But I have to say that not even predictions of another hefty dividend rise in 2019 — from 12.7p per share last year to 15.4p this time around — is enough to tempt me to buy the financial giant today. And nor is a subsequent market-bashing payout yield of 6.9%.

There’s a very good reason why Arrow Global is one of the most shorted stocks on London indices right now (according to shorttracker.co.uk it’s in the top three), namely increasing fears over Brexit and how this will impact profitability in the near term and beyond. And I share the market’s apprehension.

Bale out on Brexit worries

The business is involved in buying up debt and then subsequent collecting it. Although it’s been ramping up its operations in Europe in recent years, the threat of severe economic turbulence in its home market is casting doubts on how much of  this debt it’ll actually be able to recover.

As I’ve noted before, Britain’s major listed banks are already battling against a steady rise in the number of bad loans on their books, reflecting the impact which Brexit uncertainty is causing across the UK economy. Heaven knows how bad things could get should the impasse on resolving the political saga persist or, even worse, politicians push the country down the road of a destructive no-deal exit from the European Union.

Sure, Arrow Global may have been taking steps to insulate itself by buying up better-quality debt. But in the event of a disorderly Brexit outcome — a scenario which many suggest would even push the UK into recession — it’s still likely to be fighting a losing battle to keep its growth story on track.

It’s not all about Brexit, though

However, the possibility of an economic crash in the UK isn’t the only concern for the company’s shareholders. I’m not talking about the impact of a broader slowdown in the global economy, either. There’s also been plenty of public scrutiny over accounting issues at the loans specialist, and the prospect of fresh rounds as we move through 2019 and beyond provides more reason to be cautious.

So forget about Arrow Global’s big yields and its lowly forward P/E ratio of 5.1 times. There’s good reason why the company is valued so cheaply and is likely to remain so as the risks to its bottom line rise.

City brokers currently suggest group earnings will rise 20% in 2019, although I reckon this figure is in danger of being hacked down sooner rather than later. My advice? Give the big yielder a very wide berth and go dividend shopping elsewhere. 

The post Forget the 7% yields! I reckon this dividend stock could plummet appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

1. Metro Bank

FTSE 250-listed Metro Bank (LSE: MTRO) has been in the headlines for all the wrong reasons. It’s now the most shorted stock on the UK index, according to fund manager Fidelity, with a whopping 12.49% of its shares shorted.

The high street challenger bank was only founded in 2010, but 2019 has been its annus horribilis, with the Metro share price losing three quarters of its value since January. That happened when it announced a £350m share placing to patch up an accounting error. Sorry, to finance future growth.

Metro stock has fallen after it admitted mis-pricing £1bn of commercial and buy-to-let loans, leaving itself short of capital. My concern is that when problems emerge in banks (and others) they tend to run deeper than originally thought. 

That said, the Bank of England’s Prudential Regulation Authority recently said Metro is “profitable and continues to have adequate capital and liquidity to serve its current customer base” and earnings forecasts seem positive, with City analysts forecasting 51% growth next year.

If you think you can match that, then now would be a good time to buy. However, given its problems, I expected a cheaper forecast valuation of 21.4 times earnings. I still find Metro difficult to love. I’m not sure management has learned its lessons yet.

2. Arrow Global Group

So why have investors got it in for European credit specialist Arrow Global Group (LSE: ARW)? It is almost as heavily shorted as Metro, with 10.91% betting against it.

Arrow buys up debt from banks, credit card companies and telecoms businesses, then tries to make money from collecting it. This model reaped rewards after the financial crisis when distressed debt was dirt cheap. But margins have been shrinking as the group reduces its risk profile by purchasing fewer, better quality debt portfolios.

CEO Lee Rochford painted a bullish picture last month, saying Arrow is a “highly cash-generative business” and the debt pricing environment should improve. Free cashflow grew 32% to £57.8m, while core collections increased 22.7% to £105.5m. Underlying profit before tax increased 14.1% to £16.2m, further improving the picture.

In contrast to Metro, the Arrow share price chart has been pointing upwards lately, rising 11% in the last three months. Combine that with a rock-bottom valuation of 5.3 times forward earnings and Arrow stock starts to look tempting. Especially since earnings are forecast to rise 6% this year and an impressive 16% next. There is a massive dividend too, with the current forecast yielding 6.9%, and cover of 2.7.

