In fact, the Begbies Traynor share price has gained 80% over the past five years, with a 12-month spurt inspired by full-year results in 2017. And a trading update Thursday added a couple of percent to the price, with the company telling us it has “continued to deliver earnings growth reflecting the benefit of the strategic investments we have made in recent years.”

The firm offers business recovery, financial advisory and property services, and reported a 6% increase in government insolvency statistics. That’s helped boost insolvency appointments to 7,915 in the six months to June 2018, from 7,462 in the same period last year.

Healthy cash

Earnings have been growing steadily for the past few years, and the dividend, which had been held flat, was lifted in 2017 and is predicted to grow further this year and next. Analysts expect a yield of 4.3% by the year to April 2020, which would be around 1.8 times covered by forecast earnings.

That looks safe to me, from a company with net debt at April 2018’s year-end of a modest £7.5m — that was down from £10.3m in 2017, and represented the company’s lowest debt since 2007. It’s a strongly cash generative business, and I see a tempting long-term dividend prospect here.

Progressive dividend

In Charles Taylor Consulting (LSE: CTR), I think I see an overlooked progressive dividend prospect. The annual cash handout has been lifted year-on-year, and yielded 3.9% in 2017. Forecasts suggest that will grow to 4.4% this year and 4.7% next, while the stock’s P/E multiple is predicted to drop to under 11.

At the interim stage at the end of June, revenue was up 21%, adjusted pre-tax profit gained 10%, with adjusted EPS 11% higher, and the interim dividend got a 5% boost.

Net debt was up at £52.7m, which does concern me a little. But acquisitions during the half were funded by an oversubscribed share placing, and that implies healthy confidence in the business to me.

I do agree with my colleague Rupert Hargreaves who has suggested the business can be misunderstood, and I can’t help thinking many just see it as being in that dodgy insurance business and are keeping clear.

Profitable services

But what Charles Taylor is doing is offering services to the insurance sector, so it’s not directly exposed to insurance risk itself. And it’s another of that class of ‘picks and shovels’ businesses that I expect to do well, whoever is winning at the sharp end of an industry.

I see this as a company with good repeat business prospects, but also with the ability to make smart acquisitions when the conditions are right. I’m seeing it mainly as an income pick, but a 39% share price rise over five years, coupled with that low P/E valuation, suggests further growth prospects too.

The post £1,000 to invest? Here are two dividend stocks that could boost your pension appeared first on The Twelfth Magpie.

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Alan Oscroft 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.

Indeed, today the firm announced a near 25% increase in revenues and 31% increase in statutory profit before tax for the year ended 31 December thanks to organic growth and bolt-on acquisitions. Off the back of this growth, overall earnings per share increased 17%, and management increased the full-year dividend per share 5% to 11p. Adjusted earnings per share for the period were 25p.

Growth through experience 

According to Charles Taylor, the company “aims to deliver shareholder value by delivering a diversified set of income streams,” which provide sustainable earnings growth while at the same time investing in “opportunities to achieve a step change in longer term earnings growth.” I believe that this focus on growth is what makes the firm attractive as an investment. 

Management is growing the business by expanding outside of its core markets into areas where Charles Taylor can bring decades of experience to bear. For example, during 2017 the firm acquired the book of Zurich International life insurance bonds, which it then folded into its wholly-owned Isle of Man life insurer. The group also purchased Criterion Adjusters, a loss-adjusting business focused on UK high net worth insurance sectors in 2017, further building on the company’s presence in the loss-adjusting business. 

As long as Charles Taylor continues to make sensible acquisitions, and maintains its reputation in the insurance business, I believe that it is a great growth pick. The stock also supports a dividend yield of 4% after today’s hike, so there’s both income and growth on offer. What’s more, based on today’s reported adjusted earnings per share figure, the stock is trading at a bargain-basement P/E of 10.8. 

Charles Taylor’s peer, Jardine Lloyd Thompson (LSE: JLT) isn’t as cheap on a P/E basis, but it’s still an attractive investment in my view considering the company’s historical growth. 

