Why have Ibstock shares fallen so heavily?

The recent fall in the Ibstock share price hasn’t really been surprising. Construction sites around the UK were forced to close for a couple of months, and demand has been suppressed since. The uncertainty within the UK economy has also weighed the cyclical business down heavily.

In fact, the recent trading update clearly demonstrated the impact of the pandemic. Total revenues decreased by 36%, and the firm reported an underlying loss before tax of £11m. This was in comparison to a £42m profit last year.

The FTSE 250 stock also finished the half with net debt of £103m, which is up 66% year-on-year. While covenants have been waived, and this is not an unsustainable amount of debt, it could still hinder any future progress for the group.

What does the future hold?

Despite this recent poor trading update, there are some reasons for optimism. Firstly, it looks as if the government are going to invest more money into building homes and key infrastructure. As a market leader in the UK construction industry, Ibstock is in a strong position to profit from this initiative.

The group has also endeavoured to cut costs over this period. This includes closing three factories, slashing capital expenditures, and introducing some restructuring efforts. While this suggests that management are preparing for an extended period of reduced demand, it should also increase its long-term resilience. As a result, it seems wise to buy the FTSE 250 stock during these challenging times, in preparation for a recovery.

Will the FTSE 250 stock pay a dividend?

Excluding the special dividend, Ibstock paid 9.7p in dividends last year. At its current price, this would equate to a current yield of over 6%. While the dividend is suspended at the moment to help conserve cash, I believe that it will be reinstated at some point next year. This is provided that the firm sees sufficient demand for its products and is able to reduce some of the debt that has been added recently.

Overall, I believe that Ibstock is one of the cheapest FTSE 250 stocks on the market. Although there are a number of headwinds to overcome, it looks strong enough to cope. Hopefully, the government’s priority of building in the coming years will also lead to strong gains for the brick manufacturer. At its current price, I would say that it’s a bargain not to be missed!

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Stuart Blair owns shares in Ibstock. The Motley Fool UK has recommended Ibstock. 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’m going to highlight three of these opportunities, which all support dividend yields of 5% or more.

Booming market

My first pick is brick producer Ibstock (LSE: IBST). The design, manufacture and sale of bricks might not seem like a tremendously exciting business, but it is an essential one.

Ibstock manufactures bricks both here in the UK and in the US. It has been using its size and experience to grab market share and boost earnings over the past five years.

Since 2013, net profit has soared from £9.8m to £76m. In 2015 when the company went public, management started the dividend at 4.4p per share, and it has since risen to 16p. Based on current City projections, the stock offers a forward dividend yield of 5.7% and the distribution to investors will be covered 1.3 times earnings per share.

As long as the world’s population continues to expand, and the demand for housing grows with it, the need for bricks will only grow as well. That’s why I reckon Ibstock will remain a great income stock to buy and hold for the next decade.

Trusted lender

The second buy-and-forget stock that’s on my radar is Close Brothers Group (LSE: CBG).

Close Brothers is a banking and wealth management specialist. Over the past six years, earnings per share have grown at a compound annual rate of 7% as it has carefully invested profits back into its operations to expand in the markets it knows best. This careful expansion is one of the reasons why the financial services group’s return on equity has averaged 16.6% for the past five years (compared to the industry average of 10%).

If management continues on this course of careful, calculated, growth in the firm’s core markets, I reckon the business will continue to grow for many years to come.

These calculated expansion efforts have also allowed the company to up its dividend steadily. Close Brothers’ dividend per share has increased at an average of 6.1% per year since 2014, and the stock currently supports a dividend yield of 5.1%. The payout is covered twice by earnings per share.

Financial champion

My last pick is the hedge fund group Man (LSE: EMG). It is often said hedge fund owners make more money for themselves than for the investors who entrust them with the management of their money, so if you want to make money, one of the best strategies, in my opinion, is to own a hedge fund. You can do just that with Man.

Man earns money from clients with both regular management fees and performance fees, which can be lumpy. Still, despite this fact, net profit has surged from $72m in 2013 to $273m for 2018. City analysts are expecting further growth to $284m by 2019.

