The good news is there are other ways of benefiting from the growth and income opportunities available from the UK property market. Better still, you can invest free of tax, via your Stocks and Shares ISA allowance.

Bellway

UK housebuilders were hit particularly hard by the EU referendum result. House price growth has slowed, but there has been no sell-off, and while London has been slowing, other regions have compensated by playing catch-up.

FTSE 250 listed developer Bellway (LSE: BWY) builds traditional family housing across the UK, and apartments within outer London boroughs, giving it a good geographical spread. Its share price is trading 85% higher than five years ago, helped by recent positive results, which saw house completions climb 5% to hit a record 10,892, with profit before tax up 3.4% to £662.6m.

The £4bn group has a strong balance sheet with net cash of £201.2m, which also gives it capacity for future investment. Yet at the same time, it has a wide safety margin, trading at just 7.1 times forward earnings, while offering a forecast yield of 4.5%, covered 3.1 times.

Demand for property has been underpinned by the Help to Buy equity loan scheme, and could take a knock when that is limited to first-time buyers in 2021, then ends altogether in 2023. Brexit and the election also create some uncertainty but you could say that about almost every stock right now.

Derwent London

Alternatively, you could invest in commercial property instead, through the shares of Derwent London (LSE: DLN), which targets niche urban areas within central London. This £4bn FTSE 250-listed real estate investment trust (REIT) owns and runs an investment portfolio of 5.7m sq ft, of which 98% is located right in the centre of the capital, specifically the West End and the areas bordering the City of London.

It is well placed to benefit from the arrival of Crossrail with over 70% of its buildings within 800 metres of a station on the forthcoming route, and it has also shrugged off the slowdown in London’s property market and Brexit concerns. Earlier this month, it reported a 46% jump in lettings to £33.5m, and a drop in the vacancy rate down to 0.6%.

London is still a massive global draw and Derwent should benefit if we get some kind of Brexit resolution, and international money flows back into the country. Its share price is up more than 20% in the last three months and this could be a good way to play returning confidence.

The loan-to-value (LTV) ratio on its properties was just 16.4% at the end of September, and it has now increased its annual dividend for 26 consecutive years. It is currently trading on a low price-to-book value, while the share price trades at a discount of 8.33% compared to net asset value. Derwent London looks a strong long-term buy-and-hold, particularly for income seekers.

The post Don’t bother with buy-to-let. I reckon these two FTSE 250 stocks are a better way of investing in property 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.

With that in mind, here are two FTSE 250 stocks that could have bright futures as a result of their low valuations, dividend growth potential and strategies.

Dunelm

Home furnishings retailer Dunelm (LSE: DNLM) released a positive trading update on Thursday that sent its share price around 5% higher. The company’s performance over the last couple of months has been better than expected, with like-for-like sales growth being strong.

As a result, the company now expects pre-tax profit for the full year to be between £124m and £126m. This equates to an upgrade versus previous expectations, and would represent significant growth versus the prior year’s £102m.

Looking ahead, Dunelm faces an uncertain set of operating conditions. Consumer sentiment could come under pressure depending on how Brexit progresses. However, with wage growth ahead of inflation, its income investing prospects could continue to improve.

With the company having a dividend coverage ratio of 1.6, its potential to grow dividends seems high. Although it yields just 2.8% at the present time, a rapidly-rising bottom line may mean it’s able to increase shareholder payouts at a fast pace.

Since the stock trades on a price-to-earnings growth (PEG) ratio of around 1.8, it seems to offer fair value for money given its long-term growth prospects under an increasingly online-focused strategy.

Bellway

The prospects for housebuilders such as Bellway (LSE: BWY) may also be somewhat uncertain at present. Sentiment towards the housing market is mixed, with some regions of the UK experiencing growth and others facing more challenging outlooks.

Bellway’s financial prospects, though, appear to be sound. The company is forecast to post a rise in net profit of 5% in the current year, with demand for new homes likely to remain robust as a result of the Help to Buy scheme.

Despite this, the company’s shares trade on a price-to-earnings (P/E) ratio of just 6. This suggests they offer a wide margin of safety, and may deliver significant capital growth over the long run.