Simplifying the business 

Jardine Lloyd is a provider of insurance, employee benefits advice and associated services. There’s some overlap with Charles Taylor’s offering, but Jardine is more focused on providing insurance rather than providing related services. 

Last year the company reported a 35% increase in full-year pre-tax profit and to help improve profitability further, management is reorganising the business into three separate divisions, reinsurance, speciality insurance, and employee benefits, which should generate an estimated £40m in annualised savings at a one-off cost of £45m. City analysts expect the reorganisation, as well as revenue growth, to power net profit higher by 57% over the next two years.  Based on this target, earnings per share could hit 84p by 2019 giving a forward P/E of 15.4 — not cheap but in line with the insurance sector’s median valuation. 

As well as steady growth, shares in Jardine support a dividend yield of 2.8%, and the payout has grown steadily at a rate of around 6% per annum over the past six years. 

The post 2 growth stock ideas for your first £1,000 ISA investment appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of Jardine Lloyd Thompson. 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.

It declared: “We have delivered a strong trading performance in the second half of the year, with good results from sales and tightly controlled operational and finance costs.” As a result, it predicts adjusted earnings in the 12 months to September to rise to approximately £70m, from £53.1m a year ago.

Grainger noted that sales of vacant properties were around 2% ahead of the September 2016 year-end vacant possession value, and during the 11 months to August, like-for-like rental growth across its portfolio registered at 3.7%.

Meanwhile, its private rented portfolio has reported growth of 3.2%, while the firm has witnessed annualised rental growth of 4.4% in its regulated tenancy portfolio.

Safe as houses

Grainger has a pretty erratic earnings history, certainly in recent times, and City analysts aren’t exactly falling over themselves to declare a recent upturn in the company’s bottom line – a 35% decline is pencilled in for fiscal 2017.

Still, this isn’t expected to prove an obstacle to the residential landlord keeping its progressive dividend policy on track. Grainger has hiked dividends at a compound annual growth rate of 18.6% over the past five years, and is expected to lift the reward to 4.83p per share in the outgoing period, from 4.5p in 2016.

And supported by an expected 5% earnings rise in the forthcoming year, the company is anticipated to introduce another meaty dividend rise, to 5.73p. However, yields over at Grainger are not likely to get hearts racing right now. These clock in at 1.9% and 2.2% for 2017 and 2018, respectively.

However, while Grainger’s operations – like its dividend yields – may not be the most exciting, the company provides the sort of stability that all income chasers crave. And with its strategic shift towards the private rented sector impressing so far, and its cost-cutting programme also clicking through the gears (it is on course to hit its £27.5m overhead reduction goal for the outgoing year), I believe the FTSE 250 giant remains a hot investment destination.

Mouth-watering yields

I also reckon Charles Taylor (LSE: CTR) is a great selection for both growth and dividend chasers.

You see, with the professional services provider increasingly spreading its tentacles far and wide, revenues at the business continue to shoot skywards. Between January and June, these rose 36.1% year-on-year to £100.7m. Charles Taylor also remains busy on the acquisition trail to keep business rolling in; just this month it sucked up compensation insurance claims administrator Metro Risk Management of the US for a fee that could rise to £1.8m.

Although Charles Taylor is predicted to endure an 8% earnings dip in 2017, the small cap is expected to snap back with a 6% rise in 2018. And the company’s sunny long-term profits outlook is expected to keep driving dividends skywards over the next couple of years at least – the 10.5p per share reward of 2016 is predicted to pound to 11p this year, and to rise again to 11.7p next year.

As a result, yields clock in at a formidable 4% and 4.3% for this year and next.

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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.

I was reminded of that when I read the latest trading update from Trifast (LSE: TRI) on Monday. The firm is in the business of mechanical fasteners, and I can’t help wondering how many millions of those are sold every day. 

