After selling its US food division in November for a total of $1.08bn, management informed the market at the beginning of December that the business would be returning some of these funds to investors. The group has decided to return a total of £509m by way of a tender offer at 195p per share, an 18% premium to the company’s closing price of 166p on Wednesday.

The maximum number of shares Greencore will buy as part of this tender offer is 261m, approximately 37% of its share capital.

Slimming down 

Greencore decided to sell its US business after a period of disappointing performances from the division. Management decided it was better to exit the US than try and turn the business around, which seems to have been a sensible decision. 

The group is now a stronger and leaner business, with management focused on growing operations here in the UK. “We will now focus all of our attention and resources on the significant growth opportunities that we see in the UK, both organic and inorganic,” Greencore’s CEO, Patrick Coveney told investors in the full-year results release.

Now the group has put its US mistake behind it, I think the stock is well placed to outperform in 2019. The shares are currently trading at an undemanding forward P/E multiple 11.7, and the tender offer should neutralise any drop off in earnings that comes as a result of selling the US business. 

On top of this, the stock supports a dividend yield of 3.4%. Management froze the per-share payout for the past three years as the company needed the extra cash to pay down debt. But now debt is under control, I can see payout growth resuming in the years ahead. 

Overall, after a year of consolidation, it looks to me as if 2019 will be the year Greencore makes a comeback.

Market-beating yield 

Another FTSE 250 dividend stock that’s on my radar for 2019 is Phoenix Group Holdings (LSE: PHNX). 

Phoenix is an exciting business. The firm acquires closed life assurance funds and then manages them through runoff. As the company specialises in this business, it can achieve economies of scale smaller peers cannot, which makes it the consolidator of choice in the industry.

The business model is also highly cash generative, which is great news for dividend investors. The company returns virtually all cash generated from operations to investors. For example, last year it distributed 45.1p per share, giving a dividend yield of 8%. This year, analysts have pencilled in a total distribution of 46p, providing a dividend yield of 8.2%.

Usually, a near-10% dividend yield would be a strong indication that the market believes the payout isn’t sustainable. However, in this case, I think the yield is so high because the market doesn’t understand Phoenix’s business model. It looks as if the distribution isn’t covered by earnings per share, but because of the way Phoenix accounts for profits, this metric is relatively misleading. Last year, the payout was covered several times by cash produced from the runoff of closed life assurance policies. I reckon this trend is set to continue.

The post Why these two FTSE 250 dividend growth stocks could beat the market in 2019 appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of and has recommended Greencore. 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.

Since this announcement, the shares have regained some composure, and today, the stock has jumped nearly 10% after the interim management statement was published. 

However, despite the recovery, I’d still dump shares in Greencore without delay.

Time to sell?

The last time I covered it (before the firm’s March profit warning), I concluded that, based on City growth estimates at the time, the shares appeared to be undervalued. Now I’m not so sure. 

Today, the company confirmed its forecast to grow earnings per share for the year (the City is forecasting growth of 18%), even though restructuring costs have taken a bite out of profit. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9.4% in the first half, and management believes the troublesome US business is now much better positioned to deliver an improved performance in the second half. 

The group expects strong organic growth for the rest of fiscal 2018 and management is so confident in the outlook it has increased the interim dividend by 4.8%.

But I’m not convinced. You see, while Greencore’s top line might be growing, the group’s bottom line, or more specifically cash conversion, leaves much to be desired. Adjusted EBITDA might have increased 9.4% to £87m for the first half, but cash generated from operations for the period was only £27m. Free cash flow was negative after deducting spending on capital projects. Based on these figures, it looks as if the company’s dividend distribution to investors was with debt, which in my view is a big red flag for dividend investors.

With this being the case, I’d dump this FTSE 250 dividend stock without delay. 

Falling income 

Another dividend stock I’d avoid is McCarthy & Stone (LSE: MCS). At first glance, this retirement home builder looks undervalued. The shares trade at a P/E ratio of just 7.8 and support a dividend yield of 4.4%. However, it seems as if the stock deserves this valuation as the company is struggling to grow.

