I still consider it to be a brilliant income share to buy today and hold forever, though, given that the yield is still quite chubby, as well as the probability that dividends should keep rising at a health rate each year. Shareholder rewards at Bloomsbury have already risen for 24 years on the bounce.

Why am I so confident? Well the colossal popularity of Harry Potter, of course, and the huge amounts of profits and cash that the wizard conjures up for his publisher. This was perfectly illustrated by the fact that revenues from JK Rowling’s legendary franchise boomed 31% last year, one which marked the 20th anniversary since Potter first rolled into Hogwarts.

Bloomsbury would be mad not to capitalise on this and thankfully it has no intention of neglecting the franchise. Following the special editions which marked last year’s milestone, the publishing house has plans to unveil an illustrated version of Harry Potter and the Goblet of Fire in the months ahead, just to give you a flavour.

Strength all round

I’d be doing Bloomsbury a massive disservice by suggesting that it’s simply the House of Harry, though. The company has terrific strength and depth as shown by the 24 bestsellers it delivered last year.

I’m also hugely encouraged by the progress it’s making in the field of academic and professional digital resources, a segment in which revenues blasted 42% higher in the last fiscal year. Bloomsbury has big plans to keep sales here shooting through the roof by adding aggressively to its library and signing content partnership deals with major universities and academic organisations.

City analysts expect Bloomsbury’s profits growth to improve 14% in fiscal 2020 and this, allied with the rate at which it’s creating cash — net cash on the books rose £2.2m year-on-year as of February to £27.6m — suggests that it will indeed raise the dividend again this year. I think it’s safe to say that it’s in great shape to keep hiking rewards long beyond the near term.

Brick beauty

I’m also confident enough to tip Forterra (LSE: FORT) as another share that can provide huge returns for many years to come.

Not that dividend chasers have to wait long to make a large windfall. In May, the brick-maker said that it was increasing the dividend payout ratio to 45% of earnings in 2019 and to keep lifting rewards thereafter.

The rationale behind this move? The receipt of planning permission to build a state-of-the-art brick-making facility in Leicestershire, a move that’ll more than double current capacity and allow the production of 180m bricks per year when it opens in 2022. Forterra can be confident that its bricks should fly out of the factory and that demand should remain robust for many years given the scale of the country’s homes shortage. 

Like Bloomsbury, yields at the business may not be the biggest right now — this currently sits at 3.7% for 2019 — but its bright profits outlook and appetite for rewarding shareholders also makes it a top buy for income chasers, I believe.

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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.

Responding to smaller returns and higher regulations than in prior years, we here at The Motley Fool believe that investing in the stock market is a much better way to make your money work for you, and is likely to remain so as the UK’s homes shortage causes government to make life more and more difficult for landlords.

Aside from Grafton, I feel that another better way to play the property market instead of buy-to-let is through buying into brickmaking giant Forterra (LSE: FORT).

Residential build rates in the UK have failed to keep pace with demand growth over the past decade and this is continuing to turbocharge activity amongst the country’s homebuilders. Indeed, such is the scale of the supply shortage that many of the major construction players are ramping up production, and this bodes well for Forterra and its range of building products.

Stunning numbers

The strength of the new-build market was highlighted perfectly by brilliant full-year results from the Northamptonshire firm this month.

Revenues stepped 11% higher to £367.5m in 2018, which Forterra said was “partly due to a modest increase in volumes which reflected the sustained strength of the new build residential market following the strong growth seen in 2017.” But this is not the whole story. So tight is domestic brickmaking capacity that the small cap was successfully able to pass on cost increases across all its ranges to its customers, and this helped pre-tax profits sail more than 9% higher year-on-year to £64.8m.

And Forterra is confident that the trading environment should remain supportive for some time yet. It’s why last year it approved the construction of a £95m extruded brick factory in Desford, Leicestershire with annual production of 180m bricks, a move that will boost group production by 16% once it gets up and running in 2022.

Big dividends

Now I mentioned the prospect of huge dividends at this property stock in the headline so let’s get onto that.

Forterra has proved to be a winner for those seeking hot dividend growth in recent years, the business having hiked shareholder payouts by 80% over the past three fiscal periods in reflection of its explosive, double-digit percentage earnings rises.