With the stock having a dividend yield of 5.4% from a shareholder payout that’s covered three times by net profit, the income investing potential of the business seems to be high relative to many of its index peers.

Although there may be more resilient and popular shares available within the FTSE 250, Bellway seems to offer a mix of income and value investing potential that could lead to impressive total returns relative to the index over the long run.

The post Have £1,000 to invest? I’d buy these 2 FTSE 250 dividend growth stocks today appeared first on The Twelfth Magpie.

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Peter Stephens 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.

According to is its earnings release, profit before tax declined by 11% to £64.4m in the six months ended 30 April, even though revenue increased 7% to £501.9m.

Falling property prices have hit Crest in London where its focus has been for the past decade. To work around the property slowdown in the capital, management has tilted the business towards partnerships and joint ventures. While hitting profitability, the move de-risks the group’s balance sheet by ensuring a set number of homes will be sold before completion.

Surrendering some of the profit on each sale as part of these agreements also means the firm’s operating profit margin decreased 2.7% during the first half.

A worthwhile trade-off

In my view, this is a worthwhile trade-off. Giving up some profit in return for guaranteed sales might not be good for profit margins in the short term, but over the long term, the deals should help the business ride out the peaks and troughs of the cyclical property market.

On top of this, Crest is well financed and highly profitable. Management believes the group will have a net cash balance after payment of dividends to investors at the end of its 2019 financial year.

All of the above leads me to conclude that Crest’s dividend is here to stay for the foreseeable future. With the stock currently yielding 9.2%, it looks to me to be one of the best income plays in the FTSE 250 right now. If you’re looking to build a second income from dividend shares, this company should be on your watchlist.

Booming demand

Another investment I think you should consider if you are looking to build a second income with dividend stocks is Bellway (LSE: BWY).

Like Crest, Bellway is benefiting from the chronic housing shortage in the UK. The group has seen an increase in sale reservations of 4.7% year-on-year to 244 per week, up from 233 a week in the same period last year. The number of people cancelling reservations has also declined, falling to 12% between August and February 2019, from 13% in March last year.

Off the back of these market trends, in a trading update published today, management confirmed it’s on track to hit growth forecasts for 2019. For its part, the City is expecting the group to report earnings per share of 438p on a net profit of £537m. If Bellway achieves these targets, then the stock is currently dealing at a bargain basement forward P/E of just 6.5. On top of this, the shares support a dividend yield of 5.2%, and the distribution is covered nearly three times by earnings per share.

Once again, these metrics give me the confidence to say I believe you should consider Bellway as an investment if you’re looking to build a second income stream with dividends.

The post Two FTSE 250 income stocks yielding 5%+ I’d buy for a second income appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

Clearly, there could be uncertainty ahead for the index. It is more dependent on the UK economy than the international growth outlook, which could mean that Brexit continues to weigh on investor sentiment.

In the long run, though, a number of mid-cap stocks could have impressive income outlooks. Here are two prime examples that also appear to offer wide margins of safety.

Travis Perkins

The first quarter update released by Travis Perkins (LSE: TPK) showed strong performance in difficult operating conditions. The company’s like-for-like sales growth was 7.3%, while its total sales increased by 5.4%. Its focus on customer service, coupled with a weak comparator from the previous year, boosted its financial performance.

The company’s online consumer brand, Toolstation, performed well. Its sales growth of 25% was the standout performer of the business, while its Merchanting sales growth of 10.6% was also impressive. Wickes has also experienced relatively high demand, with its core DIY and showroom categories boosting its overall sales growth to 10.5%.

Travis Perkins currently trades on a price-to-earnings (P/E) ratio of 13.5. Its bottom line is expected to grow by 5% this year, which would be a strong performance given the challenging operating conditions that it faces. With a dividend yield of 3.2% from a payout that is covered 2.3 times by profit, an improving income outlook could be ahead. As such, now could be the right time to buy a slice of the company.

Bellway

Also facing an uncertain operating outlook is FTSE 250 housebuilder Bellway (LSE: BWY). The housebuilding sector has been volatile in the last couple of years, with underlying growth being strong but investor sentiment being highly changeable.

