In my opinion, this makes the company one of the best investments around to protect your portfolio against Brexit. No matter what the outcome, demand for soft drinks throughout Europe is unlikely to change as a result of Brexit.

What’s more, virtually all of the company’s products are sold in European markets, so if the UK economy struggles after a no-deal, Coca-Cola HBC should continue to profit. Indeed, thanks to its geographical diversification, and defensive product line up, management expects the overall impact from Brexit on the group to be “minimal.” 

I’m also attracted to the company’s dividend credentials. For the past five years, Coca-Cola HBC has increased its dividend at a rate of 10% per annum. Based on current figures, the payout is covered 2.3 times by earnings per share (EPS), which gives plenty of room for further payout growth. 

With EPS set to grow 19% over the next two years, in this period I reckon the dividend will grow faster than it has in the past. There’s also significant scope for earnings growth from current levels as management believes the European market is “fertile for price increases.” This tells me the outlook for Coca-Cola HBS’s dividend is extremely positive. 

Falling sales 

Talking of flowing liquids, Rotork (LSE: ROR), the market-leading producer of flow control products, is sliding today after the firm reported a 4% decline in order intake, or by 2% on an organic constant currency basis. 

These figures seem to imply that the company’s growth is going to slow in the near term, a reality that is at odds with the stock’s current valuation of 22.9 times forward earnings. I’m always wary of buying high-priced stocks for this reason. If growth doesn’t live up to expectations, then the resulting sell-off can be sudden and aggressive. I don’t want to be on the wrong end of a profit warning. 

With this being the case, I’m not a buyer of Rotork today. As of yet, we don’t know if this decline in order intake is a one-off, or a sign of things to come. If it is a sign of things to come, I reckon the downside from current levels could be significant, considering the current premium valuation investors are placing on the shares. 

The one redeeming feature of this business is its strong balance sheet. According to today’s trading update, Rotork had a net cash balance of £12.2m at the end of October. Unfortunately, this isn’t enough to convince me that the business is worth buying, and neither is the token dividend yield of 2%. I would much rather add Brexit-proof Coca-Cola HBC to my portfolio.

The post Why I’d buy this FTSE 100 dividend champ to protect against a no-deal Brexit appeared first on The Twelfth Magpie.

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

While this increase means that the firm now trades on a rather off-putting valuation of 31 times expected earnings for 2018, I still think the stock warrants attention from growth investors keen on achieving financial independence, especially after today’s positive interim update.

Strong order book

Group revenue climbed 12% to a record £37.9m in the six months to the end of June. At constant currency, this rise equated to a 17% improvement on the same period in 2017.

The above included a 4% increase in revenue from its Polyolefin Foams, thanks in part to the firm’s decision to increase capacity at its base in Kentucky, USA.

Even more impressive were sales figures relating to Zotefoams’s High-Performance Products. These jumped 82% over the period and now contribute 24% of total sales, compared to 15% a year ago. 

Collectively, this trading helped the company register a 64% jump in pre-tax profit to £4.6m.

Continuing the trend of consistent-if-modest dividend hikes, Zotefoams also announced a 3.1% increase to its interim payout this morning (to 1.97p per share). While the forecast 1.1% is hardly tempting, modest dividend increases are more preferable in my book to high yields that can’t be maintained.  

Ultimately, however, Zotefoams remains focused on becoming a far bigger beast. With three projects to expand capacity running to plan, CEO David Stirling stated that the company had commenced H2 with “a strong order book, a differentiated product portfolio and continued growth expectations across all business units“.

Returning to the valuation, it’s true that a lot of growth already appears priced in. Nevertheless, a P/E of 26 in 2019 — assuming expectations are met — looks far more palatable. This being the case, I wouldn’t blame growth hunters from keeping the firm on their watchlists.

Long-term hold? 

Also reporting half-year results this morning was actuator manufacturer and flow control company Rotork (LSE: ROR). Like Zotefoams, the £3bn cap’s shares have been on a roll, rising 52% over the last year and today’s positive numbers were — perhaps inevitably — also greeted with a drop in the stock price.