City analysts are expecting profits progression in the next couple of years to slow markedly in the next couple of years — to 3% and 6% in 2019 and 2020, to be exact — and this creates predictions that dividend increases will decelerate as well. An 11p per share reward is predicted for this year, up from 10.5p in 2018, and an 11.6p payout estimated for 2020.

The good news is that these forward figures still yield a mighty 3.9% and 4.1% respectively, and they also look pretty well protected (covered 2.5 times by forecast earnings, in fact). Besides this, I reckon there’s a good chance that these dividend estimates will be booted higher as 2019 progresses and the strength of its end markets drives profits skywards. If you’re searching for great income shares, I believe Forterra is one that pays big right now and should keep doing so long into the next decade at least.

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As my colleague Royston Wild explained recently, landlords are ditching buy-to-let in favour of better opportunities. In this article I’m going to highlight three property-related stocks I believe could be much more profitable than buy-to-let.

There’s still money in building

A slowdown in the buy-to-let market doesn’t mean that demand for housing has fallen. Would-be homeowners are still flocking to buy new houses with the help of the government’s Help to Buy scheme.

Alongside this, institutional investors are investing in bulk-buy rental property deals as a long-term investment.

All of this means that the UK’s major housebuilders are still performing well. My top pick in this sector is FTSE 250 firm Redrow (LSE: RDW). Founder Steve Morgan returned to the business 10 years ago, in the wake of the financial crisis. He’s patiently rebuilt the firm into a quality operator with a very strong balance sheet.

An operating margin of almost 20% supports strong cash generation, while the balance sheet is now free of debt. The forecast dividend yield for the current year is 4.7%, plus an extra 2% from a special dividend, giving 6.7% in total.

Mr Morgan has now retired from Redrow for a second time. But I believe he’s left behind a solid business, with a sustainable dividend and a positive outlook.

Bricks and blocks

An alternative way to invest in property is to own shares in companies that produce essential materials, locally. In this case, I’m looking at brick maker Forterra (LSE: FORT).

Some industries can be disrupted by cheaper imports. But builders always favour local brick supplies where possible because bricks are heavy, bulky and relatively low value. This means long distance transport costs are high, compared to the price of the product.

Like its peers, Forterra is reporting strong demand. Sales rose by 11% to £367.5m in 2018, while pre-tax profit was 9.3% higher, at £64.8m. I was pleased to see that net debt fell by 36% to £38.8m, providing good evidence of the group’s strong cash generation.

The risk here is that profits could slump in a downturn. But there’s no sign of this so far. With operating profit margins running at 18% and the shares yielding 3.5%, I believe the shares remain attractive.

A cautious approach

One company I’ve followed for a while and been consistently impressed by is industrial property landlord Hansteen Holdings (LSE: HSTN). Unlike some rivals, management here has used high prices as an opportunity to sell some assets, repay debt and return cash to shareholders.

The company’s business model is to buy, improve and sell property. Management expects to be net sellers for the foreseeable future until more attractive buying opportunities emerge. Not everyone will agree with this approach, but in my view it has some merit. I think this disciplined strategy is much less risky than that of companies which continue to expand at all costs in a rising market.

At some point, the tide will turn. In the meantime, Hansteen shares trade at a 10% discount to their net asset value of 100p and offer a forecast yield of 5.4%. The stock remains on my buy list and could soon find its way into my portfolio.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Hansteen Holdings and Redrow. 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.

But why restrict my search to London’s biggest blue-chips? Here are two brilliant small-caps to consider stocking up on before that upcoming investor deadline.

Hit the bricks

Given the size of the country’s homes shortage, it’s likely that Forterra (LSE: FORT) will remain a mighty dividend payer for many years to come.

It’s important not to underestimate the extent to which Britain’s builders need to charge up build rates to meet soaring demand and, as one of the country’s foremost brickmakers, Forterra is well placed to capitalise on this requirement.

Latest stats from the Ministry of Housing, Communities and Local Government illustrated the scale of the supply/demand imbalance in the UK homes market and the work by the housebuilding sector to soothe it. Apparently, there were some 44,740 newbuild residential starts (seasonally adjusted) between October and December, up 12% from the previous three-month period, a figure that reflected the strength of the market even in unpredictable political and economic times such as these.