As earnings have surged, management has increased cash returns to shareholders, who are the ultimate owners of the business. This year the City believes the firm will pay out a total of $0.09 per share, giving a dividend yield of 4.7% on the current share price. Further growth is projected for 2020. The yield could hit 5.4% next year based on these current projections.

Right now shares in Man are trading at a forward P/E of 11.1.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Ibstock. 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 income seekers, this level looks too good to pass up, but I’m not convinced. In fact, I think SSE’s dividend is living on borrowed time.

Dividend confirmation

A few weeks ago, in a trading statement ahead of its AGM, the FTSE 100 utility group informed investors that its full-year expectations for growth in 2018 remain unchanged, despite “lower than forecast” renewable energy output. Management also reiterated its intention to deliver a full-year dividend of 80p per share.

But away from the headlines, SSE is struggling. Customers are fleeing, and the company is having to fork out more than £2bn to transform the electricity grid to receive renewables. 

Management seems to believe that a company can continue to pay out almost all of its earnings to investors as dividends while maintaining the current level of investment. But I’m not so sure. Over the past five years, SSE’s net debt has nearly doubled as the firm has had to borrow to fund its payout.

With customer losses putting pressure on the bottom line, I think the company will have to make some tough choices when it comes to the dividend and capital spending during the next few years. A dividend cut is likely in my eyes.

Booming demand

As SSE struggles to retain customers and invest for the future, brickmaker Ibstock (LSE: IBST) seems to be powering ahead. Making concrete and clay bricks is hardly an exciting business, but it is a profitable one. Last year, Ibstock reported an operating profit margin of 25%, compared to SSE’s five-year average of 4%. 

The enterprise is riding high on the UK’s booming homebuilding sector. Over the past five years, as the demand for bricks has surged, the company’s net profit has increased at a compound annual rate of 51%. Earnings per share have jumped from 9.2p in 2014 to 16.4p and analysts are predicting 19.5p per share in 2019. 

This growth has allowed management to increase the company’s dividend by more than 200% since 2015, and I think there’s a good chance this growth will continue.

At current levels, the stock supports a dividend of 6.3%, and the payout is covered 1.4x by earnings per share. With analysts forecasting earnings growth of 17% for 2019 and 8% for 2020, there will be plenty of scope for management to increase the distribution in the years ahead without lowering the dividend cover ratio.

What’s more, the company’s balance sheet is also relatively clean. At the end of its last financial year, net gearing was just 11%, compared to SSE’s net gearing ratio of 152%, this looks very healthy. 

The bottom line 

So overall, if I was looking for a market-beating dividend stock to add to my portfolio, I’d sell SSE and buy Ibstock.

The latter’s dividend yield might be lower, but it looks to me to be more secure considering the company’s robust balance sheet and high dividend cover ratio.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Ibstock. 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.

You can imagine my joy, then, when the brickbuilder hiked the full-year dividend almost a fifth for the 2017 fiscal year and announced it would begin shelling out supplementary dividends too.

I’m delighted to say it looks like Ibstock will keep rewarding shareholders handsomely. The boffins at UBS are betting on a total reward of 16.4p per share for 2019, up from 16p last year, and yielding a mighty 7%.

What’s more, the bank expects annual rewards to rise relentlessly through to 2023 at least.

Balance sheet brilliance

It’s easy to see why UBS is just one of the forecasters expecting Ibstock to continue raising dividends, even though its near-term dividend prediction looks pretty fragile on paper — this is covered a mere 1.2 times by anticipated earnings for 2019.

Look past this reading, though, I’d say. Having coverage of 2 times or above is a useful indicator of future dividends. But it’s by no means a foolproof way of assessing a stock’s dividend prospects. Indeed for Ibstock, share investors can take immense consolation in the robustness of its balance sheet and, consequently, its ability to make good on City estimates.

The company’s a cash machine, put simply. In 2018, adjusted free cash flow boomed 10% to £65m and this allowed net debt to EBITDA to fall to 0.4 times, from 1 times the year before. Clearly Ibstock has plenty of financial headroom to keep investing for growth and to continue rewarding investors with big dividends.