Revenue rose 14.8% to £331m over the six months to the end of June while pre-tax profit climbed 17.2% to £54.7m. Another reliable dividend-hiker, Rotork declared a 7.3% rise to its interim payout (2.2p per share). 

CEO Kevin Hostetler reflected that the company had witnessed “a continuation of the more favourable market trends” seen in Q4 of the previous financial year and had also received “several large orders” during Q1, contributing to a 13.3% rise in order intake over H1. Rotork expects “high single-digit” growth for the full-year and adjusted operating margins to be “slightly ahead” of those achieved in 2017.

Since the aforementioned orders was already known by the market, today’s fall smacks of profit-taking. That said, the announcement that an investment programme in areas such as service infrastructure and IT has been initiated might have also contributed, particularly as the amount of cash dedicated to this “will continue to increase through the year”.

Based on analyst projections, Rotork’s shares change hands on a punchy 28 times earnings following today’s fall. So long as your time horizon runs to years rather than weeks, I see no reason to jettison the stock as things stand.  

The post These growth stars could still help you achieve financial independence appeared first on The Twelfth Magpie.

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Paul Summers 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 stock that could be about to deliver a period of high growth. Reporting on Monday was a company which could be worth a closer look because of its strong earnings growth potential.

Impressive performance

The company in question is actuator manufacturer and flow-control company Rotork (LSE: ROR). It released a trading update which showed that revenue in the first quarter of its financial year increased by 10.2%, with order intake rising by 27% on an organic constant currency basis. This reflects a continuation of the more favourable market trends which were present in the latter part of 2017.

The company has also received several major orders that have helped to positively catalyse its top line. This means that it now expects revenue for the full year to increase in the mid-to-high single-digits versus the previous year.

In terms of profitability, Rotork is expected to post a rise in its bottom line of 9% in the current year, followed by further growth of 12% next year. Both of these figures would represent a marked improvement on its performance in the last couple of years, where the company has struggled to generate growth that is ahead of the wider market.

With the company focused on reinvesting capital in the business, it is in the process of laying the foundations for sustainable growth. As such, now could be the right time to buy it, with its strong cash flow and modest net debt levels suggesting that it has a solid risk/reward ratio.

Turnaround potential

Of course, Saga is not expected to perform as well as Rotork over the course of the current financial year. The over-55s specialist is forecast to report a fall in earnings of 5% as it seeks to reposition itself under a new strategy. This is intended to make it more efficient and leverage the relatively high levels of customer loyalty that the company enjoys.

Since Saga is forecast to return to positive earnings growth of 2% in the next financial year, its current price-to-earnings (P/E) ratio of 11 may prove to be relatively modest. Certainly, the company is experiencing a difficult period and remains somewhat unpopular among investors. But with a 7% dividend yield that is covered 1.4 times by profit, it seems to have a mix of value and income appeal.

Certainly, it may lack strong growth prospects at the present time. But with a diverse business model that appears to be strong on an underlying basis, it could prove to be a sound investment for the long term. That’s especially the case since the FTSE 100 trades above 7,000 points and some investors may feel there is a lack of value on offer in the wider index.

The post Why Saga’s share price could be about to skyrocket alongside this growth stock appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Saga. The Motley Fool UK has recommended Rotork. 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.

Clearly, there will be concerns among some investors that the company now may be overvalued. Profit-taking is a potential risk facing the company, since no share price ever rises in perpetuity. However, with a solid growth outlook and a valuation which is not overly high, the stock could continue to shine.

Improving outlook

Over the course of 2017 and 2018, Boohoo is expected to post earnings growth of around 28% per annum. This follows two years of double-digit earnings growth, and suggests that the company’s strategy is performing well. Although there is a risk to the business from a slowing UK economy, the group is geographically well-diversified. This means that its operational and financial performance could remain robust and that further double-digit profit growth could be recorded over a sustained period of time.

