Many of us will be using a Cash ISA for this purpose. The fact that these accounts pay interest way below inflation, however, means it’s vital not to leave any surplus funds in there — that is, anything beyond roughly six months of living expenses.

As such, here are three resilient companies I’d consider buying for my portfolio with what’s left over. 

Recession-proof

People will always need medicine, regardless of what the economy is doing. As such, my first port of call is the pharmaceutical industry and, more specifically, GlaxoSmithKline (LSE: GSK). 

Despite the fact that it’s not been increased since 2014, one of the biggest attractions to Glaxo, aside from its defensive qualities, is its dividend. The 80p per share total payout for the current financial year means a yield of almost 4.8%. Perhaps most importantly, the extent to which this cash return is covered by profits is starting to look more stable after a rocky few years. 

Unsurprisingly given the Brexit stand-off, Glaxo’s shares have been steadily growing in popularity, rising 11% since the beginning of 2019. Assuming analysts are correct in their predictions, the shares currently change hands for just over 14 times earnings — far below FTSE 100 peer Astrazeneca’s frothy-looking P/E of 24. 

Another stock that should hold its own in the aftermath of Brexit, if it happens at all, is waste management and recycling firm Biffa (LSE: BIFF).

Last week’s trading update was as no-nonsense as you can get with the company stating that trading over H1 had been in line with management expectations with no change to the outlook for the full year. 

Of course, a business like this will never generate the same level of excitement as your average tech company. On a little less than 10 times earnings, however, I’m tempted to say that Biffa looks cheap.

At its current price, the forecast dividend yield sits close to 3.6% and is easily covered by earnings. There’s quite a bit of debt on the balance sheet (something I usually steer clear of), but the predictability of its line of work arguably makes this less of a red flag.

My last pick is a retailer. That might sound strange considering that consumer confidence is usually battered during economic wobbles, but stick with me.

Here I’m talking about discount retailers — the sort that offer people the most bang for their buck. FTSE 250 member B&M European Value (LSE: BME) is the standout candidate here, especially when recent trading is considered.

In late July, the company stated that it had made a “solid start” to FY20 with group revenue climbing 21.4% over Q1 (31 March-29 June). In sharp contrast to high street peers, 12 new stores were opened over the period with lots more planned over the entire year.

This optimistic outlook goes some way to explaining why B&M’s shares trade on almost 18 times forecast earnings. The 2.4% yield is also the lowest of the three in focus today (although it’s been hiked by double-digits in three of the last four years). With signs that consumers are continuing to tighten the purse strings, however, I think this is still a reasonable price to pay. 

The post Never mind the Cash ISA. I think these stock market stalwarts will help you beat a recession appeared first on The Twelfth Magpie.

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• Not sure what a SIPP is? 3 reasons it could pay to know!
• Up 15%, B&M shares are leading the FTSE 250 higher! Is the comeback on?

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK owns shares of B&M European Value. 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.

Just look a few hundred miles eastwards from London though, and there’s a major crisis brewing which also poses a huge threat to the global economy. I’m speaking of the sharp economic slowdown in the continental engine room of Germany and the threat of contagion across the whole of Europe.

Unemployment is rising for the first time since 2013, industrial production is sinking at the fastest rate for four years, and the much-respected Ifo business confidence survey has sunk to levels not seen for almost a decade. There’s clearly a lot for market makers to chew over.

British bulldog

Particularly galling for B&M European Value Retail (LSE: BME) is the impact tough conditions in the Teutonic territory are having on shopper appetite, of course. Official data showed retail sales in the country sank 2% in April, while the latest GfK consumer confidence gauge slumped to 10.1 in May, the worst reading since March 2017.

B&M operates almost 100 stores in Germany, predominantly under the Jawoll brand, and has been no stranger to troubles in this foreign region. Indeed, in the last fiscal year, it swung to a £10.2m EBITDA loss, from a £5.6m profit the year before, reflecting the need to clear out obsolete product ranges and to source more product through the supply chain.

The retailer still has a long way to go to mend its German operations, a turnaround story made all the more difficult by the tough conditions on the high street there. I’m confident, though, that B&M can continue to deliver solid profits growth at group level despite these issues, paying testament to the ongoing progress at its UK divisions.

German expansion goes on

Primark, the retail clothing division of Associated British Foods (LSE: ABF), has also been in some turmoil because of the tough economic conditions in Germany.