Build rates to boom

So why am I confident the FTSE 250 firm can keep delivering big returns up until I retire? The colossal size of the UK’s homes shortage and the huge amount of building that needs to happen in the years ahead to soothe this, that’s why.

A government report released late last year suggested a whopping 240,000-340,000 new homes need to be built every year, reflecting a blend of rising homeowner demand and the poor build rates we’ve seen in recent years.

It’s obvious that Ibstock’s position as the country’s largest brickbuilder puts it in pole position to ride this wave. Indeed, with the opening of its gargantuan new factory in Leicestershire last year — one which has a jaw-dropping capacity of 100m bricks per annum — it really has the tools to create some terrific profits growth looking ahead.

The experts at UBS certainly expect profits to keep rising over the next five years. And yet the business still trades on a dirt-cheap forward P/E ratio of 12.1 times.

I consider it to be a bargain, then, and a brilliant buy for those looking to retire on a fortune.

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Royston Wild owns shares of Ibstock. The Motley Fool UK has recommended Ibstock. 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.

Mine’s a pint

The last decade has been difficult for the pub business, but market conditions seem to be improving at last. For investors looking for a reliable income from this sector, I think the best choices could be Greene King (LSE: GNK).

This £1.8bn businesss is the biggest listed pub operator in the UK, so it enjoys significant economies of scale. That’s important in an environment where costs, especially wages, are rising.

Greene King’s latest results suggest its performance has stabilised and may start to improve. Sales rose by 1.8% to £2,216.9m during the year to 28 April, while adjusted pre-tax profit was 1.6% higher at £246.9m. The dividend was left unchanged at 33.2p per share.

One potential risk is the group’s net debt of £1,943.3m. This figure fell by £89m last year but still remains high. However, the company is working to reduce this. Shareholders also have some protection thanks to a £3bn portfolio of freehold properties.

GNK shares trade on about 9.5 times forecast earnings and offer a dividend yield of 5.7%. Although I expect future growth to be slow, I see this as a good starting point for a long-term income investment.

Get the bus home

The transportation sector is seeing big changes in technology, but I’m confident that we’ll continue to need public transport which can carry large numbers of people safely and efficiently.

My top choice in this sector is Go-Ahead Group (LSE: GOG), in which I own shares. This company has a strong history of generating attractive returns and paying generous dividends. Go-Ahead’s dividend has not been cut since its stock market listing in 1994. During that time, the payout has risen from 4.8p per share to 102p.

Alongside its UK bus and rail services, the business is now expanding abroad, with services in Germany, Ireland and Singapore. I hope to see further continued, conservative expansion that will support further dividend growth.

GOG shares aren’t quite as cheap as they were a few months ago, but the stock’s forecast price/earnings ratio of 11 and 5.2% dividend yield still look fair to me.

This could be safer than houses

Demand for new housing still seems strong in the UK. But, in my view, housebuilders carry a lot of cyclical and political risk at the moment. So I’m more interested in investing in brick makers, who benefit from strong housing demand but also sell into commercial construction markets.

The largest brick producer in the UK is Ibstock (LSE: IBST), which has 19 factories, 23 quarries and also makes certain concrete products. The company has been running flat out in recent years and continues to report demand for bricks in the UK exceeds supply, meaning imports are required.

Although Ibstock would be exposed to a serious slump in demand, I’d expect sales of imports to fall before demand for UK bricks weakened too much. In the meantime, the business is performing well.

Strong cash generation has enabled the group repay debt and maintain generous dividends. IBST stock currently offers a forecast yield of 5.6%. In my view, this could be a decent long-term buy.

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Roland Head owns shares of Go-Ahead Group. The Motley Fool UK has recommended Ibstock. 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.

That said, don’t be put off from jumping in and grabbing a slice of something, I say. The same could have been said at the end of 2018 when the prospect of Federal Reserve rate hikes were doing the rounds.

There’s a galaxy of lovely stocks trading at low prices just waiting to be snapped up. In fact, there’s many FTSE 250 contenders I for one would be happy to buy today and hold for the rest of my life.

