Yet this particular student accommodation provider trades at a hefty discount (7% to be exact) from its 2019 peaks set in February. And this means it boasts a bargain-basement sub-1 forward PEG ratio of 0.5, a reading that also make it much better value on paper than its two big competitors.

An ‘A-grade’ stock

Surely it’s time for the market to look again at Empiric. I reckon half-year results slated for August 20 could provide a reminder of what a cracking little profits generator it is. Booking rates have certainly remained robust (at 54% as of early May for the 2019/2020 year) as have efforts to bolster operating margins.

City analysts expect the company to deliver a 38% earnings improvement in 2019 and to follow this with a 16% rise next year. And why wouldn’t their forecasts be so sunny? As latest data from UCAS showed, enrolement numbers at UK universities continue to swell at a terrific rate and this bodes well for the providers of student digs.

One final thing. Empiric has pledged to pay a 5p per share total dividend for 2019, one which the number-crunchers agree looks more than feasible. And this means the business carries a market-beating 5.4% forward dividend yield. A similar payout is predicted for 2020 as well, making the business quite an attractive income share as well as hot growth generator, certainly in this Fool’s opinion.

Another top August buy

Empiric, however, isn’t the only splendid ‘all rounder’ I’d consider snapping up today. Marshalls (LSE: MSLH) has had no trouble on the share price front of late, up around 40% since the turn of the year. Still, I reckon it could have more ground to gain next month when interims are unveiled on August 15.

Marshalls, which provides paving and landscaping products to the construction industry, certainly blew the doors off with terrific trading details last time out in May. Back then, it advised revenues had ballooned 21% in the four months to March (or 13% excluding the contribution of its newly-acquired Edenhall brickbuilding division), a rise which reflected the underlying strength of the firm’s markets and its ability to outperform competitors.

The FTSE 250 firm’s been a dependable deliverer of double-digit profits rises in recent years but, owing to the broader troubles the construction sector’s battling because of Brexit, City brokers expect earnings expansion to slow to 7% and 6% in 2019 and 2020, respectively.

I believe, though, Marshalls’s proven resilience in these tough conditions could prompt waves of forecast upgrades should those aforementioned financials, as I fully expect, impress the market.

Regardless of whether this happens, those number-crunchers expect the landscaping leviathan to remain a stellar dividend raiser. A 15.2p per share total payout is estimated for 2019, up from 12p last year.

A 2.4% forward yield might not be as impressive for investors seeking strong and sustained dividend hikes long into the future, but I think Marshalls is still a great share to bet on.

The post Dividend watch! I’m tipping these spectacular income stocks to surge in August appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

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.

With RBS set to increase dividends over the medium term, now could be the right time to buy it. Alongside another dividend growth stock that released an update on Thursday, it could deliver an impressive income return in the long run.

Improving outlook

The company in question is home improvement and home building products supplier Marshalls (LSE: MSLH). Its full-year results showed that it has been able to perform well despite challenging trading conditions. Revenue increased by 14% to £491m, while pre-tax profit moved 21% higher to £62.9m. Its return on capital employed improved by 110 basis points to 21.9%, while strong cash generation has continued.

The company’s self-help programme appears to be making a real impact on its financial performance. It is focused on innovation, with increases in R&D expenditure set to lead to new products that could drive sales higher.

While Marshalls has a dividend yield of just 2.6%, its dividend growth potential seems to be high. In the last five years, dividends per share have risen at an annualised rate of 25%. With dividend payments due to be covered 1.8 times by profit, there could be scope for continued dividend growth over the medium term. As such, the stock could become an impressive income opportunity, with its share price performance having the potential to be positively catalysed by a rising dividend.

Growth potential

As mentioned, RBS could become an increasingly appealing income share. The company has experienced a challenging recent past, with it still not having returned to full financial health following the financial crisis. This shows just how dire its prospects were a decade ago, and it is likely to take a number of years for it to move away from the effects of the credit crunch.

However, the bank’s management appears to be confident in its ability to achieve improving performance. It has restarted dividends, with the stock expected to yield 4.8% in the current year. This figure has been boosted by a falling RBS share price, the bank having been relatively unpopular among investors in the last year as the prospects for the UK economy have become increasingly uncertain.