In the six months to February, the business recorded a 52% decline in pre-tax profits to £11.5m and revenues only increased by 1%, despite average selling prices rising by 15%. There is also uncertainty surrounding McCarthy’s income stream from ground rents, a valuable source of income for the group. Around 4% of revenues came from related sales in 2016, and the total is expected to rise to £33m or approximately 7% of revenues for 2018.

And while McCarthy is struggling, the rest of the home building industry is powering ahead, which is not a good situation for the business. In fact, I believe that McCarthy is one of the weakest builders in the sector, and if you are looking for income and growth, one of its peers, such as Taylor Wimpey might be a better buy.

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

With that in mind, here are two stocks that appear to offer impressive income outlooks. They could also help you to overcome that threat of inflation.

Challenging period

Reporting on Tuesday was international convenience food company Greencore (LSE: GNC). Its share price dropped 25% after downgrading its outlook for the 2018 financial year. The business has experienced weak performance in its underutilised original sites in the US the first half of the current year. Alongside the timing of new business contributions and unfavourable exchange rates, this means that adjusted earnings per share is expected to be between 14.7p-15.7p, versus previous expectations of 15.7p-16.6p.

Clearly, the company’s profit warning is disappointing. However, its core UK and US operations continue to perform as per expectations. Therefore, it would be unsurprising if there’s a recovery over the medium term. That’s especially the case since the business appears to have a strong position within its key markets.

With Greencore’s dividend yield being around 4%, it offers a real income return right now. Its dividends were covered almost three times by profit last year and this suggests they remain highly sustainable at the present time. Therefore, while considered a more volatile share than many income investors would normally buy, the company could provide a high return in the long run.

Consistent performance

Also offering an inflation-beating outlook is housebuilder Barratt (LSE: BDEV). The company has enjoyed a period of strong growth in recent years and this looks set to continue. Government support for the housing market remains strong via the Help to Buy scheme in particular. This could lead to a continuation of the ‘purple patch’ housebuilders have enjoyed in recent years.

Improving financial performance could allow Barratt to deliver a rising dividend. The company currently has a dividend yield of around 7%, which is covered 1.5 times by profit. This suggests that not only could it offer an income return above and beyond inflation, it may provide dividend growth also ahead of even a fast-rising price level.

With Barratt due to report a rise in its bottom line of 6% this year and 5% next year, the company appears to have a positive outlook. Since it trades on a price-to-earnings (P/E) ratio of around 8.5, it appears to offer good value for the long term. And while the prospects for the UK economy remain uncertain, an imbalance between demand and supply in the housing market could lead to a prosperous future for housebuilders… and shareholders.

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Peter Stephens owns shares in Barratt. The Motley Fool UK owns shares of and has recommended Greencore. 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.

Profit from convenience

Dublin-based Greencore Group (LSE: GNC) is a major manufacturer of pre-packed sandwiches and ready meals for the UK and US markets.

The market for such products is massive and growing. Greencore is the UK’s biggest manufacturer of pre-packed sandwiches, producing more than 690m items each year. Sales of Food to Go products rose by 12.2% during the 13 weeks to 29 December, helping to lift UK revenue by 9.2% to £385.4m during the period.

The UK business is impressive and well established. But it’s already a market leader. Much greater growth potential exists in the US. Greencore has operated in this market since 2008, but took a big step up in scale at the end of 2016, when it acquired Peacock Foods for $747m.

An acquisition of this size takes time to digest and the group’s profits dipped last year. But this year’s results look more promising to me. US sales rose by 5.1% to £255.1m on a pro forma basis during the first quarter, with volume growth of 7%.

Capital spending is expected to fall this year, improving cash flow and positioning the group to start reducing debt levels.

Cheaper than a sandwich

At a last-seen price of 193p per share, Greencore stock is cheaper than a garage sandwich. It’s also likely to be a more satisfying buy, in my opinion.

This stock currently trades on a forecast P/E of 11.9, with a prospective yield of 3.1%. I’d rate the shares as a buy at these levels.