One factor which could make strong profit growth more likely is the company’s growth through acquisitions. It has thus far made several acquisitions in order to boost its top and bottom-line growth rates. This could help to maintain the company’s momentum and may mean it is worthy of a higher valuation.

Investment prospects

Of course, most stocks which rise significantly over a relatively short time period are likely to end up with a high valuation. Boohoo has a price-to-earnings (P/E) ratio of 85, which suggests that it may be overvalued. However, when its earnings growth rate is factored-in, it equates to a price-to-earnings growth (PEG) ratio of around 3. This still appears rather high, and there are cheaper stocks within the retail sector. However, with the company having exceptionally strong growth prospects over the long term, its current price level may prove to be rather cheap.

More growth appeal

It’s a similar story for another company. Rotork (LSE: ROR) is an actuator manufacturer and flow control company which released a positive trading update on Thursday. It showed a rise in order intake in the third quarter of 11.8%, with revenue increasing by 5.1%. It has seen a continuation of more favourable market trends witnessed in the first half of the year and expects to meet guidance for the full year.

With Rotork forecast to post a rise in its bottom line of 10% in the next financial year, it appears to have strong growth potential. Certainly, its PEG ratio of 2.2 may not be the lowest within the sector, but the business appears to have solid foundations and diverse operations through which to deliver sustainable growth in earnings. Therefore, from a risk/reward perspective, the stock seems to be worth buying alongside Boohoo. Their premium valuations seem to be a price worth paying given their long-term outlooks.

The post Buying Boohoo.Com plc could make you a millionaire in retirement appeared first on The Twelfth Magpie.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended boohoo.com and Rotork. 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.

Such a decline reflects the fact there was nothing particularly terrifying about the valve-builder’s latest update. Having said that, I reckon those seeking robust earnings growth in the near term and beyond should perhaps look elsewhere.

Rotork announced that organic revenues at constant currencies flatlined between January and June, at £299.7m. As a result, adjusted pre-tax profit slumped 7.5% at stable exchange rates, to £52m.

In more reassuring news, however, the firm announced that its order book at constant exchange rates had rise 16.5% during the first half, to £213m.

Following the results, newly-minted executive chairman Martin Lamb commented that “the slightly more favourable market trends seen towards the end of 2016 continued in the first half of 2017. In oil and gas, we have seen an improvement in levels of activity in upstream and although the midstream and downstream sectors remain subdued, there has been a gradual improvement in project activity levels.” 

Meanwhile, Lamb noted that the company had made “steady progress” across the water, power and industrial process markets.

Pump-builder in peril?

Rotork’s stock price slid lower in late July after the sudden departure of chief executive Peter France. The company said that the departure “[followed] a period of reflection by the Board, together with Peter, on the steps required to foster a return to higher growth and margin levels in what is likely to be a generally lower-growth macro environment.”

These steps included bolstering investment in key areas like product innovation and customer service, as well as improving greater efficiencies throughout the business, the firm said.

The outlook for Rotork is clearly uncertain, and not just because conditions in the critical fossil fuel market remain extremely difficult. While Brent values may have sprung back above $50 per barrel in recent sessions, black gold prices will likely find it hard to make much more ground as market oversupply worsens.

The City expects Rotork to enjoy a 7% earnings uptick in 2017, and a 9% rise is slated for next year. Still, I reckon a subsequent forward P/E ratio of 21.8 times fails to reflect the strong possibility of earnings growth disappointing in both the near term and beyond.

On the floor

Carpetright (LSE: CPR) is another London-quoted stock whose growth picture is looking far from assured at the present time.

Tuesday brought another set of worrying numbers from the British retail sector, this time being the turn of the BRC to chime in. The consortium declared that like-for-like sales rose just 0.9% in July, while sellers of non-food items saw takings contract 0.7% year-on-year.

This fresh batch of murky data comes as little surprise as inflation-ravaged shoppers rein in excessive spending, and particularly on non-essential items like furniture. And against this backcloth City analysts expect Carpetright to endure a 7% bottom-line decline in 2017.