Looking ahead, Brexit could disrupt the company’s near-term prospects. However, with factors such as a rising interest rate and the expected reduction in PPI claims likely to have a positive impact on its performance, dividend growth could be impressive. The RBS dividend for 2019 is due to be covered 2.2 times by profit, which suggests that it is able to afford a much higher shareholder payout. This could lead to a strong income return in the long run which makes the stock more appealing than buy-to-let properties.

The post Why I’d dump buy-to-let and buy into the RBS share price today appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Royal Bank of Scotland Group. 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.

Healthcare is one of the country’s fastest-growing industries as the domestic population booms, and in particular the number of elderly people who put particular strain on the health service. Indeed, the Office for National Statistics estimates that the UK population will top 70m by 2030 and hit 77m by the mid-point of the century.

Assura, in my opinion is a great way to play this theme, a firm which buys up, develops and manages doctors’ surgeries, primary care and community healthcare infrastructure. As I noted last time out, it’s committed to aggressive M&A to fully exploit this opportunity-rich marketplace and latest trading details underlined the wisdom of such a strategy.

5%+ yields

In interims released a month ago Assura advised that EPRA (or European Public Real Estate Association) earnings shot 36% higher in the six months to September, to £31.7m, while the rent roll rose 7% to £97m. What’s more, the value of its property portfolio rose 6% from a year earlier to £1.8bn.

And these solid results prompted the FTSE 250 firm to hike the interim dividend 9% year-on-year to 1.3p per share.

City brokers believe that Assura, supported by a 9% earnings rise in the full financial year, will lift the total dividend to 2.7p per share from 2.455p last year. In fiscal 2020 it’s expected to grow again to 2.8p, supported by a prediction of another 5% yearly profits improvement Such projections yield an inflation-smashing 5% and 5.2% respectively.

As Assura commented in that release, there is “significant underinvestment in the nation’s primary care premises [with] many GP premises not currently fit for purposes.” And with the government boosting investment in community care to take the strain off Britain’s jam-packed hospitals, Theresa May announcing a £3.5bn cash injection in this area by 2023/24 just last month, the profits picture over at the business looks extremely bright to me.

Bricks beauty

Marshalls (LSE: MSLH) is another great income share that should thrive in the decades ahead.

Profits generation at the paving block manufacturer has been most impressive, growing relentlessly and at double-digit percentages for more than half a decade now. And acquisition activity this month has boosted its appeal as a great growth stock for the coming years, Marshalls buying concrete brick manufacturer Edenhall for £17.2m in a move that increases its exposure to the robust housebuilding market.

In the immediate future, City analysts are forecasting another 16% earnings rise in 2018, this forecast supported by news this month that revenues boomed 14% during the first 11 months of the year to £465m. Another 8% rise is predicted for next year, although I can see this figure being upgraded as we move through 2019 following the aforementioned M&A action.

With sales and profits expected to keep ripping higher, the number crunchers are predicting even more special dividends and so total rewards of 14.5p and 14.6p per share are anticipated for 2018 and 2019 respectively. The yield consequently sits at a handsome 3.2% through to the close of next year, making Marshalls one of the hottest FTSE 250 shares to buy now and hold for many years into the future, I believe.

The post Have £3k to invest? 2 FTSE 250 dividend stocks I’d buy and hold for 25 years appeared first on The Twelfth Magpie.

More reading

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• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

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.

However, there could be a value investing opportunity on offer. The company has a relatively low valuation, as well as a high yield. This suggests that it could be worth buying in my opinion alongside another income stock which released positive results on Wednesday.

Improving outlook

The stock in question is hard landscaping manufacturer Marshalls (LSE: MSLH). It announced that recent trading has been strong, with revenue for the first 11 months of the year rising by 14% to £465m. Its self-help programme is achieving its goal in supporting organic growth, while the underlying indicators in a range of markets remain positive.

Alongside its trading update, the company also released news of an acquisition. It has purchased Edenhall Holdings for an initial cash consideration of £11.8m and deferred consideration of up to £5.4m. Edenhall is an independent brick manufacturer and a supplier of concrete facing bricks. The deal is in line with the company’s strategy of expanding into adjacent building products related to New Build Housing.

Looking ahead, Marshalls is expected to report a rise in earnings of 15% in the current year, which puts its shares on a price-to-earnings growth (PEG) ratio of 1.3. Its growth rate could prompt a rise in dividends – especially since they are covered 1.7 times by profit. As such, its 3.2% dividend yield could become increasingly appealing.

