To show you what I mean, I’m going to look at two FTSE 250 stocks which I believe have the potential to deliver a market-beating mix of growth and income.

Strong profit growth

Marine services group James Fisher & Sons (LSE: FSJ) has been in business for 170 years. But the group has changed greatly over this time. Its main focus is now on providing a range of specialist and essential services for the energy and transport industries.

Despite the oil market crash, Fisher shares have hit all-time highs since 2015. Today’s interim results revealed that the group’s underlying pre-tax profit rose by 6% to £18.6m during the first half. The interim dividend will rise by 10% to 9.4p.

Rising demand

Nick Henry, the group’s chief executive, says that a combination of new renewable energy projects and an increase in oil and gas-related activity means that the second half should be stronger. Mr Henry expects “a good improvement in the result for the year”.

Fisher shares rose by 3% when markets opened this morning. This suggests to me that today’s figures and the firm’s full-year guidance were slightly better than the market expected.

Based on current consensus forecasts, James Fisher stock trades on a forecast P/E of 18 with a prospective yield of 1.9%. Although this isn’t cheap, I believe Fisher is likely to continue performing well and could reward buyers at current levels.

Boring but profitable

The engineering business of Hill & Smith Holdings (LSE: HILS) is even less glamorous than that of James Fisher. But it’s very profitable. This £1bn company specialises in making products used when building roads and utility infrastructure.

Examples include street lighting, crash barriers, steelwork for bridges and fencing. These may sound like generic products, but in many cases they’re required to meet tough regulatory standards. They’re not easily substituted with cheaper alternatives.

The group’s recent half-year results confirm the appeal of its business. Sales rose by 6% on a constant currency basis, while underlying operating profit was 13% higher, at £38.8m. The group’s operating margin rose by 0.8% to 13.3%.

Shareholders were rewarded with an 11% increase in the interim dividend, which rose to 9.4p per share. It’s worth noting that dividend growth at this group has averaged 15% per year since 2011, and the payout has not been cut since at least 2002. It’s a reliable income stock.

Strong outlook

The group gets more than 80% of sales and 87% of its underlying operating profit from the UK and US. Management expects both of these markets to see significant infrastructure investment over the next few years, providing a strong outlook for growth.

City analysts expect Hills & Smith’s underlying earnings to rise by 10% to 72.2p per share this year. This puts the stock on a forecast P/E of 18, with a potential yield of 2.3%. As with James Fisher, I believe it could be worth paying this price now to get access to the long-term growth potential of this quality business.

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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. 

John Menzies (LSE: MNZS) was making headlines in Monday business after it decided to bang a planned merger with DX Group (LSE: DX) on the head.

The firms had been examining a tie-up since March, and in June a deal was struck that would have seen DX snap up Menzies’ distribution operations for £40m in addition to new shares worth 65% of the new company.

However, DX’s worrisome trading update in July, in which it advised it expected EBITDA to flatline in the fiscal year ending June 2016, forced Menzies to undertake additional financial due diligence. These steps had forced the company to conclude that “the combination would be required to be effected on revised terms,” it advised today.

And the Edinburgh business has decided to pull the plug in light of these developments. It commented that it “does not believe it is currently possible to agree a revised set of terms with DX for the combination which would be in the interests of John Menzies shareholders.”

The company “has therefore terminated discussions with DX,” it said.

Menzies added that there remains strategic merit by separating its Distribution and Aviation divisions into two independent businesses however, as well as the potential to create shareholder value.

Ready to fly?

While latest developments have prompted it to go back to the drawing board, Menzies still looks like an attractive destination for growth investors.

The City expects it to flip back into the black from the losses of recent years, with consensus suggesting earnings of 54p per share in 2017. And this predicted spurt is not expected to be a flash in the pan either, with an 11% bottom-line improvement is predicted for next year, to 61p.

I reckon a subsequent forward P/E ratio of 12.9 times is excellent value given the company’s resilience in tough markets. The business saw revenues at Aviation soar 12% during the four months to April, it announced in May, while it also noted that “contract gain momentum has continued with notable wins across each region.” And its Distribution arm was also trading in line with expectations, Menzies said.