A sweet choice

Although Tate & Lyle (LSE: TATE) is often associated with the bags of sugar seen in every supermarket, these retail products are made under licence. The group’s main focus these days is producing sweeteners and other bulk ingredients for food manufacturers.

This company has had a difficult few years, including several profit warnings. But the outlook seems to be improving. The last few trading updates have all been positive and in line with expectations, suggesting performance is back on track.

The only ingredient that’s missing now is growth. Adjusted earnings are expected to rise by 5% to 49.3p per share this year. This puts the stock on an affordable P/E of 11.6, with a dividend yield of 5%.

This modest valuation may partly be due to an uncertain outlook for growth. Forecasts for 2018/19 suggest sales and earnings will be broadly flat, which could leave shareholders reliant upon the dividend for short-term gains.

It’s worth asking questions about growth, but in my view these concerns are not a reason to avoid this stock. The group’s balance sheet is strong and the 5% dividend yield should be covered comfortably by free cash flow and earnings.

I believe Tate has the financial capacity to make acquisitions, and it could even become a bid target.

If the core business continues to perform well, then I’m confident that management will find new opportunities for growth and shareholder returns. In the meantime, I’d rate this as a strong income buy.

The post 2 defensive dividend stocks I’d buy for uncertain markets appeared first on The Twelfth Magpie.

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Roland Head has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Greencore. 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.

Unfortunately, since then the stock has gone nowhere, but I believe it’s only a matter of time before the market wakes up to Greencore’s prospects. 

Indeed, today the firm announced yet another upbeat trading performance. For the 13 weeks to 29 December, the group recorded revenue growth of 53.6% on a reported basis to £640.5m, including the contribution from Peacock. Pro forma revenue grew by 7.2% in the quarter.

The group expects to book a one-off, non-cash, credit of approximately $28m in its income statement for 2018 thanks to the reduction in the US corporate income tax rate to 21%. The modification requires a revaluation of Greencore’s US deferred tax assets and liabilities as at September 2017. Going forward, the company’s US business will benefit from the lower rate of corporate income tax on future taxable earnings. 

Divestment to improve earnings 

Greencore also announced today that it had reached an agreement to sell its cakes and desserts business in Hull. The sale of this division was first suggested alongside the group’s full-year results due to the “challenging” trading conditions in the UK cakes and desserts business “characterised by business churn and high levels of inflation.” In other words, this disposal should help improve margins and streamline the business. 

City analysts are expecting Greencore to report earnings per share growth of 8% for the year ending 30 September 2018 and 7% for the following fiscal period as it capitalises on opportunities for growth. With earnings expected to grow at a high-single-digit rate, I believe that the stock’s current valuation of 12.2 times forward earnings undervalues the business and its prospects.

Undervalued tech play 

Another growth stock that I believe could be too cheap to pass up is ZPG (LSE: ZPG). It owns a number of consumer-focused websites including Zoopla, uSwitch, Money, PrimeLocation and Hometrack and City analysts are predicting explosive growth for the company in the years ahead. 

Earnings per share growth of 16% is pencilled in for the year ending 30 September 2018, followed by growth of 15% for the following period. And after the first quarter of the fiscal year, management seems to believe that the company will hit these targets. 

Today ZPG issued a trading statement ahead of its AGM, which noted: “The company has had a good start to the financial year across both divisions, with its websites and mobile apps attracting 53m average monthly visits during the period.” The update goes on to say “management remains comfortable with financial year 2018 market expectations.” Unlike almost all other trading updates, the market notification goes on to say: “Collated consensus figures for FY18 Revenue and EBITDA were £310m and £122m, respectively.”

Based on these numbers, shares in ZPG are currently trading at a forward P/E of 19.4, falling to 16.8 for fiscal 2019. While this valuation might look expensive compared to the broader market, its peer Rightmove is currently trading at a forward P/E of 25.2, and the more extensive Software & IT Services Industry is trading at a median P/E of 18.7. 

So overall, compared to its peers, and considering the firm’s steady growth rate, I believe ZPG’s shares look cheap. 