A fortune builder

Let me bring Ibstock (LSE: IBST) to your attention. It’s a share I actually own and was encouraged to buy on account of the size of the UK’s colossal homes shortage plus the many, many years of intense building that’ll likely be required to soothe it.

This supply/demand discrepancy is giving homebuilders the confidence to keep boosting construction rates and this is keeping sales of Ibstock’s bricks chugging higher.

It’s no wonder, then, the FTSE 250 firm declared in May it had made a “solid start to 2019” and that “underlying market conditions remaining stable despite ongoing political and economic uncertainty in the UK.”

If it can thrive in times like these, where Brexit is playing havoc with the UK economy on a scale not seen for decades, I feel it can survive just about anything.

City analysts do too, and they forecast that earnings will rise by double-digit percentages in 2019. A bargain-basement forward P/E ratio of 11.4 times fails to reflect this resilience, in my opinion, while a corresponding 5.9% dividend yield adds a brilliant sweetener to Ibstock’s investment case.

Fizzing up

Now I don’t hold Britvic (LSE: BVIC) at the moment, but I’m sorely tempted to load up on it. I’ve been a big fan of the soft drinks giant for many years on account of much-loved brands such as Robinsons, Lipton, Tango and Drench.

The company’s website proudly proclaims that “17,600 Britvic drinks are bought every minute” in its UK home market, and it’s managed to cultivate the success of its drinks portfolio through a steady stream of product innovations.

On top of this, the so-called sugar levy in the UK, brought in last April, has provided the firm with some welcome tailwinds too, underpinning demand for its low- and no-sugar brands such as Pepsi Max. This is another reason why revenues at the group rose 4.9% in the first six months of the fiscal year.

Just like clockwork, City analysts are expecting Britvic to put in another year of earnings and dividend growth in the current term. And this means the business boasts a cheap prospective P/E multiple of 15.3 times and a bulky 3.3% corresponding dividend yield.

Make no mistake, this drinks dynamo’s established brands aren’t going anywhere, and this makes it a brilliant share to hold for many years to come.

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Royston Wild owns shares of Ibstock. The Motley Fool UK owns shares of and has recommended Britvic. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

This year, City analysts are expecting the company to report earnings per share of around 19.8p, up a staggering 520% from 2013’s reported figure of 3.2p. 

And it looks as if Ibstock is well on the way to meeting this target. A few days ago, the company informed investors that it has made a solid trading start to the year and expectations for the full year are unchanged, although it does expect earnings to be weighted towards the second half of 2019.

Rising income

Thanks to its explosive earnings growth over the past five years, Ibstock has also become one of the FTSE 250’s best income stocks. It first started paying a dividend to investors in 2015, distributing 4.4p per share. Last year it paid out 16p, giving a historical dividend yield of 6.8% on the current share price. 

It would appear as if this trend is going to continue. After selling its Glen-Gery US business for £76m last year, it ended 2018 with net debt of £48.4m, down from £117m at the end of 2017. This debt reduction has reduced interest expenditure by around £7m a year, which is enough, according to my figures, to pay an extra 1.7p a year to shareholders boosting the annual dividend by a little over 10%. 

Considering all of the above, the company’s cash generation, earnings growth and dividend expansion, I think shares in Ibstock are a steal today as they are dealing at a forward P/E of just 12.

A unique business

I also think investors should consider FTSE 250 financial services group Equiniti (LSE: EQN) for their Stocks and Shares ISA.  

This is a somewhat unique business, which is why I think it could be an excellent investment for any portfolio. Equiniti provides complex administration services for companies, such as US banking giant Wells Fargo. It agreed to acquire the bank’s share registration business for $227m in 2017 and has today announced that the integration is complete, a development management describes as an “exciting milestone” for the group. 

Thanks to the contribution from this new business, Equiniti’s top line expanded by around a third in 2018. Analysts are predicting even faster growth in 2019 as the integration reaches its conclusion. The City has pencilled in earnings per share of 19.2p for full-year 2019, up 307% year-on-year.  

Booming business

Based on the City’s growth targets, the stock is currently dealing at a forward P/E of 11.8, which looks to me to be a steal for such a critical business.