Arrow seems to hit the target but I’m worried the hedge funds shorting its shares know something I don’t, especially with brokers Berenberg warning of a lack of accounting transparency. Tempting at this price, but assess all the dangers first.

The post Is it time to show some love to the UK’s 2 most hated stocks? appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Metro Bank

According to shorttracker.co.uk, challenger bank Metro Bank (LSE: MTRO) is currently the most shorted stock in the UK, with nearly 12% of its shares being shorted.

Now, Metro Bank shares have already had a shocking run over the last 12 months, losing over 85% of their value. They were down another 11% yesterday. Much of this has been related to the fact that the group has been trying to raise £350m to fill a hole in its balance sheet after an accounting error led to some loans being assessed in the wrong risk band. This capital raising will dilute existing investors’ holdings. The bank may also have to issue a significant amount of debt. Despite the significant share price fall, hedge funds clearly still think the stock will continue to decline and they’re loading up on short positions to profit from continued share price weakness.

As such, this is definitely a stock to avoid, in my view.

Arrow Global

The second most-shorted stock right now is Arrow Global (LSE: ARW). This is a credit management services provider engaged in the purchase, collection, and servicing of non-performing loans. Like Metro Bank, it has already experienced a substantial sell-off. Trading as high as 470p in mid-2017, the shares now change hands for around 190p.

Currently, around 11% of the shares in Arrow Global are being shorted, which is significant. It appears that hedge funds have concerns over the group’s transparency, balance sheet, and leverage ratio. Some funds have also argued that European debt collectors are overly optimistic about how much debt they will actually recover.

Despite the fact the shares are cheap, this is another stock to steer clear of, in my opinion.

Jupiter Fund Management

Finally, FTSE 250 fund management company Jupiter (LSE: JUP) comes in at number three on the list of most-shorted stocks. It currently has around 10% of its shares being shorted.

Jupiter seems to be a classic case of a company that is experiencing challenging conditions. With passive investing (ETFs) becoming more popular, many traditional active investment managers are struggling at the moment, and last year’s equity market sell-off has compounded problems. Just look at Jupiter’s FY2018 results – the company experienced £4.6bn of outflows for the year and profit before tax was down 7%. The dividend was also reduced by 13%.

Jupiter could turn things around at some point, and it’s worth noting that the new CEO has just bought a large parcel of shares. However, for now I’d avoid the stock. When a stock is being shorted heavily, often the best strategy is to give it a wide berth.

The post Warning: Metro Bank isn’t the only FTSE 250 stock that hedge funds expect to crash appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Edward Sheldon has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

On target

This will come as a welcome relief to investors after a dismal year which has seen the share price fall 54%, while the stock is also down as measured over five years. So is this just a relief bounce or does it point to an extended recovery?

Arrow’s management hailed a strong group operating and financial performance. Highlights included an 18.2% increase in core collections, driving a 28.8% increase in adjusted EBITDA, while underlying profit after tax increased 10.2% to £42.9m.

Bullseye!

The group also hit the mark with an underlying 33.4% return on equity over the last 12 months, while an improved underwriting performance increased to 104% of original forecast.

Arrow’s investment business also performed well with record organic portfolio acquisitions of £200m, up for £155m in Q3 2017, while third-party asset management and servicing business income increased 25.1% to £63.3m. Balance sheet management looks prudent.

All of a quiver

I wrote in August that Arrow has looked a tempting buy for some time, so I am pleased to see the stock flying true. The £393m company now offers a stunning forecast yield of 6.4%, with cover of 2.9. 

Earnings per share (EPS) growth has been strong since it joined the main market in 2013 and is expected to continue with 12% growth this calendar year and 22% in 2019. By then the yield is forecast to hit 7.9%. One warning: a recession could make collections harder, and City forecasters reckon operating margins will fall from 33.2% to 20.2%. However, trading at just 5.3 times forecast earnings, these worries look to me like they are in the price.

Power of 3i

You don’t find many companies trading on such a cheap valuation but I’ve just discovered one on the FTSE 100. Private equity and infrastructure specialists 3i Group (LSE: III) stands at just 5.7 times earnings, and even though this is forecast to rise slightly to 7 times that is still a pretty tempting discount.

The £8.4bn group, which focuses on northern Europe and North America, has seen its stock fall 9% in the past year, although it has still grown 127% over five years. It also offers a decent forecast yield of 3.7%, with cover of 3.9.