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of and has recommended Greencore. The Motley Fool UK has recommended Rightmove. 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.

And although the company’s valuation of 66 times 2017 consensus earnings looks as pricey as the day it floated, I still believe Fevertree is a fantastic company and stock to own for the long haul. Much of my enthusiasm stems from the fact that the company’s co-founders still run the show, which gives me confidence that they can repeat their stunning success in the UK overseas.

And although the company continues to reliably double its UK sales period after period, there is no doubt overseas markets will become the company’s most important if it is to live up to its lofty valuation. Its announcement in December that it was ceasing its relationship with a third party distributor in North America in order to to directly control the expansion of its brand there lends credence to this theory.

To date, Fevertree has had little trouble recording consistent double-digit sales growth in North America, but growth there has been nowhere near as impressive as at home. Yet the rewards are mind-boggling if increased management attention to the huge American market can make its cola or ginger beer as popular in the US as its tonics are in the UK.

This is a lofty goal, but Fevertree’s founder-led management team, asset-light business model, superior products and fragmented competition all leave me confident that the business will continue to grow by leaps and bounds to live up to its rich valuation.

Time to be contrarian? 

A  domestic business with a more down-to-Earth valuation that also sees great potential in the US is food-to-go manufacturer Greencore (LSE: GNC). Dublin-headquartered Greencore is already the UK’s largest provider of ready made sandwiches and meals to the grocery sector and bulked up its operations Stateside last year through the $747m purchase of Peacock Foods.

This deal was transformative as it not only bulked up the company’s manufacturing facilities in the country, enabling the group to handle larger contracts for bigger customers. In addition, it opened up access to the vast US grocery market for the first time via legacy contracts with consumer goods giants such as Tyson.

The aforementioned contracts with Tyson have turned out to be a bit of a mixed blessing for Greencore though, as that company’s purchase of a rival food-to-go manufacturer has sparked fears that it will end contracts with Greencore. But with the two having co-invested in factories and having long-term contracts, there’s little fear of this happening out of the blue.

And with the business in the US growing volumes nicely and winning contracts, combined with stellar double-digit growth at home, market nervousness has made Greencore look incredibly cheap to me at 13 times forward earnings.

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Ian Pierce has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Greencore. 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.

For example, even though City analysts are currently expecting the firm to report a pre-tax profit of £1bn for 2019, this is nothing compared to the group’s expected turnover of £59bn. These figures give a net profit margin of 1.7%. 

But while Tesco’s margins are razor thin, the retailer’s suppliers are much better off. 

A better business 

Greencore (LSE: GNC) is one of the UK’s largest food producers, and Tesco is one of its clients. The firm manufactures convenience food such as sandwiches and sushi, along with dips and sauces. Over the past five years, the company has gone from strength to strength with revenue nearly doubling and net profit rising from £19m for 2011 to £47m for 2016. 

Greencore has used its position in the market to grow both organically and through acquisitions. Its latest buy was the $745m deal to acquire US-based Peakcock Foods, which helped the firm report a 57% increase in revenue for the for the year to September 29.  

Unfortunately, costs associated with this deal have weighed on profitability. According to Greencore’s full-year results release, issued today, pre-tax profit for the year fell sharply to £12.4m from £48.2m due to exceptional costs of £78.2m. Nonetheless, despite these headwinds, revenue for its UK & Ireland operations was up 12% on a pro forma basis year-on-year. Adjusted operating profit rose 2.6% to £106m as the US business posted a revenue rise of 5.9% on a pro forma basis, while operating profit was £33.3m after a loss of £2.1m last year.

Returning to growth

I believe Greencore’s year-end figures show precisely why the company is a better buy than Tesco. 

As the UK’s largest retailer struggles to gain traction in a competitive market, Greencore’s size and experience is helping it continue to grow despite headwinds. After the integration of Peacock is complete, profit growth should return, and analysts have pencilled in a pre-tax profit of £148m for the year ending 30 September 2018. Based on this estimate the shares are trading at a relatively attractive forward P/E of 11. 

