmon, Saga and Standard Life Aberdeen?

Having fallen by over 50% in the last year, it has clearly been a hugely testing time for investors in Royal Mail PLC (LON:RMG) (RMG.L).

In the near term, I wouldn’t be surprised if its share price comes under further pressure. Its UK Letters division continues to act as a drag on performance, with declining demand for its services likely to lead to further challenges in my view.

Although this may be offset to some degree by improving productivity, ultimately I think a digital economy could further reduce Royal Mail’s UK Letters division’s profitability.

Catalysts

However, I am of the view that the company’s UK Parcels operations could act as a catalyst on its financial outlook. With the increasing popularity of online shopping, demand for parcel delivery could increase at a fast pace over the long run.

Likewise, the company’s international operations seem to be performing relatively well. As more capital is invested internationally and it becomes a larger part of the overall business, I think the company could generate improving levels of profitability.

Recovery stocks

Of course, Royal Mail is not the only stock that has fallen in the last year. The likes of Persimmon plc (LON:PSN) (PSN.L), Saga PLC (LON:SAGA) (SAGA.L) and Standard Life Aberdeen PLC (LON:SLA) (SLA.L) have all seen their share prices come under sustained pressure.

Concerns about the housing market and the customer service levels of housebuilder Persimmon could hold back its shares in the near term. However, I think that a fundamental undersupply of new homes and its strong financial position could catalyse its long-term recovery.

Likewise, Standard Life Aberdeen seems to have a sound strategy in my view. Its decision to focus on core operations may mean that its P/E ratio of around 10 undervalues the business over the long run.

Meanwhile, Saga could experience an uncertain future to my mind. A change in CEO may mean further volatility, so I’d rather wait for more news on its performance before becoming more bullish on the stock.

Outlook

I think Persimmon and Standard Life Aberdeen could offer stronger turnaround potential than Royal Mail at the moment.

Although all three stocks could ultimately produce a recovery in the long run, I believe that Persimmon has the financial strength and operating environment to outperform FTSE 350 peers that have also been struggling in recent months.