Sure, the cost of its clothing may be mega cheap like the wares over at B&M, but this hasn’t been enough to stop sales from falling more recently. So tough have conditions been in Primark’s Central European territory that it’s taken steps to refresh management there as well as reduce selling space at a number of its stores.

Largely speaking though, ABF is confident enough in Primark’s long-term outlook that it’s opened stores in Berlin and Wuppertal since the start of the fiscal year, and is planning to cut the ribbon on a new unit in Bonn in the next few months.

International expansion has proven to be the cornerstone to ABF’s great Primark growth story in recent years. And with the business not slowing on this front, I expect it to keep impressing on the revenues front, despite problems in individual markets like Germany.

Primark has also proven to be an undisputed success story in the UK, showing the Footsie firm knows what it takes to thrive in an increasingly competitive marketplace during tough times for the average shopper.

I fully expect the steps it’s taking to bolster its global footprint will deliver exceptional profits growth in the years ahead.

The post Achtung babies! 2 stocks (like this FTSE 100 firm) I’d still buy despite Germany’s economic slowdown appeared first on The Twelfth Magpie.

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• Not sure what a SIPP is? 3 reasons it could pay to know!
• Up 15%, B&M shares are leading the FTSE 250 higher! Is the comeback on?

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 Associated British Foods. 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.

We’re five months away from the current Brexit date of October 31 and a number of seismic scenarios remain very much in play. A leadership contest to find a new prime minister; fresh negotiations with the European Union on the terms of withdrawal; another Article 50 delay; a second referendum, or even a general election…

Particularly concerning for many investors, though, is the possible replacement of premier May with someone taking a harder line towards the European Union, an individual who may be prepared to pull the UK out of the continental trading bloc under no deal conditions.

Profits powering higher

I recently explained why utilities business SSE, despite the classically-defensive nature of its operations, may not in fact be a lifeboat in uncertain times like these. I believe that B&M European Value Retail (LSE: BME) might be a better investment as an economically-destructive Brexit looms over the UK.

While the rest of the UK retail sector is suffering from crimped consumer spending power and waning investor confidence, this FTSE 250 retailer is shrugging off these troubles thanks to the low cost of its colossal range of products. Sure, like-for-like revenues in its core UK marketplace may have clocked in at just 0.7% in the 12 months to March, but any sort of growth in the current climate is to be commended in this environment.

Besides, thanks to B&M’s efforts to expand its store network, profits are growing at a brilliant pace. Pre-tax profit rose 8.7% in fiscal 2019 to £249.4m, helped by a 17.1% improvement in headline revenues, and plans to deliver 50 new own-brand fascia stores in the current year — up from 44 last year — bodes well for the bottom line from this year onwards, too.

A lifeboat in troubled times

The rate at which both profits and cash are growing (cash generated from operations rose to £259.4m last year) means that B&M has remained a generous dividend grower, the firm upping the full-year payout for the period just passed by almost 6% to 7.6p per share.

It’s probably not a surprise to anyone that City analysts are expecting more chunky payout growth for the foreseeable future too. Payouts of 9.2p and 10.6p per share are estimated for this year and next, respectively, figures that yield a chunky 2.5% and 2.9%.

Of course there’s bigger near-term yields to be found, but in the context of Brexit not all of them are in good shape to keep growing profits and dividends like B&M.

If you’re fearful about how European Union withdrawal will affect your portfolio I believe this retail star is a great way to protect your wealth.

The post A FTSE 250 dividend growth stock I’d buy as a no deal Brexit approaches appeared first on The Twelfth Magpie.

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• Not sure what a SIPP is? 3 reasons it could pay to know!
• Up 15%, B&M shares are leading the FTSE 250 higher! Is the comeback on?

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of B&M European Value. 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.

Right place at the right time?

I’ve believed for some time that the firm is in the right place at the right time with its value offering, and the progress shows in the financial record. Over the past five years or so, revenue has risen more than 160%, normalised earnings about 320% and operating cash flow by more than 174%. From zero, the dividend has grown since its establishment in 2015. At the current share price close to 310p, the projected dividend payment for the trading year to March 2020 yields around 3% with City analysts predicting cover from normalised earnings around two-and-a-half times.