Cash is King

3i buys businesses with the aim of improving them and then selling them for a profit. As a result, profits vary depending on the timing of acquisitions and sales, although Q1 started well, with the group generating total cash of £868m, principally from the £835m million received from the sale of Scandlines in June, but with £535m reinvested.

Its balance sheet also looks solid, with net cash of £638m at June 30, before spending £213m on its full-year dividend in July.

As I wrote earlier, EPS are forecast to fall in the year to 31 March 2019, by 18%, then another 1% in the year after that, but that is the nature of the group. Both stocks are risky, but long-term investors may well reap the rewards.

The post Forget the cash ISA! These bargain dividend stocks are riskier but could be far more rewarding appeared first on The Twelfth Magpie.

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harveyj has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Taking aim

In May, Arrow reported a 19.6% increase in revenues to £77.1 for the three months to 31 March, due to increases in core collections and asset management income. Yet immediately afterwards its stock was hit by a bearish ‘sell’ note from Berenberg.

The broker noted that Arrow was founded shortly before the financial crisis, when it could pick up debt on the cheap, but margins have since narrowed. In 2013, it was able to recover £135,000 for every £100,000 of debt it bought, but that has slumped to £122,000.

Strange flight

This morning it published its interim results for the six months to 30 June and again, they look promising. Core collections rose 15.2% and adjusted EBITDA jumped 16.8%, while underlying profit after tax climbed 10% to £28.4m. Assets under management grew 29% to £49.3bn. The response? No visible impact on the share price. 

Investors are anxious about the future with operating margins forecast to fall from 33.2% to 21.2% and City scribblers also pencilling in an 11.4% drop in earnings per share (EPS) growth rates. EPS are still forecast to rise 15% this calendar year and 21% next, just at a slower pace than before.

These worries may be priced-in with the stock trading at a forecast valuation of just 6.9 times earnings. Today the board hiked its interim dividend by 25% and the forecast yield is 5%, with cover of 2.9. Arrow has looked like a tempting buy for some time, but make sure you know what you are aiming at before letting fly.

Wet sales

It’s not easy being an investor in brewery chain Greene King (LSE: GNK) either, which is down 28% over the past 12 months and 44% measured over five years. The pub sector is struggling as wallets are squeezed and people drink cheap booze at home, and although the group boasts a string of other interests, including Hungry Horse, Old English Inns and Wacky Warehouse, people are watching the pennies here as well.

Coincidentally, FTSE 250-listed Greene King has also been felled by Berenberg, which warned last month that it was a “value trap” due to poor underlying trading and profit is “likely to go backwards again”. Worryingly, it noted that the group pays £103m of dividends a year on free cash flow of just £50m-£60m.

Taking the pledge

That puts the forecast 7.1% yield in a different light, while cover of 1.9 has been made to look more favourable by its recent refinancing deal. Chief executive Rooney Anand has nonetheless pledged himself to the dividend, saying it can be funded without selling any pubs.

Summer trade was good thanks to the hot weather and England’s World Cup run, but that is history now. Earnings per share are forecast to grow just 1% a year in 2019 and 2020, giving little margin for error. Still, trading at a forecast 7.8 times earnings, many of these concerns are already in its bargain price.

The post Should you buy these 2 absurdly cheap dividend stocks yielding 5%+? appeared first on The Twelfth Magpie.

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harveyj has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Credit manager Arrow Global Growth (LSE: ARW) has enjoyed a blistering year, its share price rising more than 70% in the past 12 months. The company is well named, given this trajectory. The stock is up another 7% today, as its latest set of results hit the target once again. 

Bullseye!

Arrow Global, which has a market cap of £819m, is one of the UK’s largest buyers of consumer and SME debt, purchasing both secured and unsecured non-performing debt portfolios across the UK and mainland Europe. Today’s results for the six months to 30 June show the group fizzing along, with organic portfolio purchases up 30.3% to £125.1m, and revenue growth of 47.6%. It recently completed the acquisition of Zenith Service in Italy and agreed terms to acquire Mars Capital, expanding its UK secured servicing capabilities and entering the Irish market.

The Manchester-based firm has been supported by an 11.3% increase in core collections and an impressive 98.6% increase in asset management income year-on-year. Overall collections performance stands at 103% of original underwriting forecasts, showing the quality of the group’s data and analytics. It has also boosted the value of its back book by investing further in legal collection costs.