Without Equiniti’s services, a large number of financial service companies would have to bring administration back in house, which would cost significantly more. In other words, Equiniti’s size and scale in the market gives it an edge which is difficult to replicate. On top of the company’s attractive valuation, it also supports a dividend yield of 2.6%, with the payout covered 3.3 times by earnings per share, leaving plenty of room for further growth in the years ahead.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK owns shares of Equiniti. 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.

To give you an idea of what’s possible, I’ve chosen three FTSE 250 dividend stocks with 5% yields that I’d be happy to buy for my income portfolio.

Profit from renewable energy

Utility stocks are unpopular at the moment. The big firms are losing customers and face the risk that a Labour government might try to renationalise them.

In my view, there are safer choices for investors who want to invest in renewables. One of my top picks — a stock I own myself — is The Renewables Infrastructure Group (LSE: TRIG). This is essentially a financial company that invests in renewable energy, mostly UK wind farms.

The company’s policy is to pay quarterly dividends using the cash it receives from its assets. At the time of writing, the shares boast a forecast yield of 5.4%. According to the firm, the biggest single risk to its performance would be a major shortfall in electricity output. Given the geographical spread of the group’s assets, this seems a fairly low risk to me. I’m happy to hold and rate the shares as a buy for income.

I’m on the bus

Britain’s fragmented rail network has proved troublesome for the private companies who run rail franchises. But operating buses seems to be much simpler and more profitable.

Southern Rail owner Go-Ahead Group (LSE: GOG) is a good example of this. The firm’s bus operations generated 67% of its operating profit last year, with rail providing the remainder. Although management hasn’t given up on UK rail, the firm isn’t putting all its eggs in one basket.

International operations are expected to deliver 15%-20% of operating profit by 2022, reducing Go-Ahead’s dependence on the UK market.

I also expect demand for public transport to continue to increase as our cities become larger and more densely populated. In my view, Go-Ahead is a great way to play this trend.

The firm generates plenty of spare cash and hasn’t cut its dividend since listing on the stock market in 1994. That’s 25 years of unbroken dividends, during which time the payout has increased from 4.8p per share to 102p per share.

At current levels, the shares offer a forecast yield of 5.3%. I’d be a buyer at this level.

Safer than houses

The big housebuilders offer some very tempting dividend yields at the moment. But in my view they carry a lot of political and cyclical risk. Although the UK certainly needs more houses, any change to market conditions could hit builders’ profits.

I think that brickmaker Ibstock (LSE: IBST) could be a safer way to profit from the demand for new housing. This £1bn firm has been investing in new capacity to meet demand, which has seen its existing plants running flat out for extended periods.

It’s a surprisingly profitable business, in part because no builder likes to import bricks if it can buy them locally. Bricks are heavy and bulky and have high transport costs — so this should be one business that doesn’t suffer from cheap overseas competition.

Ibstock’s accounts for 2018 show good cash generation and a healthy 25% operating profit margin. Looking ahead, the stock trades on 13 times forecast earnings, with a 5.1% yield. I’d buy.

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Roland Head owns shares of Go-Ahead Group and THE RENEWABLES INFRASTRUCTURE GROUP LIMITED ORD NPV. 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.

The brickmaker’s share price infamously took one hell of a whack last year because of forced production shutdowns. But improving sentiment towards the housebuilding sector has carried it higher since the turn of the year (up 30% from January 1, in fact).

Despite this uplift, the FTSE 250 firm still changes hands on a cheap forward P/E ratio of 13 times, comfortably inside the accepted value region of 15 times and below. This is mighty low given the company’s extremely bright earnings outlook, underpinned by the country’s cavernous housing shortage.

Indeed, the desperate need to get Britain building was underlined by the Chancellor Philip Hammond’s spring statement this week in which he vowed to establish an extra £3bn fund to help housing associations deliver an additional 30,000 affordable homes. And this adds to my belief that Ibstock’s bricks should keep selling like the proverbial hotcakes for many years to come.

Big yields!

Ibstock’s gigantic dividend yields of 5.1% for 2019 and 5.4% for 2020 provide more reasons to pay it close attention today. And if that whets your appetite, then Cairn Homes (LSE: CRN) is worth close attention too.