Yet despite such a strong record and such robust projections from the City, the recent plunge in the share price since the autumn wipes out almost all the share-price progress of the last half a decade. Perhaps B&M has come of age and ongoing trading advances have enabled the firm to grow into its valuation. We could argue that if an economic downturn is coming, sales could fall off a cliff. But that’s a conundrum. If people are skint, where are they most likely to shop for their essentials? In expensive places like M&S and Waitrose, or in places that offer similar stuff only much cheaper, such as B&M? I think B&M, because many seem to love going to the stores already, as you can see for yourself if you stand outside one of the firm’s outlets for a few minutes.

In the third quarter, revenue rose just over 12% on a constant currency basis. Around 80% of that came from the B&M-branded stores in the UK, and like-for-like sales in the UK eased back 1.6% compared to the equivalent period last year. The directors described the previous year’s gain of 3.9% as a “strong prior-year comparable.” Indeed, we can’t expect like-for-likes to rise forever. You can hardly move in many B&M stores because of the number of people in them as it is!

Better value with the shares

The firm had a “difficult November” but a “pleasing finish” to the quarter with UK B&M stores delivering December like-for-like sales up 1.2% and a 3.2% lift in the like-for-like cash gross margin. Looking forward, the directors said in the report that positive sales momentum “has continued into January.” Meanwhile, expansion continues apace with 13 new B&M stores planned for the final quarter, although that doesn’t include the deduction of any underperforming outlets that may be closed if there are any.

I don’t think there’s anything wrong with B&M’s growth trajectory, despite the fall back in the shares at the end of last year. City analysts expect robust advances in earnings and in the dividend this year and next. So, with the growth rating that the market previously assigned to the shares now being cut down in size, I think we are looking at decent value today with B&M shares.

The post Why this firm is one of the most attractive retail shares I know appeared first on The Twelfth Magpie.

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• Not sure what a SIPP is? 3 reasons it could pay to know!
• Up 15%, B&M shares are leading the FTSE 250 higher! Is the comeback on?

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK owns shares of B&M European Value. 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.

Holders of Polymetal International (LSE:POLY) would have been toasting the waves of risk-aversion that battered financial markets in recent weeks, its share price leaping to levels not seen since February on the back of a resurgent bullion price.

And there’s plenty of reason to expect gold to remain well bought as Brexit talks reach their end game, as the second Cold War ramps up, as the war of words over international trade goes on, and as fears of overheated equity markets grow.

With earnings at Polymetal expected to keep flying through the medium term at least, City brokers are predicting bulky dividends of 44 US cents per share and 52 cents for 2018 and 2019 respectively, figures that yield a chunky 4.7% and 5.6%.

European invader

The significant growth potential for value shopping brands makes B&M European Value Retail (LSE: BME) another great dividend share to buy today.

The FTSE 250 retailer doesn’t boast the same sort of monster yields as Polymetal, its own readings clocking in at 2.1% for this year and 2.4% for next year. But the rate at which the firm is growing its dividends, assisted by some fairly stunning double-digit earnings advances, still makes it a brilliant income share, I feel.

The full-year payout leapt almost 25% in the year to March 2018, for example, to 7.2p per share. And City boffins are predicting that it will swell to 8.5p this year and to 9.8p next year.

I’ve previously tipped B&M to thrive as it expands rapidly across the UK and Germany. And news last week that it was continuing its European invasion with the takeover of French cut-price retailer Babou boosted my enthusiasm. Its trading model is terrific and should be as popular with Gallic shoppers as those in its other territories.

A hot dip buy

I feel Hill & Smith (LSE: HILS) is another great dividend growth to pile into today despite the release of disappointing financials more recently.

In August, investors took fright after the crash barrier builder advised that short-term delays to some UK road projects, allied with the impact of bad weather, caused profits to fall short of expectations in the first fiscal half.

Still, thanks to its robust order book, Hill & Smith advised that it expects a good second half of 2018. And looking further down the line, the profits outlook looks good too, as infrastructure investment in Britain as well as the US is only heading one way, and that is northwards.

So I fully expect dividends, which have relentlessly risen for about a decade-and-a-half, to continue rising. The City agrees and last year’s 30p per share reward is anticipated to rise to 31.8p in 2018 and again to 33.1p next year, figures that yield a beefy 3.3% and 3.4% respectively.

The post Have £2,000 to spend? 3 FTSE 250 dividend stocks I’d buy today 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 owns shares of B&M European Value. 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.

These fantastic shareholder gains have been driven by Wilding’s ambitious roll-up acquisition business model that has seen it go from a relatively minor player in the sector to a near billion-pound business with operations in the UK, Australia and Europe.