Hitting the mark

Underlying profit after tax rose 35.5% to £25.8m, with basic earnings per share (EPS) rising 35.8% to 14.8p. However, statutory profit after tax dipped from £16.5m to £3.7m year-on-year, primarily due to post-tax costs associated with its £22.1m refinancing in March. Group chief executive Lee Rochford hailed another period of strong, profitable growth. “Our returns-focused mindset continues to yield results with underlying return on equity increased to 32.8%. We are pleased to announce an interim dividend of 3.2p, up 18.5%.”

Arrow looks an attractive growth prospect, especially given its undemanding forward valuation of 13.6 times earnings. Its forecast yield of 2.5% is good when you take into account recent share price growth, and management policy is progressive. With dividend cover of 2.9, there is scope for plenty more double-digit hikes, generating further shareholder rewards. City analysts are pencilling in earnings per share (EPS) growth of 27% both in 2017 and 2018. Today’s update will reassure them that Arrow should continue to fly.

Take a bite

Online takeaway marketplace Just Eat (LSE: JE) has also hit the spot lately, its share price up 18% in the past six months, and 150% over three years. It now has more than 30,000 restaurants on its books and serves more than 14m customers, but there is little sign that its market is saturated. Just East operates in 13 countries and can always keep the profits flowing by moving into new territories.

Some have warned the trend towards healthier eating could hit the takeaway market but this doesn’t worry me, as a new generation of fast-food operators explores healthier options. Just Eat will inevitably slow from 2014’s heyday, when EPS growth hit a stunning 200%. City analysts forecast it will slow to ‘just’ 38% in 2017, and 37% in 2018. If that puts you off, you are fussier about your food than I am.

Just Eat’s current valuation looks high at 97.7 times earnings but is forecast to fall to 27.6 in 2018 as the revenues keep flowing. My takeaway? Arrow Global and Just Eat both hit the spot.

The post This under-the-radar growth stock has thrashed Just Eat plc appeared first on The Twelfth Magpie.

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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The emerging markets-focussed asset manager advised that funds under management leapt 17% to $4.7bn as of June 2017, up from $4bn a year earlier. In sterling terms, funds jumped to £3.6bn from £3bn at the same point in 2016.

City of London announced that the MSCI Emerging Markets TR Net Index rose by 24% in US dollar terms over the same period. The company reported negative net asset flows in Emerging Markets of $306m as clients rebalanced into the significant emerging market equity gains, while net asset flows were positive ($26m) in the Diversification strategies.

And the asset manager noted that net mandate wins of around $125m have been confirmed for early in the new financial year.

Rich returns?

Those seeking explosive earnings growth need to give City of London serious attention, at least if current broker forecasts are anything to go by.

It is expected to follow an anticipated 47% earnings rise in the year to June 2017 with a 10% bounce in fiscal 2018. And these projections make the business a brilliant bargain buy, in my opinion.

Not only does the company sport a mega-low forward P/E rating of 10.8 times, but a PEG rating of 1.1 rubber stamps City of London’s position as a great value pick.

There is also plenty for dividend hunters to celebrate. Analysts expect the business to lift an estimated 24.7p per share payout for the last year to 26.8p in the present period, resulting in a mammoth 6.6% yield.

But given that City of London is on course to beat this projection – the firm today vowed to pay a 25p per share total dividend for fiscal 2016 – this year’s estimate could also surprise to the upside.

And I believe City of London should continue to provide powerful earnings and dividend expansion in the years ahead as economic growth in so-called developing regions steams ahead.

Money master

Arrow Global Group (LSE: ARW) is another London stock that City forecasts suggest could be dealing much too cheaply.

The credit manager is expected to keep its long-running growth story trucking with bottom-line rises of 28% and 25% in 2017 and 2018, respectively. And these estimates make it a terrific value play – the company carries prospective P/E ratio of 13 times, and a PEG rating of just 0.5.

Arrow Global is expected to keep its programme of delivering chunky annual dividend growth rolling, too. Last year’s 9.1p per share dividend is predicted to improve to 11.3p in the present period, and again to 14.2p in 2018.

As a result Arrow Global’s yield jumps from 2.6% this year to a satisfying 3.3% in the next period.