The number crunchers are predicting an 18% earnings bounce-back next year, although I can’t help but feel that this is looking a tad optimistic right now. I reckon investors should steer well clear despite the retailer’s low paper valuation of 10.9 times.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Rotork. 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.

Trading update

Reporting on Monday was component, modules and services designer and supplier Avingtrans (LSE: AVG). It announced an additional contract option with Sellafield. The contract is worth an extra £11m in revenue to the business, the majority of which is expected to be spread equally over the three years to 2021. It builds upon the company’s 2015 contract with Sellafield, which was worth up to £47m over a 10-year period.

As well as the announcement of a contract win, Avingtrans also reported that revenue for the year to 31 May was slightly behind management outlook. Despite this, it closed the year with adjusted profit before tax that was marginally ahead of internal expectations. It also has net cash of £26.2m and a strong order book for its Energy and Medical division.

Looking ahead, it is expected to record a rise in pre-tax profit of around 300% in the current financial year. Its pre-tax profit is due to rise from £0.3m last year to £1.2m in the 2018 financial year. This puts it on a price-to-earnings growth (PEG) ratio of just 0.1, which suggests that it could offer enticing share price growth alongside relatively high risk.

Valuation challenges

While Avingtrans may offer a wide margin of safety at the present time, actuator manufacturer and flow control company Rotork (LSE: ROR) seems to be highly priced. Although it has upbeat earnings growth prospects of 8%-9% per annum during the next two years, its valuation seems to fully factor-in its outlook. For example, it trades on a price-to-earnings (P/E) ratio of 24.2. This translates into a PEG ratio of 2.8, which is high, even at a time when the FTSE 100 is close to an all-time record.

Certainly, Rotork is a high-quality business which has a sound track record of growth. However, its shares seem to offer little upside potential after rising by 23% during the course of the last year.

Furthermore, their income prospects may also be somewhat limited. The company currently yields 2.3% from a dividend which is covered 1.9 times by profit. This indicates that while there is dividend growth potential on offer, there may be stronger options available elsewhere. A number of stocks currently have higher yields than inflation, while others have more scope for rapid rises in shareholder payouts. As such, it may be worth awaiting a lower share price before buying a slice of Rotork for the long term.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended Rotork. 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.

Margins under pressure

Rotork’s third quarter performance was broadly the same as in the first half of the year. On an organic constant currency basis, Rotork’s revenue increased by 5.3% versus the same period of last year. Its investment in infrastructure has improved its operational performance, while its cost reduction programme is also progressing well.

In terms of its reported sales growth, Rotork’s top line rose by 28.9%. This benefited from weaker sterling and the contribution from acquisitions. In fact, currency changes are now expected to deliver a 10% benefit to both full year revenue and profit. However, Rotork continues to experience a challenging trading environment. This is causing margins to come under pressure, with this situation likely to continue over the medium term.

What a drag

It’s a similar story for Spirax-Sarco. The global macroeconomic environment remains in the low-to-no growth situation that was a key theme of 2015 and the first half of 2016. As a result, the company’s organic sales growth in the first ten months of the year slowed modestly from that achieved in the first half of the year as several large projects were not repeated.

Even though it faces a tough operating environment, Spirax-Sarco is on track to meet full year expectations. Its performance will benefit from a revised strategy, which seeks to deliver improved performance versus its markets through being more effective in identifying and generating engineered solutions to help customers with sustainability, efficiency and productivity. As such, Spirax-Sarco appears to be well-placed on a relative basis, although a poor trading environment is likely to be a drag on performance.

Uncertain outlook

Looking ahead, Rotork is forecast to increase its earnings by 7% in the next financial year, while Spirax-Sarco’s bottom line is expected to rise by 11%. Both of these figures are highly impressive given the challenges they face. They show that the two companies have the right strategies and sound business models, which bodes well for the long term.

However, the market appears to have already priced in their upbeat performance. In Rotork’s case, it trades on a price-to-earnings growth (PEG) ratio of 3.1, while Spirax-Sarco’s PEG ratio is 2.1. Both of these figures lack appeal and indicate that there is little, if any, margin of safety on offer.