Income potential

As mentioned, BT could offer a relatively attractive income investing outlook. The stock has a dividend yield of 6.1% at the present time, which is around 170 basis points higher than the FTSE 100’s income return. This indicates that investors may be expecting a challenging period for the business and its dividend, with 2018 and 2019 representing periods of significant change.

Strategy changes could take time to have their desired impact, while a new CEO may have more scope to reduce dividend growth in order to facilitate further expansion. A dividend cut could even be on the cards, although a payout ratio of 60% sounds both affordable and relatively prudent given the company’s size, scale and diversity.

As with many FTSE 100 shares, the prospects for BT over the coming months may be somewhat challenging and difficult to accurately predict. However, for investors who are searching for a high yield from a business that could deliver a successful turnaround, it could be worthy of a closer look.

Certainly, it may be riskier than some of its index peers and dividend growth is not guaranteed. But given its margin of safety and the progress being made on the implementation of its new strategy, the stock could have an increasingly favourable risk/reward ratio.

The post Why BT is a FTSE 100 dividend share I’d buy today appeared first on The Twelfth Magpie.

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Peter Stephens 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.

Slowcoaches

Stagecoach, which runs trains, buses, trams and express coaches in the UK, US and Canada, has had a bumpy journey in recent years, but today is back on track. The stock is up around 2% today on publication of a broadly positive trading statement where management declared itself “pleased to have made a good start to the year” with its adjusted earnings per share (EPS) forecasts broadly unchanged.

The £913m company isn’t firing on all cylinders, though. Year-to-date like-for-like revenues rose 3.2% in the 16 weeks to 18 August in its UK Bus (regional operations) division, 2.1% in UK Rail (excluding Virgin Trains East Coast), and 5.3% in Virgin Rail Group. But other parts of the business have stalled. UK Bus (London) revenues were down 2.2%, while North America was down 3.8% in the four months to 31 August.

Tender trap

Stagecoach has lost the South West and East Coast rail franchises in the past two years and missed out on some recent London bus tenders. Today management admitted it was “disappointed” with its performance on tenders for Transport for London contracts, which will accelerate the rate of revenue decline later this year.

The stock is nonetheless up 18% in three months, but trading at 8.9 times earnings it still looks cheap. The dividend is less eye-catching than before but still decent at 5.2%, with cover of 2.2. Earnings forecasts worry me though, with an expected 18% drop in the year to 30 April 2019, and 9% the year after. Yes it looks cheap, but its hardly an unmissable bargain.

Floored

Paving and flooring products business Marshalls (LSE: MSLH) saw its share price spike almost 15% to 483p in mid-August after it reported a 12% rise in interim pre-tax profits to £32.5m, despite the ‘Beast from the East’ taking a £9m bite out of its sales.

Revenues also grew 12% to £244.3m amid strong recent trading and healthy order intakes, putting it on course to meet full-year expectations. Investors reaped the rewards with an 18% increase in the interim dividend to 4p a share, which means the stock now offers a steady forecast yield of 3.3%, covered 1.7 times.

Quite Beastly

This £877m company has done well to fight both Brexit and the Beast, although its share price has retraced most of last month’s spike. It isn’t cheap, trading at a forecast 17.6 times earnings but earnings growth looks healthy with EPS forecast to jump 14% in calendar year 2018, and another 7% in 2019. 

That does mark a slowdown on recent years. EPS growth was 46% in 2014 and 41% in 2015, so we may not see a repeat of the recent strong share price performance, which saw the stock grow 145% over five years. My Foolish colleague Royston Wild remains a major fan, praising the company for posting strong growth in the face of wider economic fears. Today it is cheaper than when he tipped it, and well worth a look.

The post Why I’d buy this FTSE 250 growth and income stock today, but shun the other appeared first on The Twelfth Magpie.

More reading

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• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

harveyj 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.

And I’m delighted to say that latest trading details — which propelled the landscaping product manufacturer’s share price to record peaks above 480p per share earlier this week — have reinforced my positive view.

Marshalls saw revenues leap 12% between January and June to £244.3m, a result that drove pre-tax profit higher by an identical percentage to £32.5m. The result was particularly impressive given the significant impact of storms during the period. What’s more, during June (as well as July) turnover leapt 21% year-on-year. This encouraged it to lift the interim dividend 18% to 4p per share.