The Manchester firm’s European expansion programme continues to pay off big time, with group revenues exploding 75% during January-March and underlying pre-tax profits rising 37%. And I reckon Arrow Global’s drive to boost its continental footprint, and to diversify its revenues, should create excellent shareholder rewards in the years ahead.

The post 2 value, growth and dividend shares that could make you rich appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes

Arrow Global Group (LSE: ARW) shares have more than doubled since July last year, ending a stagnation that has dogged the shares since flotation in October 2013.

The upwards re-rating was long overdue, in my opinion, as the debt purchaser and manager has been exhibiting impressive earnings growth, its dividend has been building up from a modest beginning, and the shares have never been on a stretching P/E multiple.

Successful expansion overseas (it now has operations in Portugal, the Netherlands, France and Italy) has probably been the trigger for the recent bull run, and impressive 2016 results will have added to the optimism after chief executive Lee Rochford described it as “a landmark year“.

Cracking growth

Revenue rose by an impressive 42.6%, with underlying earnings per share up 28.5%. Mr Rochford told us the firm is confident of delivering “high teens EPS growth and a progressive dividend policy… over the medium-term,” offering the best of both worlds — growth and income.

In fact, we’re looking at PEG ratios of only 0.4 for this year and next, when anything under 0.7 is usually seen as a key growth indicator, with the shares dropping to a P/E of under 10 on 2018 predictions.

On top of that, dividend hikes that are way ahead of inflation should take the well-covered yield to 3.8% by 2018 — and at this rate, it could be exceeding 5% almost before we know it.

The current year is off to a great start too, with first-quarter revenue up 45% over the same period last year, and underlying pre-tax profit up 37%. And organic purchases of £77.4m across the firm’s markets should hopefully set it up for continuing healthy profits.

I see strong growth potential coupled with rising dividends, from shares which, at 404p, look cheap.

Brexit effect?

The recruitment business might not seem a likely source of growth opportunities, but I’m liking Impellam (LSE: IPEL) right now. Specialising in upmarket appointments on short-term or permanent contracts, the company has been able to grow its earnings per share by 70% between 2013 and 2016, while boosting its dividend yield similarly over the same period.

The share price has easily kept up with that, more than doubling since the end of 2013, to 783p. But since last April’s peak, it’s fallen back a little overall, and that’s created what I see as a bargain P/E — forecasts for this year suggest a multiple of only 8.3, and that would drop even lower to 7.6 on 2018 predictions.

Dividend yields should be approaching 3% by then, with cover by earnings of more than 4.5 times, so that’s not remotely stretched. 

Strong year

The year just ended showed a 21% rise in EPS with the dividend up by the same margin, after revenues grew by 20%.

Some of that was due to acquisitions, which Impellam appears to be good at managing. It’s turning the company more outwards and increasingly global, from being essentially Europe-focused. The firm spoke of “significant progress in expanding the scale and breadth” of its operations in the US, Australia and the Middle East.

I see that move as good from a sentiment point of view as well as for the bottom line, as I can’t help thinking that Brexit worries must be weighing heavily on the shares’ low rating at the moment. I don’t know when any re-rating might come, but I can see a rewarding decade ahead for Impellam shareholders.

The post 2 storming growth stocks with exciting potential appeared first on The Twelfth Magpie.

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• With a 7% yield, is this dividend share a no-brainer?
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• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Arrow Global announced in November that total revenues leapt 37% during January-September, to £164.4m, a result that powered adjusted EBITDA 56% higher to £161.5m. The business is benefitting from the steady deleveraging drive by Europe’s banks, and is splashing the cash to expand its loan portfolio across the continent.

I reckon a similarly upbeat full-year statement (currently scheduled for Thursday, March 2) could prompt a fresh upswing in the share price, even though Arrow Global already provides exceptional bang for your buck.

Indeed, the City expects explosive earnings growth to propel an anticipated 9.2p per share dividend for 2016 to 11.6p this year, and to 13.8p in 2018. Consequently Arrow Global sports market-beating yields of 3.6% and 4.2% for these years.

Ad ace

Advertising giant WPP (LSE: WPP) is also due to provide its full-year results next month (scheduled for Friday, March 3). And like Arrow Global, I reckon the release could propel the stock to fresh record peaks.

The Martin Sorrell-steered vehicle saw group revenues race 23.4% higher during July-September, to £3.6bn, with like-for-like revenues advancing 3.2% in the period.