In comparison, Tesco is currently trading at a forward P/E of 18.4, which I believe is too expensive when you take into account all of the risks now facing the business. With profit margins below 2%, the retailer does not have much room for manoeuvre if another price war kicks off in the sector. 

Also, while management’s efforts to cut costs have yielded some results, it’s not clear how much more can be taken out of the cost base. If the discounters go on the offensive again, Tesco may find itself in a precarious position. For that reason, I don’t believe that it’s worth paying a premium for the shares.  

Overall, considering Greencore’s position in the market and growth potential, I believe that the company is a much better buy than Tesco. 

The post One stunning growth stock I’d buy ahead of Tesco plc appeared first on The Twelfth Magpie.

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

The financial services star therefore remains locked at recent two-month highs following a stellar run in the lead-up to today’s release. And I would not be surprised to see it resume its upward path in the very near future.

Tatton, which provides on-platform discretionary fund management (or DFM) and IFA support services, advised that trading came in line with expectations between April and September. At its on-platform DFM division funds under management stood at £4.44bn at the end of the period, up from £3.85bn six months earlier.

The result prompted chief executive Paul Hogarth to declare: “This growth is further evidence of the increasing demand for a low cost DFM service to the mass affluent market place served by the IFA sector, which the group is ideally placed to capitalise on.”

The Cheshire-based business has witnessed terrific fund inflows at a run-rate exceeding £80m per month, although the performance of its DFM division was not the only cause for celebration. Indeed, member numbers at Tatton’s Paradigm Partners IFA services arm increased to 356 IFA businesses as of September from 352 in March. And at Paradigm Mortgage Services the number of mortgage firms swelled to 1,143.

Dividends dancing higher?

Against this backcloth it is hardly a shock to find brokers predicting great earnings growth at Tatton in the present year and beyond.

For the period concluding March 2018 the firm is predicted to deliver earnings growth of 6%, and surging business flows are expected to drive growth to 19% in fiscal 2019. I reckon a forward P/E ratio of 20.4 times is fair value given the serious momentum seen across Tatton’s operations.

And there is a lot for dividend seekers to sink their teeth into, these predictions of meaty profits expansion being predicted to feed into very-healthy yields. An anticipated 6.5p per share dividend for this year yields a terrific 3.5%, while a projected 7.8p dividend for 2019 yields 4.1%.

Gobble up Greencore

I also reckon those seeking hot dividend expansion could do a lot worse than check out Greencore (LSE: GNC).

City analysts are expecting earnings to have fallen 2% in the period ending September 2017, although this is not predicted to have put paid to Greencore’s progressive dividend policy — a reward of 5.9p is currently anticipated, up from 5.47p last year.

And assisted by an anticipated return to earnings expansion in the current year (an 11% increase is projected), shareholder rewards are expected to rise to 6.3p. As a result the yield clocks in at a decent 3.4%.

Greencore continues to witness solid demand growth in both the UK and US, with the ‘Food To Go’ foods segment driving business at home, and recent acquisition activity Stateside boosting revenues there. As a result sales on a pro forma basis popped 11.8% higher during quarter three of the last fiscal year, to £636.5m.

I reckon Greencore is a great pick right now given its impressive sales outlook, and particularly in light of its ultra-low forward P/E ratio of 10.8 times.

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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 Greencore. 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.

Everybody has to eat 

Despite increasing earnings by more than 60% over just the past five years, shares of Greencore are trading at a relatively sedate 13.5 times forward earnings. This low valuation comes despite continued record-breaking profitability from its UK operations and a large acquisition in the US that has given it profitable size and scale on both sides of the Atlantic. 

This acquisition is the reason shares are trading so cheaply as its largest customer, US food giant Tyson, recently bought a competitor, stoking fears that it will drop its contract with Greencore in favour of the new in-house option. However, I believe fears about this are overblown as the two have co-invested in a factory and breaking this long-term contract would be both costly and incredibly disruptive; it’s highly unlikely Tyson could take over manufacturing without a very quick and very costly expansion of its production facilities.