The business continues to thrive despite the maroeconomic uncertainty that is denting industry demand. Indeed, Marshalls noted Construction Products Association predictions pointing to a 0.6% decline in UK volumes in 2018. And there’s plenty of reason to expect sales at the paving slab provider to really take off in 2019 as the association predicts industry volumes will leap 2.3% next year.

City analysts are certainly bullish and they expect earnings to rise 12% this year alone, a figure that is suggestive of further dividend growth.

Payouts have almost tripled over the past five years, culminating in 2017’s 14.2p per share dividend which included the provision of special dividends. These supplementary rewards are expected to keep on coming, culminating in predictions of a 14.3p dividend for 2018, meaning the yield sits at a healthy 3%.

This might not be the biggest yield on offer, but given the rate at which earnings are tearing skywards, and cash generation continues to impress, I wouldn’t be surprised to be current dividend projections fall short of the actual payout. All things considered, I reckon Marshalls is a brilliant share to buy today, a company fully deserving of an expensive forward P/E ratio of 19.2 times.

As safe as houses

That said, if you’re seeking gigantic dividend yields now, then Bellway (LSE: BWY) may well be your sort of thing.

Like Marshalls, dividends have progressed at quite a pace over the past half decade, up 307% to be exact in the five years to July 2017. And supported by predictions of additional double-digit profits growth in the period just passed, the dividend is expected to rise again to 138.2p per share from 122p last year.

But what about now? Well, City analysts are forecasting a 145.4p payout for fiscal 2019, supported by an anticipated 5% earnings improvement and meaning investors can enjoy a chunky yield of 4.9%.

Bellway isn’t without its problems, the FTSE 250 business advising this month that “house price inflation has moderated” over the past 12 months. Fears over future property price growth is reflected in the company’s dirt-cheap valuation, a prospective earnings multiple of 7 times.

I would consider this rating to be scandalously low, however, given that the market remains strong enough to support decent profits and thus dividend expansion, and is likely to continue to do so. Despite modest home price inflation in fiscal 2018, Bellway still recorded a 16% revenues improvement  thanks to it selling more than 10,000 homes last year for the first time.

What’s more, a chunky forward order book of 4,841 homes as of July suggests that the top line should keep ripping higher for some time yet. I reckon the housebuilder could make you a fortune by the time you come to retire.

The post Have £1,000 to invest? These 2 FTSE 250 dividend growth stocks could help you to retire early appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

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.

However, it’s not the only company that could offer impressive dividend growth. Reporting on Thursday was a stock that has a good track record of dividend growth that could continue over the medium term.

Resilient performance

The company in question is specialist landscape products company Marshalls (LSE: MSLH). It released interim results on Thursday which showed that it was able to deliver strong revenue growth for the half year despite a severe weather impact. Its operating margins increased by 10 basis points to 13.7%, while recent trading has been especially strong. The integration of CPM Group has continued to be in line with expectations, while return on capital employed for the group has remained relatively high at 20%.

Looking ahead, macroeconomic uncertainty is expected to remain high. This could put some pressure on revenue over the near term, although the self-help measures being taken by the company could help to offset the impact of top-line challenges.

With Marshalls having increased dividends per share at an annualised rate of 18% in the last four years, it has proven to be a solid income stock. Since dividends are still covered 1.7 times by profit, further dividend growth could be ahead over the medium term. This could increase the appeal of the stock, with its 3.3% dividend yield having the potential to move higher in the coming years.

Changing outlook

BAE’s dividend growth potential could also be relatively impressive. The company is forecast to post a rise in earnings of 9% in the next financial year, which suggests that demand for its products is on the up. This is not a major surprise, since the US is increasing defence spending under President Trump, with further rises seemingly likely over the next couple of years. This could improve the company’s dividend yield of 3.6% for the 2018 financial year.

Even though the prospects for the defence industry are improving, BAE continues to offer a relatively low valuation. While the FTSE 100 is trading close to a record high, the stock has a price-to-earnings (P/E) ratio of around 15. Given its forecast growth rate next year, this puts it on a price-to-earnings growth (PEG) ratio of 1.9, which could prove to be a fair price to pay given its strong market position and possible tailwind from rising US demand.