I believe the company’s low valuation could leave room for further share price strength, particularly should the next set of financials (first-half numbers are slated for Tuesday, August 15) impress.

Road warrior

Hill & Smith (LSE: HILS) is another stock tipped to be a great bet for growth hunters.

The number crunchers expect demand for the FTSE 250 firm’s signs, barriers and assortment of other roadside decorations to keep driving northwards. And as a result, earnings are predicted to grow 10% in 2017, and by another 5% next year.

The Solihull business may not carry the same sort of value as Menzies however, its prospective P/E ratio of 18.9 times hovering above the broadly-considered value benchmark of 15 times.

But this should not necessarily deter investors, in my opinion, as Hill & Smith picks up traction at home as well as in the US — revenues were a record £291.8m during January-June, it advised last week, up 6% at constant currencies. And I anticipate that the top line will keep on bulging as infrastructure investment increases in both of the company’s key markets.

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Still, I view this as nothing more than light profit-booking after recent strength, allied with the lack of anything ‘spectacular’ in today’s release. Hill & Smith’s steady share price ascent sent it to record tops close to £14 per share just this week.

The company, which makes bridges, barriers and road signage, advised that trading during the period from January 1 to April 30 matched the company’s expectations. Revenue clocked in at £191.3m, up from £165.4m a year earlier and up 7% on an organic basis.

In its core UK market, the engineer advised that “demand for our temporary safety barriers, variable message signs and bridge parapets remains solid and ahead of prior year” as the government’s Road Investment Strategy drove sales of its hardware.

And looking elsewhere, demand for Hill & Smith’s goods from the UK and US utilities industries remained solid, the company noted, while sales to its other international customers exceeded expectations.

Lauding the results, chief executive Derek Muir commented that “the group has delivered a solid start to the year despite mixed end market conditions.” He added that “overall, conditions in many of our infrastructure markets remain favourable and we continue to expect to report good progress in 2017 in line with our expectations.”

Growth star

There is certainly plenty to be excited about at Hill & Smith, in my opinion, as the massive investment made in Britain’s road network promises to keep sales of its roadside fixings moving steadily higher. And the firm’s improving performance on foreign shores also provides plenty of reason for cheer.

The Solihull business has seen earnings grow by double-digits in recent years, and the City expects further expansion of 10% and 5% in 2017 and 2018 respectively. While slightly expensive on paper, I believe Hill & Smith’s P/E of 18.3 times remains great value given its impressive momentum.

High risk

Like Hill & Smith, Pets At Home (LSE: PETS) has also found itself on the back foot in Thursday trade, the retailer shedding 6% of its share value.

But unlike its FTSE 250 peer, I am less than enthused by the firm’s investment prospects. Indeed, the City certainly expects recent earnings growth at the firm to skid to a halt as conditions in the UK retail sector become increasingly pressured by rising inflation, and brokers expect the business to punch another marginal decline in the year to March 2018.

I reckon investors should shun Pets At Home, despite its ultra-low forward P/E ratio of 11 times, as downgrades to this year’s projections (not to mention to 2019’s predicted 3% earnings recovery) are extremely likely. Latest ONS data showed retail sales in the first quarterly fall since 2013 during January-March.

In this environment it is not difficult to see discretionary spending on bones, collars and grooming sessions falling in the months to come, and with it, takings at Pets At Home.

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Ambitious strategy

Multinational sports betting and gaming group GVC (LSE: GVC) reported upbeat results on Thursday. They showed that the company’s ambitious growth strategy is working well. The acquisition of bwin.party in February 2016 boosted the company’s performance last year. The integration has proved successful so far, with improved stability and a wider product offering helping GVC to post improving financial performance.

In fact, its revenue increased by 8% and EBITDA (earnings before interest, tax, depreciation and amortisation) moved 26% higher. It expects more positive performance this year, with earnings forecast to move 72% higher. This is due to be followed by growth of 25% in 2018, which means the company’s dividend could be set for a rapid rise. GVC is due to yield as much as 4.2% in 2018, with dividend growth beyond next year highly probable as a result of the dividend being covered almost two times.