Given the uncertain outlook both companies face and their somewhat modest underlying growth rates, this means that neither of them offers investment appeal at the present time. As such, it may be best to look elsewhere for more favourable risk/reward ratios.

The post Why I’d sell Rotork plc and Spirax-Sarco Engineering plc after today’s results appeared first on The Twelfth Magpie.

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

With this in mind, let’s take a look at two prime candidates.

Go with the flow

FTSE250 constituent, Rotork (LSE: ROR) is a market leading actuator and flow control company. In other words, its products are needed wherever gases or liquids are managed. In addition to its four divisions (Controls, Fluid Systems, Gears and Instruments), the £1.9bn cap also provides “worldwide planned and emergency actuation services including: actuator overhauling, health checks, retrofit, preventative maintenance and extended scope projects”.

After a tricky couple of years, Bath-based Rotork’s shares have enjoyed a resurgence of late, no doubt helped by a recovery of sorts in the oil price. Despite boasting an excellent history of returns on capital and solid operating margins, the company’s shares could be purchased for as little as 155p when oil hovered around the $30 mark back in February. They start today at 221p, underlining the importance of buying quality companies when others are deserting them. But does this mean investors have missed the boat? 

With a forecast price-to-earnings (P/E) ratio of just under 23, Rotork’s shares might not seem cheap but, as mentioned in a previous article, the P/E should only be regarded as a starting point when it comes to scrutinising a company’s investment case. Although net debt has increased in the past couple of years, Rotork’s balance sheet looks strong. Recent levels of free cashflow have also been higher than earnings, suggesting that the company is turning into something of a cash machine for its investors.

Should the oil price recover further, I wouldn’t be surprised to see Rotork’s shares return to and rise above their 2013 peak of just under 300p. Factor-in our impending departure from the EU and the fact that Rotork exports a lot of what it produces and the company looks like a solid pick. While unlikely to attract income-hunters, a well-covered yield of 2.3% is nevertheless welcome, particularly in these low-rate times.

Pump up your portfolio

Engineering peer Spirax-Sarco (LSE:SPX) is actually two businesses. One is the eponymous world leader in the design, manufacture and provision of steam and thermal energy management solutions. The other, the Watson-Marlow Fluid Technology Group, specialises in producing mechanical pumps and associated fluid path technologies.

Like Rotork, Spirax has an excellent history of high returns on capital (consistently above 20%). Operating margins are also superb relative to the market as a whole. The company’s net cash position is yet another positive, particularly for those investors who like to avoid adding heavily indebted companies to their portfolios.  Factor-in Brexit and the performance of the company’s shares in recent months makes perfect sense.  

Spirax’s shares have jumped over 30% since June, making them even more expensive than Rotork’s on a forecast P/E of almost 26.  While sterling’s plight may already be reflected in this price and today’s yield of around 2% isn’t anything to shout about, I can’t see investors abandoning the company in a hurry.

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

Growth story?

Shares in Dialight (LSE: DIA) rose by 2.6% in morning trading, to 579p, on the back of a pleasing set of first-half figures. Revenue actually fell slightly, but underlying operating profit came in at 2.5 times the same period last year, or £4.2m, although there was a statutory pre-tax loss of £7.1m as the firm emerges from its turnaround plan.

Underlying EPS picked up by 44% to 7.8p, and the firm turned an £8m net debt at the H1 stage of 2015 into net cash of £7.2m. Chief executive Michael Sutsko spoke of greater revenue visibility with second half orders up 10%, and told us the board is “confident of making progress this year and beyond“.

After a couple of erratic years, the LED technologist is forecast to boost EPS by 49% this year as Mr Sutsko said expectations are unchanged. That would put the shares on a P/E of 29, but a further 60% in earnings growth pencilled-in for 2017 would drop it to 18, and we have likely PEG ratios of 0.6 and 0.3 for this year and next. Dialight could be an attractive growth opportunity.