Big dividends, top value

Fresh commentary from the Brick Development Association confirmed the strength of current housebuilding activity too, the body commenting in recent weeks that “despite the current political uncertainty we are seeing no sign of the demand for new houses slowing down.” What’s more, it was confident enough to predict that “given the continued focus on the housing shortage across all political parties, we believe that housebuilding will remain strong.”

Against this backcloth, City analysts are expecting earnings at Forterra to keep growing by mid-single-digit percentages over the next couple of years. Good rather than spectacular, but the same cannot be said of the company’s dividend yields for this period.

Thanks to predicted dividends of 11p and 11.6p per share for 2019 and 2020, respectively, yields for these yields clock in at an inflation-smashing 4% and 4.2%. There’s clearly a lot for income chasers to get stuck into, and particularly so for value chasers because of Forterra’s dirt-cheap forward P/E ratio of 10.3 times.

Another big yielder

That beautiful blend of low prices and big dividends also makes Nexus Infrastructure (LSE: NEXS) a great stock to put into your ISA this year.

Like Forterra this business — which is a provider of critical infrastructure, from concrete frames and drainage hardware to utilities connections — is well-placed to benefit from this rise in homebuilding rates in the future.

It’s why the number crunchers are predicting sustained profits growth over the next couple of years at least, leaving Nexus dealing on a prospective earnings multiple of 10.5 times. It’s also why dividends are predicted to keep rising, too, with payouts of 7.3p and 8.6p per share estimated for fiscal 2019 and 2020, respectively.

These figures yield 3.5% and 4.1% and make the construction colossus another share to seriously consider buying for an ISA.

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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.

Personally, I prefer to gain exposure to the housing market by investing in listed companies with exposure to UK property. Today, I’m going to look at two such firms, both of which offer attractive 5% dividend yields

A guaranteed profit from buy to let?

One way to make money from buy-to-let property is to provide mortgages for landlords. Paragon Banking Group (LSE: PAG) is a specialist buy-to-let lender with more than 20 years’ experience. During the year ending 30 September, the value of new loans to landlords rose by 6.8% to £1,495.5m.

This increase helped to lift the group’s adjusted pre-tax profit by 25.3% to £181.5m last year. Paragon’s return on tangible equity — a key measure of profitability for lenders — rose from 13.4% to 16.1%.

Demand from buy-to-let landlords is said to remain strong. The firm’s pipeline of new lending opportunities rose by 28.9% to £778.9m last year. One reason for this may be that tougher government rules on lending to landlords have prompted some smaller lenders to exit this market. This could make it easier for larger players like Paragon to increase their market share.

Why I’d buy

Paragon’s main focus is on what it calls “professional landlords.” This generally means borrowers with more than three mortgaged rental properties, or those renting houses of multiple occupation.

As a potential investor, this looks more attractive to me than pinning my hopes on a single rental property.

I’m also attracted by Paragon’s valuation. The shares currently trade at just 1.2x their tangible net asset value of 359p per share. Alongside this, broker forecasts indicate a dividend yield of 5.1% for 2018/19. Overall, these shares look good value to me. I’d rate Paragon as a buy.

Bricks, but no mortar

Many new-build houses are sold to rental landlords. Although you can invest directly in house-builders, one way to spread your exposure more widely is to buy shares in a brick maker.

One of my favourite stocks in this sector is Forterra (LSE: FORT). Shares in this firm have fallen by nearly 30% this year, but I think this sell-off may have gone too far.

The group’s latest trading update reported “good levels of activity in the new build residential sector.” Sales so far this year are said to be “marginally ahead” of last year. Although rising costs from energy, fuel and carbon credits put some pressure on profits, the company still generated enough cash to reduce net debt by 8% to £56.1m.

Unfortunately, problems with a kiln mean that this facility will have to be rebuilt before operations resume. This means that operating profit this year will be £2m-£3m lower than expected.

I don’t see this one-off problem as a huge concern. Broker forecasts indicate that earnings are expected to rise by 4%, to 25p per share this year. This earnings figure should cover the forecast 10.4p dividend 2.5 times, providing a good margin of safety for income seekers.