The share price has soared by 370% over the past five years, to 206p, and that’s been on the back of years of double-digit earnings growth. On a forward P/E of around 15.5 now, I still think we’re seeing an attractive valuation.

Another great year

After reminding us that the year to March 2017 was a record one, Trifast told us it is on track to meet its key performance indicators of “revenue, overheads and margins across all our business teams in the UK, mainland Europe and Asia.”

Capital investments and acquisitions are continuing nicely, and currency exchange fluctuations have had a pretty benign effect overall with 70% of Trifast’s business being overseas. 

But I haven’t mentioned dividends yet.

Yields have only amounted from 1.4% to 2.2% over the past five years, and that might not thrill you if you’re an income seeker. But the storming share price gain has hidden the underlying progress there, with the actual cash paid rising from just 0.8p per share in 2013 to 3.5p for the year just ended — and further predicted uplifts to 3.65p this year and 3.8p next year would mean the dividend will have risen 4.75-fold in just six years.

The cash is covered around 3.5 times too, and I’m seeing a future long-term dividend cash cow here.

Bigger yields

If you want bigger dividend yields, Charles Taylor Consulting (LSE: CTR) might be one for you, with payouts of around 4% on the cards, which should be around 1.9 times covered by earnings.

And, crucially, the company operates a progressive dividend policy. It did have to impose a cut from 10p to 8.77p in 2013, but since then we’ve seen regular annual rises up to 10.5p in 2016, with 10.95p forecast for this year and 11.65p next.

Charles Taylor provides professional services to the insurance market, and that’s proving to be a nice long-term generator of cash. First-half results released in early September lend support to that, although the key story right now is the firm’s growth strategy involving its three key business — its management services, loss-adjusting services, and insurance support services.

Planning for growth

EPS is expected to fall back a little this year as the company focuses its capital on that growth plan, but earnings should start moving upwards again in 2018. And chief executive David Marock said the board is “very positive about the long-term prospects for Charles Taylor” and that “we are well-positioned to deliver further growth, increased profit and greater shareholder value.“

In terms of numbers, we’re looking at forward P/E ratios of around 13.5 and 13 this year and next respectively, which looks cheap for a company offering progressive 4% dividend yields.

What both these companies have in common is a strong outlook for long-term growth in earnings, and that’s essential if you’re looking for those dividends to keep on growing — no company can keep its dividends growing year after year without rising earnings.

The post Two nicely progressive dividends that could make you rich appeared first on The Twelfth Magpie.

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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.

Charles Taylor (LSE: CTR) flies under the radar of most investors, but the company does not deserve its overlooked status. The firm provides professional services to the insurance market, a specialist and lucrative job. 

The company is growing its business both organically and through bolt-on acquisitions. According to figures released today, for the six months to 30 June, 2017 revenue grew 36.1% year-on-year to £100.7m. Adjusted earnings per share expanded 5.8% thanks to “ongoing programme of investing in the group to expand our service offering for our clients globally and to deliver long-term growth in profits for shareholders.”

Management outlined four key strategic initiatives at the end of 2016, to help drive growth and the pursuit of these objectives has pushed costs higher, but shareholders should benefit over the long run. 

For the full-year, City analysts are expecting Charles Taylor to report earnings per share of 19.9p, down 11% year-on-year as the company continues to allocate capital to growth. However, in 2018 earnings expansion of 6% is pencilled in, taking earnings to 21.2p per share, giving a P/E of 12.3.  

Conservative dividends 

Charles Taylor operates a conservative dividend policy. For the past five years, payout cover has averaged two times, and management has not been afraid to cut the dividend in lean years to make sure the business does not overstretch itself. 

Going forward, the group is expected to pay out 11p per share to investors this year, and 11.6p for 2018. Both payouts will be covered at least twice by earnings per share. At the time of writing, shares in Charles Taylor support a dividend yield of 4.5%, rising to an estimated 4.7% by 2018. Continued investment in growth should underpin steady payout growth for the foreseeable future. 