Leaving aside the Tyson contract fears, Greencore is also performing incredibly well. In Q3, group revenue clocked in at £636.5m, 11.8% ahead of the year prior on a pro forma basis. This came from growth in both divisions with the UK business trading 15.3% ahead year-on-year (y/y) while US sales were up 6.6% y/y due to expanded contracts with existing customers and finding new customers.

Looking ahead, there’s good reason to expect this growth to keep up as the food-to-go market in the UK is still expanding and Greencore’s new acquisition Stateside will, for the first time, allow it to sell directly into grocery stores. All told, with a good balance sheet and a strong record of sales and margin improvement, I think Greencore’s shares are very attractively priced today.

Patience pays off 

I’ve also got my eye on Mountview, a family-run company that buys up buildings with rent-controlled flats, waits until their tenants leave (a process that can take many years), and then sells them on at market rates. This is by necessity a long-term business and earnings can be choppy as buildings go up for sale on a irregular basis. But the company has a great record of success and I reckon its shares are attractively priced at just 12 times trailing earnings.

In fiscal year 2017, the company’s revenue shrunk 2% y/y and pre-tax profits fell 7% y/y. But these challenges mainly reflect downward property valuations due to Brexit and a strong comparative period the year prior due to a rush to buy property before stamp duty increases went into effect. Wisely, management kept dividends level at 300p per share although these payouts were still very safely covered by earnings per share of 929.1p.

The fact that management was able to keep earnings and dividends remarkably high even in a challenging year shows just how well run the business is. With a constantly replenishing group of assets, a very healthy balance sheet with just 8.5% gearing, and a management team with plenty of skin in the game, I reckon Mountview is a great stock to own for the long term.

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

The security and surveillance specialist advised that revenues rose 5% higher during December-May, to £33.7m, a result that powered pre-tax profit to £1.3m from £0.2m a year earlier. This prompted the company to affirm its expectations for the full year ending November 2017.

Synectics advised that it has clocked up new orders worth £41.8m in the first half, up from £38.4m in the corresponding period last year. And this powered the company’s order book to £33.7m, up 28% from the end of fiscal 2016.

This stellar performance has encouraged the AIM business to shell out a 1p per share interim dividend, the first midway payment for four years.

A pretty picture

And Synectics has painted a promising picture looking ahead, commenting that “the market for high-end electronic security and surveillance worldwide is fundamentally strong and likely to remain so.”

While the company cited current economic and political uncertainty as a reason for caution, it added that “the state of Synectics’ current contracts and order book give us confidence that the Group’s prospects for the remainder of this financial year and beyond are good.”

The City expects it to keep making tracks and expects earnings at the Warwickshire business to rev higher in the coming years — rises of 10% and 33% are pencilled in for this year and next.

I reckon a subsequent forward P/E ratio of 16.2 times is decent value given Synectics’ ample growth opportunities as the emphasis on surveillance grows. And the AIM play also offers plenty of reward to dividend chasers, at least if broker projections are to be believed.

A 4p per share payout is forecast for fiscal 2017, up from 2p last year and yielding 1.8%. And the yield leaps to 2.6% for next year thanks to predictions of a 6p dividend.

Food favourite

Greencore (LSE: GNC) is another stock expected to remain a hit for growth hunters.

Sure, earnings expansion is expected to slow to a trickle in the current fiscal year ending September 2017. But the bottom line is anticipated to crank back into life from next year thanks to a bright outlook in its UK and US marketplaces, helped by recent acquisitions and the massive investment it has made in its manufacturing and distribution capabilities. An 11% profits rise is currently anticipated for 2018.

This results in a very attractive prospective P/E multiple of 13.3 times. And the food manufacturer also provides plenty of potential for income chasers.

Greencore’s dividend of 5.47p per share last year is expected to leap to 5.9p in fiscal 2017, resulting in a 2.5% yield. And a further dividend hike is predicted for next year, an estimated 6.4p reward driving the yield to 2.8%.

I reckon Greencore could prove a very lucrative share selection in the years ahead.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Greencore. 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.