At the time of writing, Forterra shares were trading at 218p. This puts the stock on a forecast price/earnings ratio of 8.3 with a dividend yield of 4.9%. I believe this could be a good buy, despite the risks of a housing slowdown.

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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.

One under-the-radar Woodford stock that I believe looks interesting right now is Forterra (LSE: FORT), which had a 1.2% weighting in his flagship Equity Income fund as of the end of June. At present, the stock is trading on a forward-looking P/E ratio of just 11.3. Here’s why I think that valuation offers considerable long-term value.

Housing crisis

Forterra is a manufacturer of masonry products, with strong market positions in both clay bricks and concrete blocks. With a focus on the efficient manufacture of bricks for the housing market, the company looks well placed to benefit from Chancellor Philip Hammond’s plans to build 300,000 new UK homes per year by the mid-2020s to solve the UK’s so-called housing crisis.

Half-year numbers released this morning look pretty solid. For the six months ended 30 June, revenue climbed 10.6% to £180m, while earnings per share before exceptional items rose 3.2%. The interim dividend was hiked by a healthy 6.5% to 3.3p per share and net debt was reduced from £60.8m at the end of 2017 to £51.9m at the end of June.

The shares had a strong run between July 2016 and mid-May this year, rising almost 200%, yet over the last few months, the stock has corrected by around 10%. With a prospective dividend yield of 3.6% now on offer, I think the stock could be worth a closer look.

Did you spot this trade?

Another Woodford-owned dividend stock that I think offers excellent long-term value right now is tobacco manufacturer British American Tobacco (LSE: BATS). After a significant share price decline over the last 12 months, the FTSE 100 stock currently trades on a forward-looking P/E ratio of 14, which could be a bargain when you consider the company’s track record of generating shareholder wealth.

It’s worth noting that after dumping his entire holding in BATS in June last year (at a share price of over £50) on valuation concerns, Woodford has recently bought back into the tobacco giant at a much lower share price. Clearly, he sees more value in the stock now than he did last summer.

One appeal of British American Tobacco that he is no doubt aware of is its super dividend yield. The group has an outstanding track record of increasing its dividend over time, and City analysts expect another dividend increase this year, with a payout of 198.7p per share forecast. At the current share price, that equates to a prospective yield of 4.8%, which certainly looks attractive in today’s low-interest-rate environment.

Tobacco stocks aren’t without their risks (smoking rates are declining in Western countries) yet after a 25% share price fall over the last 14 months, I believe British American Tobacco shares offer an attractive risk/reward proposition at present.

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

With housebuilding demand on course to keep rising in the years ahead, I am backing Forterra (LSE: FORT) to generate exceptional profits growth for many moons to come.

Build rates in the UK have been lagging requirements for decades now, and politicians are only really beginning to cotton on to the scale of the problem as ‘Generation Rent’ swells in numbers. The Conservative government has vowed to take fresh measures to remedy the housing shortfall and it will need to maintain this commitment as it battles against falling voter numbers. And this bodes well for sellers of building materials like Forterra.

Indeed, the country’s second biggest provider of bricks, plans to fully utilise this favourable backdrop by dealing with bottlenecks at its facilities, while it is also drawing up plans to construct a jumbo new brick manufacturing facility.

The Northamptonshire business is already enjoying strong demand for its heavy construction products as housebuilder activity chugs steadily higher. It saw revenues rise 12.4% — or 10.4%, excluding the acquisition of precast concrete specialist Bison last year — to £331m. It said that this bubbly result was “due to strong demand in the new-build residential market leading to [a] double-digit increase in brick and aggregate block volumes.”

And critically, while Forterra is battling against a rising cost base, the positive market fundamentals are allowing it to successfully pass these larger expenses onto its customers.

Brick beauty

Against this backcloth City analysts are expecting the small-cap to deliver solid earnings growth of 8% in both 2018 and 2019. This, combined with the Forterra’s surging cash flows — operating cash flow jumped to £90.2m last year from £69.8m in 2016 — is expected to keep dividends swelling at a splendid pace too.

Last year’s 9.5p per share reward is anticipated to rise to 10.5p in the current period and again to 11.5p in 2019. Consequently investors can drink in chunky yields of 3.4% and 3.7% for this year and next respectively.

Despite its bright profits picture, Forterra deals on a forward P/E ratio of just 11.8 times. This makes it an irresistible pick right now, in my opinion.