While the gaming sector is undergoing a period of rapid change, GVC seems to have the right strategy to cope. Further synergies from the bwin.party acquisition should help to boost its performance, while a diversified business model should help it to overcome any challenges posed by Brexit. Therefore, it seems to be a sound buy even after its 12% share price gain since the start of the year.

Reliable growth

Also making gains since the start of the year has been infrastructure products and galvanizing services specialist Hill & Smith (LSE: HILS). Its shares have risen by 7% in the year-to-date and, judging by the company’s reliable track record of growth, more gains could lie ahead.

In the last five years, Hill & Smith has increased its bottom line at an annualised rate of over 13%. This has allowed it to deliver a dividend increase in line with profit growth, due partly to the relatively consistent performance of the company. Its earnings have grown in each of those five years, and are forecast to do the same in 2017 and 2018. This should allow for further dividend growth over the medium term, since shareholder payouts are currently covered 2.5 times by profit.

While Hill & Smith may only yield 2.2% at present, its potential for rapid dividend growth could lead to improved investor sentiment as inflation edges higher. In addition, its price-to-earnings (P/E) ratio of 17.9 indicates fair value for money, given its relatively high chance of strong earnings growth in future.

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The company has seen its bottom line swell at an annualised rate of 11.2% during the past five years alone. And with the UK government steadily stepping up investment in the country’s road network, demand for Hill & Smith’s products looks set to keep riding higher.

Indeed, Hill & Smith’s full-year trading statement released on Wednesday was treated with plenty of fanfare, a 6% share price advance pushing the stock to three-month peaks. Hill & Smith advised that revenues blasted 16% higher during 2016, to £540.1m, which is the company’s best result on record. And this propelled pre-tax profit to £68m, up 28% year-on-year.

Celebrating the results, chief executive Derek Muir commented that “our performance continues to be underpinned by our tried and tested strategy of international diversity together with the leading positions our businesses hold in their respective markets.”

And with infrastructure investment still rising, Muir added that “despite political and macro-economic uncertainties, 2017 is again expected to be a year of progress.”

City brokers certainly share my bullish take on Hill & Smith, and have chalked in earnings growth of 5% and 3% in 2017 and 2018 respectively.

Subsequent P/E ratios of 17.5 times and 17 times sail above the benchmark of 15 times regarded as conventionally good value. Still, I reckon investors should give short shrift to these slight premiums considering the company’s robust revenues outlook at home and abroad.

Brand heavyweight

Unilever’s (LSE: ULVR) vast portfolio of products can be matched by few others.

It is the immense diversity and pulling power of labels from Walls ice cream and Flora margarine through to Dove soap that tempted Kraft Heinz to make its mammoth $143m takeover bid last month, and it could well encourage the US giant to return sooner rather than later following this first rejection.

Despite experiencing a sales deceleration during 2016, the strength of Unilever’s brands still helped the group’s like-for-like sales grow 3.7% during the 12 months. And the business continues to throw huge sums at product innovations and brand roll-outs in new territories to keep sales on a northward tilt.

Such an approach has already delivered steady earnings growth at the London business, allowing the top line to keep growing despite pressure on shoppers’ wallets. And the number crunchers have slated further expansion in the medium term at least — rises of 10% in 2017 and 9% in 2018 are currently expected.

Like those of Hill & Smith, these figures create slightly-toppy P/E ratios of 22.5 times and 20.7 times respectively. But I reckon the evergreen allure of Unilever’s, added to the protection afforded by the manufacturer’s huge geographic footprint, more than warrant such high figures.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

AA

AA (LSE: AA) has risen by over 5% today after releasing a positive trading statement. It notes that the company is trading in line with expectations and has arrested the decline in personal member numbers in recent months.

In fact, AA recorded growth in membership in the first half, which is reflective of the success of its new strategy where the company has improved brand advertising, added additional benefits to the membership proposition and focused on greater digital engagement with customers.