As a result, now could be the right time to buy BAE for the long term. The company seems to offer a mix of income, growth and value appeal that could help it to beat the FTSE 100 and provide a boost to investors’ retirement savings.

The post Forget the State Pension: BAE is a FTSE 100 dividend stock that could boost your retirement savings appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of BAE Systems. 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.

Building market share

Staffs Concrete’s fleet of eight mixer trucks and two concrete pumps specialise in delivering small loads of ready-mixed concrete and screeds to customers in Staffordshire. The enterprise will sit well as part of Breedon’s existing mini mix operations, which serve the West, East Midlands and East Anglia. Chief executive Mike Pearce said the acquisition “further strengthens our overall position in a key market.” 

Breedon runs a big operation with, at a recent count, a cement plant, two cementitious import terminals, around 60 quarries, more than 30 asphalt plants, over 200 ready-mixed concrete plants and three concrete products plants. The firm supplies cementitious products, crushed rock, sand, gravel, asphalt, ready-mixed concrete, mortar, various concrete products and contract surfacing services.

Some investors are convinced that UK-facing cyclical businesses like this one are poised for a prolonged period in the economic sun, and recent results demonstrate Breedon is trading its concrete socks off right now. Last month’s full-year report revealed revenue up 43% compared to the year before, underlying earnings per share 19% higher and a reduction of 31% in net debt.

Strong trading

We’ve seen a similarly strong trading performance from landscape products supplier Marshalls (LSE: MSLH). Over the last five years, the share price is up around 230%, driven by robust annual increases in revenue and earnings. Much of the growth has been organic, but the October 2017 acquisition of CPM Group Ltd contributed to the revenue reported in January’s trading update, and Marshalls said the operation “has traded strongly since joining the Group.”

Marshalls is another UK-facing cyclical that could do well from here. The firm supplies hard landscaping products to the domestic, public sector and commercial-end markets such as aggregates, street furniture, minerals, stone cladding, paving, water management items, lighting, walling and mortars – all stuff that’s in high demand when economic conditions are booming and in low demand when conditions get tough.

So which stock should you buy? City analysts following Marshalls expect earnings to increase 11% during 2018 and 8% in 2019. They expect earnings at Breedon to rise 8% in 2018 and 11% in 2019, so there’s nothing much differentiating the two on earnings growth. Meanwhile, at today’s share price close to 416p, Marshalls forward price-to-earnings (P/E) ratio for 2019 sits at 16. At 80p, Breedon’s is also 16. Nothing between them on the P/E rating either. However, Marshall’s pays a dividend and expects to yield 3.7% in 2019, whereas analysts expect Breedon to start paying a dividend that year, which will come in at a yield of just 0.4%, or so.

We could say that Breedon offers greater value to investors than Marshall because of dividends, but I think the P/E ratings are too high for both firms at this mature stage in the economic cycle. So I’m cautious on both of them and will look elsewhere for investments to propel me to financial independence.

The post Should you buy multi-bagging stocks Breedon Group plc or Marshalls plc? appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

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

I think the clear answer is to invest in shares in top UK companies, but even then I’d say you need to set one clear priority. Warren Buffett famously relies on his number one rule of investing, “never lose money”. But if you don’t beat inflation then you will lose money in real terms.

Here are two companies that have been helping their shareholders beat inflation, and I reckon they’ll continue to do so.

International success

Portmeirion Group (LSE: PMP), a pottery company based in Stoke-on-Trent (and founded by the daughter of the designer of the eponymous Italianate Welsh village), has a solid track record of growing its earnings and paying progressive dividends.

Those dividends have been providing yields of better than 3% per year, and the payment of 34.66p per share announced Thursday for the 2017 year amounts to a 3.3% yield on the current share price of 1,049p at the time of writing. That alone would keep your investment pot running ahead of inflation, especially as the latest dividend was lifted by 7.5%, which is way ahead of inflation that’s currently running around 3%.

And though it’s had its ups and downs, the share price has gained 60% over the past five years, providing a total return of better than 75%.

The company, which owns the Royal Worcester and Spode brands (both of which are particularly popular in the USA), saw revenue climb by 10.6% during the year, with pre-tax profit up 13% and earnings per share up 9.2%. That seems easily enough to support the dividend, and with cash generation turning 2016’s year-end net borrowings of £2.3m into net cash of £1.6m, I view forecast rises for the next two years with confidence.