Bellway is expected to post earnings growth of 5% in the current year. This would be an impressive result at a time when house prices in a number of regions are under pressure, and consumer confidence is at a low ebb.

The company, of course, is being buoyed by low interest rates and the Help to Buy scheme. Both of these catalysts are expected to remain in place over the medium term, and may offset wider fears surrounding the prospects for the housing market as Brexit moves ahead.

With the stock having a dividend yield of 4.8% from a payout that is covered over three times by profit, it appears to have a bright income investing outlook. Its P/E ratio of 7 is relatively low – even for the housebuilding sector. Therefore, investors who are able to take a long-term view may be able to generate high income returns, as well as capital growth.

The post 2 cheap FTSE 250 dividend stocks I’d buy for my Stocks and Shares ISA today appeared first on The Twelfth Magpie.

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Peter Stephens 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.

Niche manager

This company has carved out a niche for itself in the asset management business over the past 20 years managing sustainable funds, a rapidly expanding part of the market.

At the end of the first quarter, the company reported an increase in assets under management of 21% year-on-year to £12.7bn, with net inflows for the financial year to the end of March totalling £1.8bn. Considering the fact that the rest of the active asset management industry is struggling to attract assets away from passive fund managers such as Vanguard, these impressive fund flows stand testament to Liontrust’s investment proposition.

As the business has expanded, investors have been well rewarded. The stock has risen five-fold since 2012 as net profit has jumped from a loss of £4m to profit of £25m (estimated for 2019). At the same time, Liontrust’s per share dividend has risen from 1p to 21p and analysts are expecting this trend to continue, with dividend growth of 15% pencilled in for 2019, and 11% for 2020, giving the stock a 2020 dividend yield of 4%.

Supply vs demand

Another firm that I think you should consider for your income portfolio today is homebuilder Bellway (LSE: BWY). With a dividend yield of 5% at the time of writing, this company immediately stands out as a dividend champion. What’s more, the payout is covered three times by earnings per share, and the enterprise has a zero debt, cash-rich balance sheet, which only adds to its appeal in my view.

The UK is facing a chronic housing shortage, and homebuilders like Bellway are struggling to match demand. It is unlikely this supply/demand mismatch will end any time soon and, as a result, I think it is highly likely that homebuilders will continue to churn out impressive profits for the foreseeable future.

I think Bellway is one of the best investments to play this trend because, not only does the stock support a dividend yield of 5%, it is also trading at a deeply discounted valuation of just seven times forward earnings compared to the sector average of 10.5. This valuation gap tells me investors could see both impressive dividends and capital gains in the years ahead. What’s not to like?

Market leader

The final dividend king that I think is worth buying and holding forever is M&C Saatchi (LSE: SAA).

The best investments tend to have a strong brand and durable competitive advantages, and Saatchi is one of the most influential brands in the marketing world. This year, analysts are forecasting a 144% increase in earnings to 22p, which puts the stock on a forward P/E of 17. Earnings per share could expand a further 5% next year according to current City estimates, leaving the stock trading at a 2020 P/E of 16.1.

Saatchi stands out when it comes to the company’s dividend. Over the past five years, the dividend has grown at an average annual rate of 15% and has doubled since 2018. Right now the shares support a dividend yield of 3.2%, and the distribution is covered 1.9 times by earnings per share. According to these numbers, if the payout continues to grow as it has done during the past five years, investors buying today can look forward to a dividend yield of 6.4% by 2024.

The post 3 top dividend kings I’d buy and hold forever appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Liontrust Asset Management. 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.

In my opinion they are some of the most attractive shares out there. Brilliant value, big dividend yields, and because Britain still isn’t building homes at the rate it needs, firms which carry a very impressive, long-term growth outlook.

Take Bellway (LSE: BWY), for example. Tough conditions in the broader housing market mean that the breathtaking annual earnings rises of recent years are predicted, by City analysts at least, to come to a skidding halt — the bottom line is expected to swell 4% in both 2019 and 2020. I don’t consider this to be a negative. In fact, given that Brexit means that the housing market is at its weakest for more than a decade, I reckon these projections are testament to the FTSE 250 firm’s splendid defensive qualities.