Big drop

Rotork (LSE: ROR) shares had been picking up strongly with a 40% climb since late February until Monday’s close. An 8.6% drop to 195p has taken the shine off that a little on the occasion of the company’s first-half update. The firm, which makes valve, sluice gate and damper actuation products for the oil, gas, power and waste industries, reported falls across the board. Revenue is down 3.7% to £263.9m, with adjusted pre-tax profit down 21.8% to £50.1m and adjusted earnings per share down 21.9% to 4.25p. But at least the interim dividend was maintained at 1.95p per share.

The slump is largely down to the depressed oil price, which has now fallen back below $40 per barrel again, and the knock-on effect on orders from the oil and gas business. According to chief executive Peter France, full-year margins should be lower than 2015’s as he said that “activity in the oil and gas markets will remain subdued, and the timing of order placement will be difficult to forecast“.

Rotork will almost certainly do better when oil finally gets back to more profitable levels, but in the meantime a forward P/E of 21 looks demanding to me.

Marketing magic

Direct marketing firm 4imprint Group (LSE: FOUR) has seen its shares more than double in two years and six-bag in five. Against that a modest 1.3% rise to 1,498p on the day of first-half results might not be too exciting. But the figures do look good — revenue is up 17% to $270.2m with underlying pre-tax profit up 18% to $14.3m and underlying EPS up 19% to 37.28 cents. The interim dividend was lifted 35% to 16.32 cents (or 59% to 12.3p thanks to the drop in sterling).

The bulk of the firm’s revenue comes from North America, so there’s no real Brexit risk here. So with a solid record of rising earnings and two more years of growth forecast this year and next, is it too late to buy the shares? Well, we’re looking at P/E multiples of around 20 with PEG ratios above one, and that suggests the super-bargain days are behind us.

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

As such, its sales growth for the four months to the end of April was in-line with a year ago. But Spirax-Sarco sees an uncertain time ahead for industrial production growth and it’s therefore intent on keeping a tight control of costs. Furthermore, it’s focused on self-generated growth in order to reduce reliance on the market.

With Spirax-Sarco trading on a price to earnings (P/E) ratio of 22.9, it seems to be very expensive given the challenges which it’s currently facing. And while its bottom line is expected to grow 6% this year and by a further 5% next year, the company’s rating could come under pressure and send its shares lower after gaining 235% in the last 10 years.

Expect a fall in earnings

It’s a similar story for Spirax-Sarco’s industrial sector peer Rotork (LSE: ROR). It trades on a P/E ratio of 20.8 and yet it’s expected to record a fall in earnings of 13% in the current year. This has the potential to cause investor sentiment in the stock to deteriorate and push Rotork’s share price down following a 4% gain since the turn of the year.

Of course, Rotork is forecast to return to positive earnings growth next year. But growth of 4% in 2017 may be insufficient to cause a step change in investor sentiment. With a yield of just 2.9%, Rotork seems to lack appeal for value, growth and income investors. Certainly, it is a relatively high-quality business which could be a top performer in the long run but with challenges ahead, it may be a stock to watch rather than buy.

Challenging conditions

Meanwhile, Rolls-Royce (LSE: RR) is also expected to endure a tough 2016. That’s due to challenging operating conditions and also  short-term pain as new management seeks long-term gain. As such, Rolls-Royce’s net profit is set to decline by 58% this year and this could cause investor sentiment to come under a degree of pressure in the coming months.

However, Rolls-Royce is set to bounce back next year with earnings growth of 33%. This has the potential to boost its share price and with the company’s price-to-earnings growth (PEG) ratio of only 0.5, it seems to offer a wide margin of safety. This means that even if earnings forecasts are downgraded, Rolls-Royce could still outperform its sector and the wider index. So, while it is still a relatively risky buy due to the major overhaul which is due to take place as it seeks to improve its financial performance, Rolls-Royce seems to be an excellent stock to help make you rich.

The post Are Rolls-Royce Holding plc, Rotork plc and Spirax-Sarco Engineering plc three stocks to make you rich? appeared first on The Twelfth Magpie.

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