Growth plus dividends

Marshalls (LSE: MSLH) manufactures a range of materials and products for the home improvement and home building markets, supplying wholesale to a large number of builders and retailers among others. And it’s been a very profitable business for years.

Earnings per share more than trebled between 2013 and 2017, and over the same period the annual dividend roughly doubled to last year’s 10.2p per share. That provided a yield of 2.2%, and forecasters are predicting rises for this year and next which would lift the payment 28% by 2019, for a yield of 3%.

EPS has grown in double-digits for each of the past five years, and that’s likely to slow, which is expected, as growth can’t go on at that pace for ever. But I still see Marshalls as an attractive long-term investment which should eventually comfortably beat inflation. In fact, over the past five years, shareholders have seen their investments almost quadruple in value.

The company is strongly cash generative, and has the ability to grow by acquisition too — it acquired pre-cast concrete manufacturer CPM Group in November for £38.3m.

And along with full-year results this week, chief executive Martyn Coffey said: “The underlying drivers have remained positive in our main end markets and our sales and order intake have been strong in the first 2 months of 2018.“

If you stick to investing in companies like these which can beat inflation in the long run, you could even become a millionaire.

The post 2 inflation-busting small-cap stocks I’d buy with £2,000 today appeared first on The Twelfth Magpie.

More reading

• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?
• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Portmeirion Group. 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 business, which manufactures paving as well as an assortment of other landscaping products, reported on Wednesday that revenues crept 8% higher in 2017 to £430.2m, or 6% on a like-for-like basis (excluding the contribution of water management specialist CPM). This result pushed pre-tax profit to £52.1m, up 13% year-on-year.

And to the pleasure of income seekers Marshalls elected to give its progressive dividend policy a further dose of rocket fuel, hiking the full-year ordinary payout to 10.2p per share from 8.7p a year earlier.

On top of this, the FTSE 250 firm also paid a 4p per share supplementary dividend, up from 3p in 2016.

Commenting on the results, chief executive Martyn Coffey said: “Good progress has been made in the year executing the 2020 Strategy, notably the acquisition of CPM, and the ongoing self help programme to drive organic growth is progressing well. The underlying drivers have remained positive in our main end markets and our sales and order intake have been strong in the first 2 months of 2018.”

Looking good

Marshalls has a strong record of grinding out earnings rises year after year, and while there is clearly some danger to future expansion as Brexit-related concerns look set to persist, its ability to continue outperforming the market should allow it to keep growing in the medium term at least.

Besides, the West Yorkshire firm’s strong position in the expanding transport infrastructure and housebuilding segments provides earnings with a little more protection.

City analysts are expecting profits to rise 12% in 2018 and by an additional 7% next year, prompting expectations of further dividend growth too.

An ordinary dividend of 12.3p per share is forecast for this year and 13.1p for 2019, resulting in chunky yields of 2.7% and 2.9% respectively. And I wouldn’t rule out extra special dividends being shelled out either under Marshalls’s so-called 2020 Strategy.

It may be expensive, the business sporting a forward P/E ratio of 18.9 times. But in my opinion its super track record merits such a premium, as does the brilliant revenues potential created by the vast investment it is making in acquisitions as well as product development.

Reassuringly expensive

Domino’s Pizza (LSE: DOM) is another share whose brilliant growth and dividend prospects deserve serious attention.

In 2018 City analysts are expecting the takeaway giant to see just a 1% earnings rise, down from the double-digit percentage rises of recent years as consumer spending power dips. But Domino’s is expected to pick up the pace again from next year for which a 9% advance is predicted, underpinned by the company’s ambitious expansion programme.

What the FTSE 250 firm lacks in near-term growth appeal it makes up for in terms of dividends, however. Last year’s 9p per share payment is expected to rise to 9.7p in the current period and again to 10.4p in 2018. Consequently investors can gobble up handy yields of 2.9% and 3.2% for this year and next, respectively.

Domino’s trades on a forward earnings multiple of 20.3 times, but its robust position in the takeaway market makes it worthy of an expensive rating in my opinion.

The post 2 growth dividend giants I’d buy with £2,000 today appeared first on The Twelfth Magpie.

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• This 7.5% yielding passive income share is at a 13-year low! Time to consider buying?

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Domino's Pizza. 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.