Looking at the company’s results for the year to March that were released this morning illustrates just how effective this model has been. Revenue for the year grew 29% to £424.8m while underlying operating profits leapt 45% to £48.8m. Much of this growth was driven by acquisitions but the group has also consistently laid down solid organic growth by bundling different flooring products together and offering stores more competitive prices that it can afford due to increased scale.

Over the long term, there’s still plenty of potential growth for Victoria as it executes its proven roll-up model in the massive European flooring market and branches out into other types of flooring such as ceramic tiles.

And as the company buys up smaller competitors it has shown it can significantly improve margins over time through increased purchasing power with suppliers, consolidation of back office and manufacturing functions, and improved scale in warehousing and distribution of its products.  

Now, Victoria is not cheap with its shares trading at a premium valuation of 26 times trailing earnings. Furthermore, with net debt up to 2.68 times EBITDA following this year’s big acquisitions, the company will likely spend the next year deleveraging the balance sheet rather than making splashy purchases. However, with a great business model and plenty of growth opportunities in front of it, I still find Victoria an attractive buy-and-hold growth stock.

Succeeding while other retailers fail

The same is true of discount retailer B&M (LSE: BME), which trades at a 19.9 times forward earnings thanks to investors being impressed by the company’s growth strategy.

It’s true this is a lofty valuation compared to other retailers, but I also believe it’s warranted in the case of B&M. That’s because where other retailers are struggling, it is finding great success by opening new stores and driving increased like-for-like (LFL) sales at existing locations, thanks to unbeatable prices on a range of household goods and groceries.

Weak consumer confidence and dismal wage growth have led a broad swathe of the UK public to shop more frequently at both discount grocers and general stores. This trend helped drive the group’s sales up 21.4% in Q1 thanks to new store openings, the acquisition of the Heron Foods discount grocer, and a 1.6% uptick in LFL sales from B&M outlets.

In the years ahead I expect growth to continue at a low double-digit clip as the group opens around 50 new B&M stores annually, expands the presence of Heron in the UK and general discounter Jawoll in Germany, and uses its increased purchasing power and customer knowledge to drive further LFL sales growth.

With all these positive characteristics alongside sector-leading EBITDA margins of 9.4%, sustainable net debt of only 1.9 times EBITDA and a fast rising 1.72% dividend yield, I’m happy to own my B&M shares for a very long time.  

The post Why I’d still buy this stock that’s turned £1,000 into over £50,000 in under six years appeared first on The Twelfth Magpie.

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Ian Pierce owns shares of B&M European Value. 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.

No one can turn down a deal 

Chief among them are discount chains that have long proven popular with lower income shoppers and since the last recession have also won over middle-class shoppers with their unbeatable prices and comparable quality to higher-priced chains. That aptly describes B&M European Value Retail (LSE: BME), which trades under the eponymous B&M fascia across the UK, the Jawoll brand in Germany and also recently purchased discount grocer Heron Foods domestically.

Each of these brands have been trading well with the flagship B&M carrying the bulk of group-wide growth on its shoulders as its like-for-like sales orse by a whopping 3.9% in the quarter to 23 December. Together with new stores openings, this led to revenue rising from £741.4m to £837.3m during the period.

Looking ahead, I expect B&M’s like-for-like growth to move up and down from quarter to quarter. But it should continue to grow nicely over the long term as the group broadens its range of grocery offerings, spends more on marketing to build brand awareness, and benefits from weak wage growth, leading consumers to trade down to discounters.

There’s also considerable scope for growth through new stores openings as at quarter-end, B&M traded from 569 stores, Jawoll only had 84 and Heron Foods 263. Given the majority of the group’s UK stores are geographically concentrated in the north of the country, there’s space for continued expansion into virgin territory in the south.

With industry-beating EBITDA margins of 8.6%, an attractive valuation, healthy balance sheet and continued growth from new stores, as well as like-for-like expansion, I’m very happy to own my B&M shares for the long term.

Selling plenty of sneakers 

Another retailer that didn’t get the memo about traditional bricks and mortar stores going the way of the dodo is JD Sports (LSE: JD). In the year to February, the sports clothing chain saw sales jump 33% to £3,161m as like-for-like sales grew 3%, online sales rose by 30% and a handful of new stories were opened overseas.

This growth has come from broader trends such as the immense popularity of athleisure, as well as JD being smart about how it presents its stores and the goods inside, unlike some competitors such as Sports Direct. And for the next few years, I reckon the company can continue to expand at a breakneck pace as it opens up new stores in Europe, focuses on the US, expands into Asia and invests in boosting its online offerings.