Great numbers

Bellway’s brilliant resilience was again revealed in half-year results unpacked this week. It saw revenues rising more than 12% in the six months to January, to £1.49bn, a result that drove propelled pre-tax profit almost 9% higher to £313.9m.

The Newcastle business booked completions of 5,007 homes in the period, up from 4,741 a year earlier, though higher volumes were not the whole story. Whilst home price growth is dragging in many parts of the country, this is not so in the territories in which Bellway operates with the average selling price of the firm’s new-builds rising 7% year-on-year to £293,832.

Chief executive Jason Honeyman was quick to laud the “positive” state of the UK new-build market, and in particular celebrated the “high employment, good access to affordable mortgage finance and the continued availability of Help to Buy” that continues to support buyer demand.

And why wouldn’t he be so upbeat? Sales at Bellway are going from strength to strength, and in the six weeks since February 1, it booked 259 reservations per week, up from 248 in the corresponding period last year. It’s no surprise that the business is taking steps to ramp up build rates, with up to 500 extra new-builds scheduled to be put up in fiscal 2019, for instance.

An undervalued dividend hero

Bellway’s share price may have bumped higher following the release, but not by much, showing that it continues to be underestimated by the market (at least in my humble opinion).

It’s one of many housebuilders that continue to thrive and release upbeat trading releases time and again, showing that the new homes sector remains solid despite ongoing fears over Brexit. This robustness isn’t reflected in the company’s dirt-cheap forward P/E ratio of 7 times, in my opinion. I consider Bellway to be a share whose profits can continue to soar higher well into the next decade at least, given the length of time it’ll likely take for the UK’s home shortage to be resolved. And for this reason, I think it’s worthy of last-minute inclusion in your Stocks and Shares ISA.

One final thing: predictions of further profits growth mean that dividends are expecting to keep rising, too. And this means yields for this year and next sit at a huge 4.8% and 5% respectively.

The post ISA alert! A 5%-yielding FTSE 250 stock I’d buy with my last £2k (and never sell) 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.

The problem is that with the help of ultra-low interest rates, a huge amount of money has flowed into housing since the financial crisis. This has pushed up house prices, adding to the rising costs faced by landlords.

In my view, it makes more sense to gain exposure to the housing market through dividend stocks held in a tax-free Stocks and Shares ISA. Today I’m going to take a look at two companies that are on my radar at the moment.

#1 – profit from plumbing

FTSE 100 firm Ferguson (LSE: FERG) was previously known as Wolseley. The plumbing, heating and building material supplier’s name change was part of a shift towards the US market, which now generates more than 90% of profits.

Ferguson shares have fallen by about 25% over the last six months, as investors have started to worry about the risk of a slowdown in the US housing market. But these fears are starting to look overdone to me.

The group’s latest accounts show that sales rose by 8.2% to $10,847m during the six months to 31 January, while underlying operating profit rose by 7.7% to $744m.

Even if housebuilding activity does slow, I’ve seen nothing to suggest that we’re heading for a repeat of the 2008/09 crash. What seems more likely is a modest slowdown. If that happens, I don’t think Ferguson shareholders need to worry too much.

The group’s debt levels look comfortable to me and the shares seem increasingly affordable, trading on 12 times 2019 forecast earnings, with a 3.3% dividend yield. For long-term investors, I think this could be a good time to start buying.

#2 – a top UK housebuilder

When writing about housebuilders, it’s easy to focus on eye-catching figures like dividend yield and cash balances. But what about the quality of the houses built by each company?

Some recent news has made me think more about this. Last week, FTSE 100 builder Persimmon said that it would allow buyers’ solicitors to hold back 1.5% of the purchase price of each new home until any faults had been rectified.

Why is this necessary? I can only guess that lots of Persimmon homes may be poorly finished. Indeed, looking at the latest Home Builders Federation ratings, I see that the firm only managed a three-star rating in the latest customer survey.

Persimmon currently boasts a 29% operating profit margin, one of the highest in the sector. But its customers appear to have mixed feelings about the quality of their homes.

In contrast, FTSE 250 firm Bellway (LSE: BWY) recently received a five-star HBF rating for the third consecutive year. Bellway’s operating margin is lower, at 22%, but its customers appear to be very happy with their new homes.

