You cannot blame them, in some respects. After all, the firm shocked the market with not one but two scary updates at the back end of last year, the shares first dropping on it warning of “challenging” market conditions for its Civil Engineering division in October. It plunged again in December after warning that profits would be “weaker than expected” for the final quarter due to an adverse product mix and the impact of sales timings at its Coated Technical Textile unit.

News that chief executive Brett Simpson had defected to Fenner in the run-up to the Christmas period added to jitters as to how the company can reverse its troubles. Consequently it saw its market value shrink by almost half in the final three-and-a-half months of 2017.

I reckon it’s about time share selectors took a close look at the business again, however, as there remains plenty to be optimistic about. Low & Bonar managed to keep growing revenues in the first quarter despite difficult market conditions persisting. And with the company undertaking a number of self-help measures, from solving production problems at Coated Technical Textile to introducing fresh cost saving initiatives, the news flow is likely to become more positive during the second half of the year.

Yield charges to 6%

City analysts certainly remain largely upbeat over Low & Bonar’s profits outlook and they are estimating earnings growth of 4% in 2017 and 8% next year.

These readings may be reassuring if not exactly spectacular. The same cannot be said for the London firm’s dividend prospects, however, due to the colossal dividend yields it currently packs.

This year a 3.1p per share reward is being predicted, up from the 3.05p dividend of 2017. This yields an eye-watering 5.8%. Moreover, the anticipated 3.3p payout estimated for next year moves the dial to 6.2%.

Investors concerned about Low & Bonar’s ability to meet these projections should revenues worsen again can take heart from the fact that anticipated dividends are covered 2.2 times by predicted earnings, comfortably above the accepted safety terrain of 2 times.

With it also sporting a dirt-cheap forward P/E ratio of 8 times, I think it’s well worth checking out today.

Dividends rocketing higher

Tatton Asset Management (LSE: TAM) is another big yielder that can be picked up for almost nothing right now.

I noted in October the electric fund inflows that the AIM-quoted business is enjoying, and latest trading details released last week confirmed that it continues to make terrific progress — assets under management leapt by £1bn year-on-year in the 12 months to March 2018, it said, to £4.9bn.

City analysts believe Tatton should deliver earnings growth of 22% and 21% for fiscal 2019 and 2020 respectively, leaving the business dealing on a forward PEG reading of just 0.9 and also leading to predictions of chunky dividend improvements. A predicted 6.5p per share reward for last year is expected to chug to 7.8p this year and to 9.2p for next year, resulting in meaty yields of 3.5% and 4.1% for these respective years. I reckon Tatton is a top stock for those seeking brilliant income flows on a tight budget.

The post 2 mega-cheap dividend stocks that I’d buy with £2,000 today appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

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

Share pickers were encouraged to keep piling in on the back of terrific full-year results. In 2017, Senior generated £1.02bn worth of sales, up 12% year-on-year and marking the first time the top line had barged through the £1bn barrier.

In other news, the Hertfordshire firm saw free cash flow jump 20% from 2016 levels, to £58.3m, which in turn helped net debt to drop by a chunky £42.8m, to £155.3m.

However, adjusted pre-tax profit ducked 3% to £73.1m, caused by a deterioration in margins (group adjusted operating margin dropped 120 basis points to 8.1%). Adjusted earnings rose fractionally to 14.39p per share.

The turnaround titan

Challenging market conditions have caused Senior to struggle in years gone by, the company chalking up two punchy bottom-line declines in the past three years. However, the FTSE 250 firm’s turnaround strategy is clearly beginning to pay off and City analysts are expecting earnings to rise 6% in 2018 and 17% next year.

The company today reported a “strong order intake” last year, Senior chalking up a book-to-bill of 1.15 times. And a strong aerospace market in particular leaves it in great shape to deliver meaty profits expansion in future years.

The plane parts builder commented: “The production ramp-up of new, more efficient, large commercial aircraft programmes means the outlook for the commercial aerospace sector is both strong and visible. Senior has healthy shipset content on all the large commercial aircraft platforms and has further increased its content on the new engine versions during 2017.”

Senior’s rapidly-improving balance sheet saw it hike the full-year dividend 6% in 2017, to 6.95p per share. And this, allied to its solid earnings outlook, is expected to keep shareholder payouts chugging higher.

In 2018 a 7.3p per share dividend is forecast, yielding a very-decent 2.5%. And next year a 7.9p payout is predicted, creating a 2.7% yield.

Now Senior may be a tad expensive on paper, its forward P/E ratio of 19 times sitting above the accepted benchmark of 15 times o below that indicates good value for money. But I consider this to be a fair premium given its robust position in growing markets and rapidly-improving balance sheet.

The monster yielder

Those seeking big dividend yields may not be tempted in by Senior. They may want to have a look at Low & Bonar (LSE: LWB).

Like the engineer, I am tipping the performance materials play to keep thriving in difficult markets, a sentiment shared by the Square Mile’s army of number crunchers — earnings advances of 7% and 8% are forecast for the years to November 2018 and 2019 respectively.

And these bright projections are also set to keep dividends marching skywards. Thus a payment of 3.05p per share last year is expected to rise to 3.2p this year, and again to 3.4p in fiscal 2019. Yields stand at 5.3% and 5.7% for this and next year.

Today Low & Bonar can be picked up a prospective P/E ratio of 8.7 times. This is far too cheap in my opinion given that sales are rocketing (up 11% last year to £446.5m) and cost-cutting is clicking through the gears.