Marketing star

Communisis (LSE: CMS) is another dirt-cheap small-cap on course to put out meaty dividends in the near term and beyond.

An anticipated 6% earnings improvement in 2018 leaves the company trading on a prospective P/E multiple of just 9.1 times. This bright bottom-line outlook also gives rise to predictions of further dividend growth with a predicted 2.9p per share reward, which is up from the 2.66p paid out last year and carrying a stunning 4.7%.

The good news spills over into next year as well, with an anticipated 7% profits rise giving rise to an estimated 3p payment. This means the yield leaps to a chubby 4.8%.

Communisis is an important marketing partner with major companies all over the world, and its ability to keep grinding out long-running contracts with such businesses convinces me that it should remain a lucrative stock for years to come.

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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.

Today I’ll explain why I remain bullish on these stocks, even after several years of growth.

Operating at capacity

The UK brick manufacturing industry is “operating at capacity” with “limited options for expansion”. That’s the view of Martin Warner, chairman of Michelmersh Brick Holdings (LSE: MBH).

Shares of this £64m firm edged higher today after the group said revenue rose by 26% to £37.9m last year. Underlying operating profit climbed 42% to £6.5m during the period. This implies an operating margin of 17.5%, highlighting the strong pricing power enjoyed by brick manufacturers at the moment.

Last year’s growth was helped by the £31.2m acquisition of brick-maker Carlton, which the company says has “significantly strengthened” the group’s market position. One downside to this is that this large deal left Michelmersh with net debt of £17.5m at the end of 2017, versus net cash of £4.7m one year earlier.

I estimate that it could take two years to reduce these borrowings to a more comfortable level. If the market slows during this time, shareholders could face elevated risks.

This could still be a buy

The outlook for 2018 seems safe enough at the moment. Mr Warner says that “2018 promises to be busy” and that the group’s order book, at 60m units, is “strong”.

Consensus forecasts suggest that earnings per share could rise by 40% to 8.2p this year, as the Carlton acquisition contributes a full year of profits. The dividend is expected to climb 44%, to 3.1p per share.

These numbers put the stock on a forecast P/E of 10, with a prospective yield of 3.7%. The shares remain attractive in my view, although I’d prefer a stock with less debt at this stage in the market cycle.

This Woodford pick has soared

One possible choice is brick and block maker Forterra (LSE: FORT). Shares in this firm have risen by 71% since its flotation in April 2016. It’s been a strong performer for fund manager Neil Woodford, but are the shares still worth buying?

Forterra around nine times larger than Michelmersh, measured by market cap and sales.

The group’s larger size means that acquisition opportunities are limited, but I’m not bothered by this. At this point in the market cycle, I’m happy to see management focusing on profitability and cash generation.

A cash machine

Last week’s 2017 results suggested that’s exactly what’s happening. The group’s underlying operating margin was largely unchanged at about 20% in 2017, but operating cash flow rose by 29% to £90m. This equates to 140% of operating profit, compared to 118% in 2016.

As a result, net debt fell by £31.5m to £60.8m, despite the firm spending £20m on the acquisition of Bison Manufacturing. Forterra now trades on a price/free cash flow ratio of 9, which is unusually low.

Analysts expect both earnings per share and the dividend to rise by about 9% this year. These forecasts put the stock on a 2018 P/E of 11.5, with a prospective yield of 3.5%.

I’d rate Forterra as a buy at these levels and would probably choose it over Michelmersh, thanks to the larger firm’s lower debt levels.

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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.

However, many investors are in this one for the long haul. After all, the company signs off its promotional video saying “Sirius Minerals. The future of fertilizer,” which is a mighty prediction to make, inspired no doubt, by the estimated 2.6bn tonne high-quality polyhalite potash resource that the company owns in Yorkshire.

Volatility ahead

But before Sirius can start mining and shipping its Poly4 multi-nutrient fertilizer product from Teesside to eager, pre-committed customers around the world, there’s the ‘small’ matter of building the mine and transportation systems, which is a massive and expensive construction project fraught with uncertainty. Long-term shareholders should hunker down ready for more volatility in the stock over the coming years – the share price is up over the past month, but my prediction is that it will fall again, then rise, then fall over and over again for some considerable time to come mirroring the ups and downs of the firm’s operational progress. So, I’m in no hurry to make a long-term commitment to the stock.