And with the company’s stock trading at just 14.8 times forward earnings, a balance sheet with net cash of £309m at year-end and a history of incredible shareholder returns, I reckon JD Sports could be a fantastic long-term growth retailer trading at a very attractive price.

The post Think retail is dead? No one told these thriving retailers that are growing at light speed appeared first on The Twelfth Magpie.

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Ian Pierce owns shares of B&M European Value. 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.

Pressure on the UK high street is steadily worsening as inflation easily outstrips wage growth. And with the domestic economy predicted to keep slowing, conditions aren’t going to get any better soon either, forcing cash-strapped shoppers into the arms of value-focused retailers.

B&M is thriving in this environment and it announced in January that sales had risen 22.9%, to £969.8m, in the 13 weeks to December 23, or 3.9% on a like-for-like basis. The retailer commented that the bright like-for-like improvement reflected  “the continued robust performance of our grocery and FMCG ranges, further operational improvements to store standards for customers and the recognition of our value offer by consumers generally.”

Expansion drives sales growth

The leap in the headline revenues figure was down to its fizzy store expansion programme, the FTSE 250 company having opened 19 B&M stores in the 13-week period alone. It had 569 B&M stores up and running by the close of the last quarter, while it had 263 Heron Foods outlets as well after the opening of a further four in the period.

B&M isn’t restricting its ambitious rollout programme to its home territory either. Two store openings over in the European economic engine room in the last quarter took the number of Jawoll cut-price outlets to 84.

Reflecting the retailer’s ambitious expansion drive, City analysts are expecting it to keep growing earnings by double-digit percentages, and they are predicting growth of 20% and 19% for the years to March 2018 and 2019 respectively.

And current projections make B&M brilliant value, the firm dealing on a P/E ratio of 19.5 times for the forthcoming year and a corresponding PEG reading bang on the bargain watermark of 1.

An added bonus is that its brilliant profits outlook is expected to keep thrusing dividends skywards so last year’s 5.8p per share reward is predicted to rise to 7.5p in the current period and again to 8.5p in fiscal 2019.

These estimates yield a chunky 1.8% and 2.1%.

Another great growth pick

Those on the lookout for another share growing earnings and dividends at a sprightly pace need to take a look at GVC Holdings (LSE: GVC).

In 2018 the online gambling giant is predicted to report a 21% profits improvement, a prediction that also leads to expectations of dividend expansion to 37 euro cents per share from 34 cents last year.

And next year, a predicted 9% earnings jump supports expectations of a 40 cent payment. Current dividend predictions lead to chubby yields of 3.4% for this year and 3.7% for 2019.

In terms of value, a forward P/E ratio of 16.1 times is hardly outstanding, but a corresponding PEG reading of just 0.8 times certainly is. This is much too cheap given the exceptional revenues-boosting opportunities and cost benefits brought by its merger with Ladbrokes Coral, even in spite of the danger of a regulatory clampdown on fixed odds betting terminals. As the popularity of online gambling takes off, I expect profits at GVC to keep on booming.

The post 2 cheap growth stocks I’d buy right now appeared first on The Twelfth Magpie.

More reading

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended GVC 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.

Discount retailer B&M European Value Retail SA (LSE: BME) and soft drinks supplier Britvic (LSE: BVIC) are near the top of my watch list, and one of the first attractions is their dividends. At today’s share price around 702p, Britvic has a forward dividend yield of 3.9% for 2018 and B&M’s is 2.1% at the recent share price of 407p.

Good form

B&M has increased its dividend payment by 122% over three years and Britvic by 44% over four years. City analysts following these two expect B&M to push up its dividend around 13% for the trading year to March 2019 and a little over 16% the year after that. They predict Britvic will increase its dividend by just over 3% this year and 5% next year. Both companies are doing a good job of rewarding investors with progressive dividends, and the fact that they are able to do that suggests healthy underlying businesses.

B&M’s range of grocery and fast-moving consumer goods has really hit the spot with customers seeking everyday value. My local out-of-town B&M store is always heaving with customers whenever I pop in, and the situation is probably similar at many branches, judging by the firm’s growth numbers. Analysts forecast 19% growth in earnings for the year to March 2019 and 13% the year after that. In January’s trading statement, chief executive Simon Arora said “B&M continues to go from strength to strength,” and I can’t see any sign of the operational momentum slowing down. Maybe competitors will eat into the firm’s market share in time, but I think the B&M name itself is a brand that customers seem to trust. As long as the company keeps giving customers what they want I reckon many will remain loyal to it.