The post One turnaround stock and one 5% yielder that could make you rich appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

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

John Menzies

£586m market cap John Menzies (LSE: MNZS) provides time-critical logistics and support services, operating through two segments, aviation and distribution. Menzies Aviation services the airline industry, offering services such as ramp and cargo handling, re-fueling and de-icing, while Menzies Distribution helps businesses move goods from one place to another, through a fleet of 1,900 vehicles. Each day, the distribution business delivers 300,000 units of products to over 25,000 destinations.  

The logistics specialist endured a rough patch between 2011 and 2015, with revenue stagnating and earnings falling, and the company cut its dividend in 2014. However, a turnaround now looks to be underway.

Interim results released this morning show a turnover increase of 21% to £1,217m, and a 43% rise in underlying operating profit to £30.1m. Underlying earnings per share rose from 18p to 21.8p, and the company hiked its interim dividend by an impressive 11%. Chairman Dermot Smurfit sounded upbeat about the results, stating: “overall, I am very pleased with the Group’s performance in the first half and we look to the future with confidence as demonstrated by the increased dividend payment.”

For the full year, City analysts expect revenue to jump 20% to £2,381m, and earnings per share to rise 14% to 54.5p. That consensus earnings figure places the stock on a forward P/E ratio of just 13.1. A dividend payout of 19.5p is also anticipated, equating to a yield of a healthy 2.7%. 

After rising from 530p to 720p over the last year, the share price has had a good run, however, with the stock’s valuation still looking attractive, there could be more to come, in my view.

Low & Bonar

Also trending upwards over the last year is Low & Bonar (LSE: LWB). The £284m market cap performance materials group specialises in designing and manufacturing components which add value to, and improve the performance of, its customers’ products.

Like John Menzies, Low & Bonar has struggled to generate meaningful revenue growth in recent years. However, things appear to be looking up, with City analysts pencilling in a top-line rise of 7.3% this year. Half-year results released in July saw revenue rise 16.4%, and adjusted earnings per share climb 25%. The company said that “overall, we remain confident of meeting the Board’s expectations for the full year.”

On consensus FY2017 earnings of 7.25p per share, the performance materials specialist does not look expensive, and currently trades on a forward P/E ratio of just 11.9. It’s also worth noting that the company has attractive dividend prospects, having raised its dividend in each of the last five years. Analysts forecast a dividend payout of 3.2p this year, equating to an attractive forward yield of 3.7%, covered 2.3 times. With these figures in mind, there could be potential for both capital growth and dividend growth here, in my opinion. 

The post These high-flying small-caps look ridiculously cheap appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

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

Retailer on the rise

Retail giant Findel (LSE: FDL) cheered the market on Tuesday with news of a significant divestment, a development that drove shares in the company 7% higher from Monday’s close.

The Hyde-based business advised that it had shorn off its Kitbag division to US sports merchandise giant Fanatics for a cash consideration of £11.55m. Findel said that the move will “focus our resources more fully on driving growth within our core home shopping and education businesses.”

And despite today’s solid share price bump, I believe Findel still offers great value at current prices, particularly as sales at Express Gifts and Findel Education continue to improve.

The City expects the company to follow predicted earnings growth of 15% in the 12 months to March 2015 with a 7% advance in 2016. This leaves the stock dealing on a P/E multiple of just 7.2 times — any reading below 10 times is widely considered terrific value.

Manufacturer on the march

Although paring gains from earlier in the day, diversified manufacturer Low & Bonar (LSE: LWB) was also firmly in the ‘plus’ column in Tuesday business and was last seen 5.5% higher on the day.

Investor sentiment cantered higher, following news that pre-tax profit advanced 5.6% in the year to November 2015, to £26.6m, with Low & Bonar shrugging off the impact of unfavourable currency movements. Total revenues at actual rates fell 3.6% last year to £395.8m, although at constant currencies these rose 2.4% in the period.

Even though tricky market conditions remain a bugbear for some of Low & Bonar’s divisions, I believe the company’s expansion in China — on top of capacity increases at its construction fibres facilities — should underpin robust bottom-line growth in the years ahead.

The abacus bashers expect the business to chalk up a 10% earnings advance in 2016 alone, leaving Low & Bonar changing hands on a very-attractive P/E rating of 10.8 times.

Time to stop digging

Diversified mining giant Anglo American (LSE: AAL) enjoyed a solid updraft during the dying embers of January, as risk appetite returned to global stock markets. But this strength is already beginning to peter out, and I expect the company to add to the 7% fall currently recorded in Tuesday trading.

It’s no secret that each of Anglo American’s major markets remain hamstrung by colossal supply/demand imbalances, a scenario that should keep a cap on potential price recoveries. Indeed, signs of worsening economic cooling in China are likely to heap fresh pressure on raw material prices in the near future.

Anglo American is expected to have clocked up a fourth successive earnings slip in 2015, this time by a meaty 57%. And a colossal 36% dip is predicted for 2016.

Sure, a consequent P/E rating of 10.4 times may be attractive on paper. But I reckon Anglo American’s long-term revenues outlook — not to mention the prospect of earnings downgrades to current projections and likelihood of draconian dividend cuts — make the business a highly-unattractive stock selection.

The post Should You Buy Anglo American plc, Findel plc And Low & Bonar plc On Tuesday? appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

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