WPP continues to plough vast sums into building its global network, but this is not the only reason to expect the top line to keep rising as the business benefits from sterling’s decline, a situation that is likely to persist as tense Brexit negotiations continue.

And promisingly, WPP continues to see sales striding across all its regions and business segments, a critical quality for those seeking reliable earnings — and thus dividend growth — in the years ahead. Furthermore, rapidly-expanding cash levels at the company should also give dividends a hearty shove.

Consequently the City expects a predicted dividend of 55.4p per share for last year to rise to 63.8p in 2017 and to 70.6p in 2018. This blasts the yield from a decent 3.4% in the current period to a much better 3.7% next year.

Lab lovely

While GlaxoSmithKline (LSE: GSK) is not due to update the market next month, I reckon the medicine mammoth’s ultra-low valuations could prompt a share price re-rating in the weeks ahead, particularly if buying into safe-haven stocks picks up again.

And GlaxoSmithKline is a particularly attractive value stock when you look at its dividend prospects. The City certainly expects the pharma ace to keep making good on its pledged payout of 80p per share through to the end of this year, resulting in a monster 5.1% yield.

But this is not the only good news as forecasts suggest the reward could even leap as high as 80.6p next year, keeping the yield running at the same market-mashing levels.

And there is good reason to expect dividends to keep marching higher as new product sales take off — GlaxoSmithKline saw new product sales of £1.4bn during October-December, taking the total for 2016 to a whopping £4.5bn. I believe the Brentford company’s exciting pipeline should underpin robust shareholder returns long into the future.

The post 3 hot dividend stocks I’d buy in March appeared first on The Twelfth Magpie.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Tech treat

Thanks to its expertise across many tech areas, I reckon E2V Technologies (LSE: E2V) is in great shape to keep its earnings chugging higher in the near term and beyond. While the company still faces challenging conditions in some of its markets, E2V Technologies is bolstering its investment in core areas like semiconductor design to mitigate these problems and to win market share.

The City expects earnings at the company to nudge marginally higher in the year to March 2016 before gaining traction thereafter — good growth of 9% and 8% is chalked in for 2017 and 2018, respectively. Consequently E2V Technologies sports very attractive P/E ratings of 14.2 times and 13.4 times for these years.

Driving higher

I believe industrial chemicals maker Carclo (LSE: CAR) should also continue to print excellent profits growth as demand from the car sector explodes. The firm’s LED Technologies division builds lighting units for use in automobiles, and is rapidly expanding across Asia and the US to harness galloping demand for its products.

And helped by a steady stream of new product rollouts, the Square Mile expects Carclo to follow a 19% earnings explosion in the period to March 2016 with an even better 21% advance in both 2017 and 2018. I believe subsequent earnings multiples of 11.6 times and 9.6 times make Carclo a steal given the company’s rocketing momentum.

A financial favourite

Financial firm Arrow Global Group (LSE: ARW) — which buys and manages customer accounts from financial institutions — should also continue to enjoy strong earnings growth, in my opinion. The company is steadily diversifying across asset classes to provide its earnings outlook with that little bit of extra security. Meanwhile, acquisitions like that of Belgium’s InVesting BV for £78.5m this month are expanding Arrow Global’s exposure to lucrative foreign markets.

The number crunchers expect the business to follow last year’s 18% bottom-line leap with a 33% bounce in 2016, resulting in an ultra-low P/E readout of 10 times. And the multiple slips to just 8.3 times for next year thanks to predictions of an extra 21% earnings rise.

Bolts beauty

Industrial fastenings manufacturer Trifast (LSE: TRI) has a terrific record of delivering earnings growth year after year. The company’s wide product range makes it a favourite for blue-chip goods manufacturers the world over, and its bolts and screws can be found in everything from fridges and mobile phones to automobiles.

And surging demand for consumer goods should keep sales at Trifast trekking higher, in my opinion. Indeed, the City has forecast a 3% earnings advance in the year to March 2016, and 6% rises are estimated for both 2017 and 2018. I reckon subsequent P/E ratings of 13 times for this year and 12.3 times for 2017 represent terrific value for money.

The post Buckle Up! 4 ‘Hidden’ Growth Heroes Too Good To Miss appeared first on The Twelfth Magpie.

More reading

• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?

Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.