On the topic of digital applications, AA’s relationship management system is now fully operational and the company continues to build its digital profile. Its roadside assistance app is seeing increased usage, which leads to not only a better customer experience but also greater efficiency for the business.

AA expects Brexit to have a minimal impact on its business and with its shares trading on a price-to-earnings (P/E) ratio of 10.8, it seems to offer good value for money. Furthermore, its earnings are due to rise by 11% next year and this could act as a positive catalyst on its future share price.

Hill & Smith

Infrastructure and galvanizing specialist Hill & Smith (LSE: HILS) has also updated the market today, with its sales rising 6% in H1. With operating margins rising by 170 basis points to 13%, Hill & Smith has recorded a 20% increase in operating profit. And due to 90% of operating profit being derived in the US and UK, where infrastructure investment spending remains relatively high, its medium-term outlook continues to be positive.

Hill & Smith has also announced the £12.5m acquisition of Signature, which specialises in road sign and traffic management systems. This should complement its existing product offering and contribute to positive earnings growth.

On this topic, Hill & Smith is expected to grow its earnings by 18% in the current year, which could act as a positive catalyst on investor sentiment and on its share price. And with it having a price-to-earnings growth (PEG) ratio of just 1, its upside potential seems high.

Portmeirion

Ceramic tableware and cookware specialist Portmeirion (LSE: PMP) has today released a rather disappointing set of first-half results. Although sales rose by 2% versus the prior year’s period, pre-tax profit fell by 22% during what was a highly challenging six months for the business. It has seen a reduction in demand from some of its Asian markets and while it sees this as a short-term issue, investor sentiment could come under further pressure in the weeks and months ahead.

However, looking ahead to next year, Portmeirion is expected to return to growth. Its bottom line is forecast to rise by 18% and with its shares trading on a PEG ratio of 0.8, it seems to offer excellent upside potential. Furthermore, its completion of the acquisition of Wax Lyrical for £17.5m could positively catalyse its earnings and this makes now a good time to buy Portmeirion for long-term investors.

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The largest US producer of chromic acid warned last week that a strong dollar will hurt its 2016 export potential, and that slowing oil prospecting in the US means it can sell less of its product, which is used in the oil extraction as well as in the personal care industry.

It won’t get any easier 

This situation won’t turn around any time soon, because oil is likely to remain a problem area, as is the US dollar. These are two very significant factors undermining the potential of this otherwise great company, which was originally part of the Harrisons & Crossfield commodities trading group.

It seems to me that Elementis will not recover any time soon, but might see marginal improvement in its share price, which hit a new 52-week low (£207.30) last Thursday (7th January), if the dollar happens to play in its favour. And that is a big if.

Massive export risks

A strengthening dollar is a more likely possibility in 2016, and with up to 40% of Elementis’ US output being earmarked for export, FX risks are considerable, as is testified by producers from Russia and Kazachstan already making inroads into Elementis’ markets.

In recent months, most analysts have revised downward their target price for the stock, as the company first warned of problems last June. It is easy to believe that these revisions reflect the problems already, but the market is telling us another story. At the current P/E of only around 9.8, the company might offer long-term potential; however, time is not on the side of Elementis — the longer these external factors impact the company, the less competitive it will ultimately become.

Hill & Smith Holdings

A better pick in my opinion is Hill & Smith Holdings (LSE: HILS). Recent developments in global stock markets combined with the floods in North England warrant a re-examination of this stock. The road building company, which manufactures and supplies infrastructure products for utilities and roads and offers galvanizing services, will benefit from the repair work that inevitably will emerge soon.

Flood repairs

Flood repairs are estimated to amount to £2.3 billion. Hill & Smith’s infrastructure products’ road segment is especially likely to benefit from this, as it is involved in supplying temporary and permanent safety products to customers involved in the construction or maintenance of national roads infrastructure.