Undervalued dividend

Concerns about the state of the UK property market have helped cut the value of shares in LSL Property (LSE: LSL) in half since the beginning of 2014. Over this period, earnings per share have declined by less than 20% as the firm’s diversified offering has helped it avoid the issues hurting other estate agents. 

As well as its estate agent division, LSL also provides services for landlords, valuation services for lenders for residential mortgage purposes, surveying services for private house purchasers, and the provision of Home Reports and professional services in Scotland. 

One of the company’s biggest clients is Barclays. Today the firm announced that its contract to supply UK residential survey and valuation services to the company has been extended, which should help boost confidence in LSL’s outlook. 

Dividend growth 

City analysts are not expecting much in the way of earnings growth this year but next year growth of 6% is projected, and the firm is on track to pay a dividend of around 10.3p to shareholders this year (based on last year’s numbers), giving a dividend yield of 4.5%. That said, considering the company reported a 34% increase in adjusted earnings per share for the first half, I would not rule out a full-year dividend hike to reward investors. 

Shares in LSL currently trade at a highly attractive valuation of 9.2 times forward earnings. 

The post 2 small-cap 4.5%+ yielders you probably haven’t considered appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns shares in LSL Property Services. The Motley Fool UK has recommended Barclays. 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.

An undervalued small cap?

Charles Taylor Consulting (LSE: CTR) is a smaller company that I’ve liked the look of for a while. Charles Taylor provides professional services to the insurance industry, which is looking healthier now than it’s been for some years, and I reckon that should lead the way to nice profits for related service firms.

After a few tough years when the sector was in a slump, Charles Taylor has been rebounding nicely, with EPS growth of 40% reported in 2015. And it’s just reported a further rise of 11.5% for the year ended December 2016, after revenue rose by 18.1% to £169.3m and adjusted pre-tax profit gained 4% to £14.8m. Debt was up to £37.5m, though the firm described that as a return to “normal levels“.

The dividend was lifted by 5% to 10.5p, with further inflation-busting increases already forecast for this year and next, which would push the yield to 4.5% and more.

Chief executive David Marock said the firm is reinvesting to drive growth “both organically and by undertaking strategic acquisitions, entering into joint ventures and making business investments” and is looking to “create opportunities to drive future growth in the medium to longer term“.

What I’m seeing here is a company looking forward to a decent growth phase and valued quite modestly for that on a forward P/E of 11, dropping to 10.4 on 2018 forecasts. On top of that, we also have a firm that is strong on cash generation and able to offer progressive and well-covered dividends. Looks like a winner to me.

Gambling growth

In 32Red (LSE: TTR) I see a stock that would have greatly excited a younger me, back when growth investing was my thing. I’m seeing a young-ish company in a relatively new market, whose earnings have really started to take off and whose shares are still priced attractively on classic growth metrics.

Results have just been released for what the firm called “a record year for revenue and profit” in 2016, with net gaming revenue up 28% to £62.3m and EBITDA more than doubling to £10.6m. Diluted earnings per share soared to 6.93p and the dividend was hiked by 89% to 5.3p per share.

Still in its early days, the worldwide online gambling business is still feeling its way forward regarding regulation and taxation, and that’s something that has given a few firms the occasional setback. But 32Red says that 77% of its net gaming revenues now come from regulated and taxed markets, and that seems to represent a maturing of the business and a reduction of risk.

What’s the growth valuation looking like now? EPS growth looks set to slow a little, which is to be expected, but with 20% on the cards we’d still see a forward PEG of 0.7 for this year — and it would fall to 0.6 a year later with another 18% earnings rise penciled in.

There’s always the same big risk with shares like this — the first time results come in slightly behind expectations, we usually see a desertion by early investors and a share price drop.  But with two years of attractive PEG valuations in the pipeline, growth investors would do well to look beyond that.

The post 2 stocks I’d buy after FY results appeared first on The Twelfth Magpie.

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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. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.