How should this affect us as investors? I feel that over the longer term, Bellway’s focus on build quality and customer satisfaction might be good news for anyone committing their investment cash to the firm.

Although the group’s 2019 forecast dividend yield of 5% is lower than some rivals, broker forecasts suggest it should be covered nearly three times by earnings this year. That means that even if earnings slow after Brexit, Bellway’s dividend should remain affordable. I’d rate the shares as a buy.

The post Forget buy-to-let. I’d put my money into this FTSE 100 dividend stock appeared first on The Twelfth Magpie.

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Roland Head 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.

Ring the bells

The recovery in investor appetite that’s been pushing the housebuilders higher in 2019 may have pushed Bellway’s (LSE: BWY) share price 14% higher since the bells rang in New Year’s Day, but I would consider the business to still be grossly undervalued by the market.

A forward P/E ratio of 6.4 times is dirt-cheap on paper and is at odds with the resilience of the business in the toughest conditions that the industry has faced for decades. Indeed, just this month Bellway announced that revenues swept 12% higher in the six months to February, led by a rise in both completion numbers and average selling prices (by 5.6% and 6.5% respectively) in the period.

City analysts believe the FTSE 250 firm has what it takes to keep growing earnings over the next couple of years and are thus predicting additional annual dividend growth for this period, to 147.7p per share for fiscal 2019 and 154.5p for next year. These projections yield a mammoth 5.2% and 5.4%.

Georgia on my mind

Georgia Healthcare Group (LSE: GHG) doesn’t carry the same sort of yields as Bellway but, if you’re seeking brilliant dividend growth in the years ahead, it’s a share that’s certainly worth your consideration.

City analysts expect the small-cap to pay a maiden dividend of 1.5p per share in 2019, resulting in a yield of just 0.7%. But the payout is expected to explode to 2.7p next year and this pushes the yield to 1.2%.

Financials released this month showed EBITDA up 23% in 2018, a figure that underlines just why the number crunchers are confident of scintillating dividend growth over the medium term. The firm certainly can’t be considered a flash in the pan as its expanding, integrated healthcare offering addresses the needs of an increasingly-wealthy Georgian populace.

It’s no shock that Georgia Healthcare Group is expected to report a 57% earnings explosion this year alone. And this also leaves it dealing on a sub-1 forward PEG reading of 0.3.

Fizzing dividend growth

If you’re seeking the perfect blend of dividend growth and big yields today then Britvic (LSE: BVIC) is a great share to stock up on.

It’s grown total payouts at a compound annual growth rate of around 9% over the past five fiscal years, underpinned by a sustained record of profits growth, and latest financials suggest to me that it has plenty left in the tank. According to the Fruit Shoot and Robinsons manufacturer, organic revenues (excluding the sugar tax) still rose 1.5% in the three months to December, illustrating the enduring popularity of its labels in even tough times like these.

A prospective P/E ratio of 15.6 times is quite undemanding given Britvic’s great growth record, in my opinion, and City predictions that earnings should keep expanding through the next couple of years at least. And predicted dividends of 29.5p and 31.4p per share for fiscal 2019 and 2020 respectively, figures that yield 3.2% and 3.4%, rubber-stamp the company as a sweet treat to buy today.

The post Have £1k to spend? 3 dividend stocks I believe are absurdly cheap right now appeared first on The Twelfth Magpie.

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• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Britvic. 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.

Of course, it’s not the only stock that could offer an impressive income return. Reporting on Thursday was a FTSE 250 dividend share which may offer a growing level of income over the medium term.

Growth potential

The company in question is housebuilder Bellway (LSE: BWY). Its trading update showed that demand has continued to be robust in the first six months of its financial year, with revenue expected to be 12% ahead of the same period of the prior year at £1.5bn. Volume growth of 5.6% was a factor in rising sales, while the average selling price of £293,800 was 6.5% higher than in the comparable period.

While there are concerns surrounding the prospects for the UK economy, the company delivered a record sales performance in the first six months of the year. Its weekly reservation rate increased by 2.8% to 183, which is its highest-ever level in a first-half trading period.