Highlights in the recent full-year report confirm that the construction project started during 2017 and that the firm has signed incremental supply agreements with customers for 4.4m tonnes per annum. Chief executive Chris Fraser said in the report: “Our world-class project based in North Yorkshire has the potential to disrupt the global fertilizer market and contribute substantially to the UK economy.” The story here is an exciting one, but with Sirius only just having entered into a design-and-build agreement with Canadian firm DMC Mining Services to sink the four shafts required for the project, there’s a long and winding road ahead before we see first profits.

Boring but good

Meanwhile, boring-but-already-profitable manufactured masonry products provider Forterra (LSE: FORT) delivered rather decent-looking full-year results today with revenue more than 12% higher than a year ago, adjusted earnings per share almost 17% up and adjusted operating cash flow rising more than 29%.

The strong cash flow performance enabled the firm to reduce its net debt by around 34% to £60.8m at 31 December 2017, which is a comfortable-looking 0.8 times the value of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA). The directors expressed their confidence in the company’s financial strength and the trading outlook by pushing up the total dividend for the year by 10.5% — nice!

Chief executive Stephen Harrison told us in the report that the main driver of revenue growth in 2017 was the new-build residential market together with the “strategically important” acquisition of Bison, which “has given us a leadership position in the precast concrete products market.” City analysts following the firm expect earnings to grow 6% in 2018 and 8% in 2019, which looks like steady progress. You can pick up the shares on a forward P/E rating a little over 109 for 2009 at today’s share price around 294p and there’s a 3.8% forward dividend yield. I think the firm is well worth your further research time.

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Kevin Godbold 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.

But IQE is not the only share I reckon could generate stunning returns for share selectors. Indeed, I reckon building materials play Forterra (LSE: FORT) is also in great shape to make you and I a packet.

And my faith has been reinforced by latest trading details released on Wednesday.

Sales stream higher

It declared today that “trading in the period has continued to be underpinned by good activity levels in the new build residential sector” and that, as a result, it has seen “double-digit growth of brick and aggregate block volumes for the 10 months to October 2017 compared with the same period last year.”

Excluding the September acquisition of pre-cast concrete specialist Bison, revenues at Forterra boomed 12% year-on-year between January and October, it said.

On the back of these bubbly numbers, it added: “Based on the good trading performance in the year to date and the forward order book, the board’s expectations for the full year remain unchanged.”

Profits flying

I am convinced that the long-term outlook is extremely bright. Whilst concerns quite rightly abound over the health of the UK construction sector, the residential market continues to power ahead  and the latest PMI report from IHS Market indicated a “solid increase in residential building work” in October, with the pace picking up from the prior month.

And Britain’s desperate need to build houses — exemplified by Chancellor Philip Hammond’s pledge to build 300,000 new houses per year by the mid-2020s earlier today — should keep demand for Forterra’s products ticking higher.

What’s more, the Northampton-based business is investing heavily to generate future sales growth. It has finished expanding its Claughton brick factory, work which has hiked production levels by 5m bricks per year (up 11% from prior levels). And thanks to its exceptional cash flows, it has the financial firepower to engage in more game-changing M&A action like we saw with Bison.

City analysts are predicting earnings advances of 9% and 12% in 2017 and 2018 respectively, estimates that leave the construction giant dealing on a bargain-tastic forward P/E ratio of 12.1 times.

And with the progressive dividend policy expected to keep yields shooting higher (these register at 3.2% for this year and 3.6% for 2018), I reckon the company is a very appealing stock for both growth and income chasers.

Another growth hero

Now the Square Mile’s army of analysts are not predicting earnings at IQE to rise by the same rate in the near term, an advance of 4% being anticipated for 2017.

But profits are expected to light up from next year as demand across its customer base picks up, and a 27% bottom-line swell is currently being predicted for 2018.

A forward P/E ratio of 53.1 times clearly looks toppy on paper. But in my opinion the prospect of stunning revenues growth from next year merits such a princely valuation.

The post IQE plc isn’t the only growth hero that could make you stinking rich appeared first on The Twelfth Magpie.

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