A 3.6% yield for the current fiscal year may be decent rather than spectacular, but thanks to City predictions of strong double-digit earnings rises over the next couple of years, a significantly higher dividend is forecast for 2020 and this yields an eye-popping 6.6%.

The supply crisis in Britain’s homes market is replicated across the Irish Sea, a situation that Cairn is well placed to exploit. The builder saw operating profit more than treble last year to €53.2m as it ramped up production to meet homebuyer demand in Dublin and other popular cities in Ireland. And it’s no wonder that the number crunchers are expecting the bottom line to keep swelling as construction rates rise (work is set to begin on five new selling sites in 2019 alone).

Another brilliant buy

At current share prices, Cairn can also be considered a bona-fide bargain, the firm boasting a prospective earnings multiple of a mere 5.8 times.

The final stock I’m looking at which offers the perfect blend of big dividends and great value is Hays (LSE: HAS). With City analysts expecting the recruiter’s long-running growth story to continue, it’s no surprise that dividends are expected to keep bulging too, meaning giant yields of 6% and 6.7% for fiscal 2019 and 2020 respectively.

And at recent trading levels, Hays boasts a forward P/E rating of just 12.8 times. Share pickers may be put off by continued weakness in its UK marketplace, but still-strong growth in key markets like Germany and Australia still offers plenty to cheer.

Indeed, Hays saw 20 of the 33 nations in which it operates print record performances in the six months to December. And as it invests to broaden its global footprint, I’m convinced that it should continue to thrive.

The post 3 embarrassingly cheap dividend stocks I’d buy with my last £1k appeared first on The Twelfth Magpie.

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• Down 29%, a beaten-down FTSE 250 bargain I’m predicting can rebound!

Royston Wild owns shares of Ibstock. 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.

In it I wrote about Barratt Developments, a stock that I own and plan to hold for the next decade (at least), and explained why I have the confidence to expect that the country’s homes shortage will keep profits bounding higher through this period.

There’s no doubt that Britain needs to hurry up and get building over the next several years, and this plays into the hands of Ibstock (LSE: IBST). Like Barratt, I also own shares in this business, given the size of the UK’s housing supply imbalance and the length of time this will take to resolve.

We already don’t have enough bricks to go round, as shown by most recent annual figures from the Brick Development Association. While British builders used 2.4bn bricks in 2017, only 1.9bn of these were supplied locally, the shortfall of half a billion or so being filled by foreign imports.

Production from the likes of Ibstock has risen over the past year in response to this demand imbalance, and is all set to continue doing so as housing build rates rise in the years ahead.

Build a fortune

The FTSE 250 firm is the biggest maker of clay bricks in the UK by volume and this puts it in a prime position to capitalise on the housing sector’s growing need for its product. Through its 20 or so manufacturing bases up and down the country it’s well placed to service homebuilders all over England, and the addition of its 100m-brick-per-annum site in Leicestershire last July bolstered its earnings outlook still further.

In the more immediate term, investors can look forward to chubby profits growth through to 2020 at least, or so say City brokers, and therefore more inflation-smashing dividends, too. Right now, Ibstock sports giant yields of 5.9% and 6.1% for this year and next, respectively, making it a great share for income chasers in particular to pick up today.

A bright spark

Another share I believe will continue thriving over the next decade is National Grid (LSE: NG). For the sake of stating the obvious, our need for electricity is only going to increase thanks to our growing population, and this makes the FTSE 100 firm a great pick to keep growing earnings.

But this isn’t the only reason I’m tipping the network operator to thrive. Its expansion onto the US Eastern Seaboard gives it great revenue possibilities on foreign shores as well. With National Grid’s tentacles spreading further into Europe too — in January its Nemo Link joint project was launched to create a power link between the UK and Belgium — the future looks extremely bright.

Reflecting this bubbly outlook, City brokers feel that dividends will keep heading northwards, meaning that yields sit at a stunning 5.6% and 5.7% for fiscal 2019 and 2020, respectively. I’d happily buy the business today and hold it for many years to come.

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Royston Wild owns shares of Barratt Developments and Ibstock. 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.