With a dividend yield of 5.1%, Bellway has a relatively high income return. Its dividends are covered three times by net profit, which suggests that it could raise shareholder payouts without hurting its financial standing. Since it has a modest net debt of £26.6m, its long-term future appears to be robust. As such, it could offer income investing potential.

Income appeal

As mentioned, HSBC’s dividend yield is ahead of the FTSE 100. One reason for this is the disappointing share price performance recorded by the global bank in the last year. It has fallen by 11% during that time, while the FTSE 100 is flat. With the company having decided to focus a larger proportion of its capital on Asia, continued fears about the prospects for China’s economy may have contributed to investor unease regarding the company’s future.

Those concerns may remain in place during the course of 2019. The world economy faces an uncertain period which could include further protectionist policies from the US and China, as well as a negative impact from a rising US interest rate.

HSBC’s share price, though, appears to include a margin of safety. The stock has a price-to-earnings (P/E) ratio of around 11. With its bottom line due to rise by 5% this year, it appears to have a sound near-term outlook. And since dividends are covered 1.5 times by profit, there seems to be sufficient headroom when making payments to shareholders to provide a resilient income outlook. As such, the stock could deliver impressive income returns over the long run, and now may prove to be an opportune moment to buy it.

The post Have £1k to invest for a second income? I’d buy FTSE 100 dividend stock HSBC today appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of HSBC Holdings. The Motley Fool UK has recommended HSBC Holdings. 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 business of developing medicines for livestock and companion animals is becoming an ever-more lucrative one, and Dechra’s latest set of financials underlined the exceptional profits potential here. Net revenues leapt 18% between July and December at constant currencies, the FTSE 250 firm advised, the strength of its drugs pipeline helping sales to grow beyond the broader market, too.

What’s more, Dechra continues to build its pipeline (as well as its global footprint) to keep the top line roaring higher through shrewd M&A action. In December, it snapped up Brazilian pharmaceuticals giant Venco, a major player in the country’s gigantic food animal product market.

It’s not surprising, then, that City analysts expect earnings to rattle 13% higher in the year to June 2019, and by an extra 15% the following year. In my opinion, the company’s exceptional growth record and market-leading product stable makes it worthy of a high forward P/E ratio of 26.7 times.

Ring the bells

A more attractive pick for cash-strapped investors may be Bellway (LSE: BWY), though, the house-builder dealing on a bargain-basement prospective P/E multiple of just 6.7 times.

Don’t, however, take this low valuation as a sign of weakness. Sure, the stratospheric property price growth may be behind us, something which brokers believe will slow profits expansion at the builder to 2% in the years to July 2019 and 2020.

But the robustness of the UK housing market, supported by increasingly-generous mortgage packages and an inadequate number of new homesteads entering the market, means that Bellway should keep its long-running growth record motoring along nicely. Just this week, Lloyds unveiled its 100% mortgage product, for example, requiring no deposit at all from borrowers in the latest leg of the ongoing ‘mortgage deal wars’.

Continental colossus

B&M European Value Retail (LSE: BME) is another great growth share that I’m tipping to thrive over the next decade.

The cut-price retailers may not have had the best of it in November as sales slowed, but this proved to be a temporary problem, B&M advising this month that it enjoyed a “pleasing finish” in the three months to December. This doesn’t shock me in the slightest as you’d expect its value products to fly off the shelves in tough times for shoppers such as these.

That said, as the rampant influence of Aldi and Lidl on the global stage has already shown, consumers, both in the UK and beyond, have become increasingly accustomed to squeezing every last ounce of value out of their shopping trips. And by expanding across its home territory, as well as in Germany, B&M is positioning itself to exploit this phenomenon across the continent.

City analysts expect the firm to follow a predicted 3% earnings rise in the year ending March, with an even-better 15% increase in fiscal 2020. A forward P/E ratio of 16.5 times is, in my opinion, an attractive valuation, given the prospect of brilliant earnings growth at B&M in the medium term and most probably well into the 2020s.

The post Want to get rich? 3 FTSE 250 growth stocks that I’d buy and hold for the next 10 years 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 owns shares of B&M European Value. The Motley Fool UK has recommended Lloyds Banking Group. 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.