Defensive strength

Meanwhile, Britvic’s rate of earnings growth is slower with analysts expecting just a 1% uplift for the current year to September and 5% next year. However, the firm operates in a defensive sector with strong brands, and I reckon the higher dividend yield on offer compensates for lower growth figures.

In January’s trading statement, chief executive Simon Litherland told us that Britvic “delivered a solid start to the new financial year, with group revenue growing 3.3% ahead of a strong first quarter last year.”  He admitted that the government’s new soft drinks levy in the UK and Ireland “brings a level of uncertainty,” but went on to say that the “strength and breadth” of the firm’s brand portfolio will help the company overcome challenges thrown up by this attack on the sugar content of soft drinks.

I don’t think people will stop buying the firm’s brands such as Robinsons, Drench, Pepsi Max, 7Up, J2O and Fruit Shoot just because the sugar content is reduced, and I think Britvic’s defensive qualities remain attractive and capable of powering ongoing growth in the dividend in the years to come. Meanwhile, B&M’s fast growth looks set to keep the retailer’s dividend growing, so I see both these stocks as attractive long-term bets and ideal for buying when any dips occur due to general stock market weakness.

The post 2 shares I’m poised to pounce on after this market rout appeared first on The Twelfth Magpie.

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• Not sure what a SIPP is? 3 reasons it could pay to know!
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Kevin Godbold 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.

A growth stock I have long tipped for greatness is corporate jet services provider BBA Aviation (LSE: BBA).

Having got back to earnings growth in 2016 the City is expecting BBA to post a sustained period of impressive expansion. This year a 10% advance is forecast (and follows a projected 23% profits improvement in 2017). And in 2019 the flying ace is expected to see the bottom line swell an extra 8%.

A prospective P/E ratio of 19 times may sail outside the widely-accepted value terrain of 15 times or below. But I believe BBA is more than worthy of this premium.

Primed for take-off

I last wrote about the stock in November when I noted that recent broker estimate-beating trading numbers had indicated a pick up in revenues momentum over the past quarter. Like-for-like sales at its Signature flight support division rose 5.3% in quarter three versus 3.2% in the first half.

What is particularly encouraging is that, thanks in no small part to its expanded asset base following the Landmark acquisition in 2016, the FTSE 250 business continues to grow ahead of the wider market. During the July-September quarter like-for-like sales at Signature outstripped the 4.3% rise in US business and general aviation flight movements in the period.

This, combined with flight activity steadily increasing in the States thanks to the strengthening economy across the Pond, looks set to keep earnings on a steep upward slant now and, in my opinion, long into the future too.

Pick up a bargain

Another share I am tipping to achieve great things in 2018 (and beyond) is B&M European Value Retail (LSE: BME).

Latest inflation data this week showed a welcome slowdown in rising inflation during December, the CPI gauge dropping for the first time in six months to show growth of ‘only’ 3%. But I don’t think that the high street’s biggest operators were breaking out the bunting as this figure remains just a whisker away from November’s six-year peak of 3.1%. Besides, prices continue to swell well above average wage growth in the UK, keeping the strain on shoppers’ budgets.

In this environment the cut-price wares over at the likes of B&M are likely to continue flying off the shelves. Back last week the Liverpool-based business announced that group sales (at constant currencies) vaulted 22.7% higher during the 13 weeks to December 23, to £969.8m, underpinned by a 3.9% improvement in like-for-like revenues in its core British marketplace.

And B&M is exploiting the growing trend of consumers squeezing more distance out of their hard-earned cash by expanding aggressively across the UK and Germany. At home, the company now operates 569 outlets, the business having opened an extra 19 in the last quarter alone.

Reflecting the FTSE 250 firm’s bright sales outlook the City expects earnings to step 20% higher in the year to March 2018. And an extra 19% advance is forecast for fiscal 2019.

A forward P/E ratio of 23.3 times may look expensive on paper, although a PEG ratio of 1.2 times certainly doesn’t. I believe B&M is a compelling pick at current prices given its favourable trading backcloth and ambitious growth strategy.

The post 2 monster growth stocks I’d buy for 2018 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 and has recommended BBA Aviation. 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.