UK to invest £80 billion in infrastructure 

This comes on top of the planned re-launch of the powerful Road Fund by Chancellor Osborne, who has said he will scrap green car subsidies and put this money into UK roads. Earlier this week, Reuters quoted analysts as saying that the amount of the UK’s total infrastructure investments up to 2020 is £80 billion.

Outperformer

Hill & Smith Holdings trades at a P/E of 29 and, even though this is high, it reflects a strong trading year in 2015 and sound fundamentals. There is little doubt to me that the company is on track to meet or surpass its full-year expectations. The industrials sector company has seen its share price rise by around 21% over the past year alone. I believe it is a solid defensive play as well as an excellent growth opportunity.

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The road to brilliant returns

Highways maintenance specialists Hill & Smith (LSE: HILS) greeted the market with a cheery update in Tuesday trading, sending shares in the business 3.6% higher. The Solihull firm advised that “trading during [July-October] has continued to be robust,” noting that its broad geographical and market spread continues to give it strength.

Accordingly Hill & Smith affirmed its full-year guidance for 2015, and I expect the company — which provides gantries, barriers and an assortment of other road-related hardware — to continue to enjoy strong sales growth as the UK government doubles-down on roadbuilding. In addition to this, the purchase of signbuilder Tegrel this month drastically improves Hill & Smith’s supply chain and thus ability to service the needs of Highways England.

Against this backcloth the City expects Hill & Smith to follow an anticipated 8% earnings bounce this year with a 7% improvement next year, pushing an already-attractive P/E rating of 13.2 times to just 12.4 times. On top of this, projected dividends of 19.9p per share for 2015 and 21.7p for 2016 produce chunky yields of 3.1% and 3.4% correspondingly.

Plenty of hard work ahead

Things over at DIY play Kingfisher (LSE: KGF) are not so rosy, however, and yet another troubling update left the retailer dealing 0.3% lower from Monday’s close. Despite positive British retail conditions pushing domestic like-for-like sales 4.6% higher in August-October, conditions on the continent remained a problem and French underlying sales edged just 0.1% higher.

As a result Kingfisher — which operates the B&Q and Screwfix chains in the UK — reported a profit of £223m, missing broker forecasts by some distance. And although the retailer advised that restructuring is rattling along nicely, I believe soft trading conditions in France continue to cast a pall over the company. To add to Kingfisher’s overseas woes, adverse currency movements during the period dented non-sterling profits by a chunky £17m.

The number crunchers expect Kingfisher to report a 3% earnings advance in the year to January 2016, and an 11% rise is forecast for 2017. These figures leave the retailer dealing on reasonable P/E ratings of 16.3 times and 14.7 times for these periods, while estimated dividends of 10.2p and 11.1p for 2016 and 2017 respectively produce handy yields of 2.9% and 3.2%.

Still, I do not find these levels particularly attractive given the huge obstacles Kingfisher faces on the continent.

Neither shaken nor stirred

Movie and munchies play Cineworld (LSE: CINE) was recently dealing 0.2% in deficit in Tuesday despite releasing yet another bubbly trading statement. The picture house saw box office revenues leap 10.8% between January and mid-November and, helped by the enormous popularity of Bond flick SPECTRE, the business advised that the fourth quarter has got off to a strong start.

Furthermore, with The Hunger Games: Mockingjay Part 2 and Star Wars: The Force Awakens slated for release in the coming weeks, Cineworld said it remains confident that it will meet its full-year profit forecasts.

With Cineworld also continuing its bold expansion plans — the business has opened a further three sites in the UK in the second half, and seven in Central and Eastern Europe and Israel — and a bulging list of blockbusters scheduled for next year and beyond, I fully expect revenues to carry on surging.

This view is shared by the ‘Square Mile’, and anticipated earnings growth of 15% and 10% for 2015 and 2016 correspondingly leave Cineworld dealing on P/E ratios of 19.2 times and 17.4 times for these years. I believe the company’s stunning growth outlook justifies this slight premium, while anticipated dividends of 15.5p and 17.1p for 2015 and 2016 correspondingly — yielding 2.9% and 3.2% — sweeten the investment case.

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Royston Wild owns shares of Cineworld Group. 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.