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.

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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, even though this business is relatively young, it is growing like a weed, and at its current speed, it won’t be long before it graduates off AIM and moves into the big league. 

The results are in 

Today Tatton published its maiden interim results for the six-month period ended 30 September following its IPO in July. 

During the period, discretionary assets under management expanded 15% (since March 2017), and AUM grew by 33% year-on-year. Growth in AUM helped the company expand revenue by 31% to £7.3m and adjusted earnings before interest and tax lept by 56% year-on-year. 

Due to the costs associated with its IPO, Tatton reported a profit before tax of only £0.5m for the period, but going forward, IPO costs should not be repeated indicating strong profit growth in the years ahead. 

As well as robust underlying earnings growth, the firm reported a cash balance of £10.5m at the end of the period. 

Growth ahead

Tatton’s solid results have enabled management to announce today an inaugural interim dividend of 2.2p per share. This looks as if it could be a sign of things to come. 

The group is a relatively unique business as it offers on-platform-only discretionary fund management, regulatory, compliance and business consulting services to investment advisors across the UK. These services allow investment advisors to lower costs and concentrate on clients’ needs, rather than focusing on time-consuming, costly compliance issues. 

As more advisors flock to the firm’s offering, City analysts expect Tatton’s earnings per share to grow by 6% this year, and 19% for the fiscal year ending 31 March 2019. Considering the young age of the company, and the growth reported today, I believe that these could be conservative forecasts. Based on the current City estimates, however, the shares are trading at a forward (YE 31 March 2018) P/E of 20.4, which seems to me to undervalue this high-growth business. 

Reach for the stars

Over the past 12 months, shares in Gateley Holdings (LSE: GTLY) have charged higher by 55% as the law firm has improved its offering through acquisitions. Today the company announced that revenue for the six months ended 31 October grew 9.8% and adjusted EBITDA expanded 6.3%. Substantial investment in its client offering held back the group’s overall performance. 

Still, for the full year City analysts are predicting earnings per share growth of 13%, followed by an increase of 7% for the fiscal year ending 30 April 2019. On the back of these forecasts, the shares are trading at a forward P/E of 15.8 falling to 14.9. Considering the company’s steady earnings growth, a mid-teens multiple seems to me to be suitable for the shares. 

I believe the outlook for the group is bright because the market for professional services (it provides legal advice to the financial, corporate and property sectors) has only grown for the past few decades, and it does not look as if this trend will end anytime soon. And as financial sector regulation becomes more complex, it should be able to capitalise on this opportunity.

As well as steady growth, it also supports a dividend yield of 4.2%.

The post 2 small-cap growth stocks that could still make you fabulously wealthy appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

Not heard of it? The company offers discretionary fund management (DFM) and IFA and mortgage support services, and things sound like they’re going well. Funds under management on its DFM platform rose to £4.44bn, from £3.85bn at 31 March — and fund inflows are apparently running at more than £80m per month.

The firm’s IFA services arm, Paradigm Partners, has seen membership rising to 356 firms (from 352 in March), with Paradigm Mortgage Services seeing membership up to 1,143 firms.

Tatton doesn’t have much public history, having only floated on AIM as recently as July 2017, but analysts are already predicting good things.

Attractive valuation

The forward P/E for the end of this year might look a little high at around 21, but forecast rises in earnings per share would drop that to 17 by 2019, and indications of a strongly progressive dividend suggest a 2019 yield of 4.1%.

If that comes off, it will be a cracking start to life on the stock market.

Chief executive and founder Paul Hogarth spoke of “the increasing demand for a low cost DFM service to the mass affluent market place served by the IFA sector“, and that looks to me to be the company’s main attraction — it’s offering a range of closely related services which should feed into and support each other.

Despite the economic uncertainty we currently face (or perhaps even because of it), I reckon Tatton’s services should be in demand from its targeted clientele sector in the coming years.

Cash from rubber

Turning to a wildly different sector, I’m quite taken by the fundamentals exhibited by Anglo-Eastern Plantations (LSE: AEP). The company produces palm oil and rubber from plantations across Indonesia and Malaysia, and both of those commodities are in huge demand — though ethical issues regarding the destruction of rain forest in places like Borneo might put some investors off.

Over the last 12 months, the Anglo-Eastern share price has soared by 85% to 870p, with some of that surely due to impressive interim results. 

Revenue in the half climbed by 70% to $146.9m, with pre-tax profit up 83% to $31.6m and earnings per share (EPS) more than doubling to 46 cents. Total net assets at 30 June stood at $470.6m (approx £357m) — and that’s more than the firm’s market capitalisation of £346m, so the shares are trading at a discount.

Discounted valuation

On the P/E front, the shares are looking attractively valued to me, despite their impressive appreciation over the past year. With EPS expected to grow by 83% this year, we’re looking at a multiple of only 7.2 and a PEG ratio of a mere 0.1 — growth investors usually get excited by anything under 0.7, but we do have to temper this with Anglo-Eastern’s erratic year-on-year earnings.

The business of investing heavily in new plantations and not seeing profit from them until a few years later would account for some lumpiness in earnings, but that really shouldn’t matter to long-term investors.

The company has several biogas plants up and running now which provide electricity that it will sell to the national grid, in Bengkulu, Kalimantan and North Sumatra, and that will add a little to the bottom line.

There could be environmental hurdles ahead, but the shares look good value to me.

The post Two overlooked bargain growth stocks I’d buy today appeared first on The Twelfth Magpie.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Apple. The Motley Fool UK has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. 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 financial services star therefore remains locked at recent two-month highs following a stellar run in the lead-up to today’s release. And I would not be surprised to see it resume its upward path in the very near future.

Tatton, which provides on-platform discretionary fund management (or DFM) and IFA support services, advised that trading came in line with expectations between April and September. At its on-platform DFM division funds under management stood at £4.44bn at the end of the period, up from £3.85bn six months earlier.

The result prompted chief executive Paul Hogarth to declare: “This growth is further evidence of the increasing demand for a low cost DFM service to the mass affluent market place served by the IFA sector, which the group is ideally placed to capitalise on.”

The Cheshire-based business has witnessed terrific fund inflows at a run-rate exceeding £80m per month, although the performance of its DFM division was not the only cause for celebration. Indeed, member numbers at Tatton’s Paradigm Partners IFA services arm increased to 356 IFA businesses as of September from 352 in March. And at Paradigm Mortgage Services the number of mortgage firms swelled to 1,143.

Dividends dancing higher?

Against this backcloth it is hardly a shock to find brokers predicting great earnings growth at Tatton in the present year and beyond.

For the period concluding March 2018 the firm is predicted to deliver earnings growth of 6%, and surging business flows are expected to drive growth to 19% in fiscal 2019. I reckon a forward P/E ratio of 20.4 times is fair value given the serious momentum seen across Tatton’s operations.

And there is a lot for dividend seekers to sink their teeth into, these predictions of meaty profits expansion being predicted to feed into very-healthy yields. An anticipated 6.5p per share dividend for this year yields a terrific 3.5%, while a projected 7.8p dividend for 2019 yields 4.1%.

Gobble up Greencore

I also reckon those seeking hot dividend expansion could do a lot worse than check out Greencore (LSE: GNC).

City analysts are expecting earnings to have fallen 2% in the period ending September 2017, although this is not predicted to have put paid to Greencore’s progressive dividend policy — a reward of 5.9p is currently anticipated, up from 5.47p last year.

And assisted by an anticipated return to earnings expansion in the current year (an 11% increase is projected), shareholder rewards are expected to rise to 6.3p. As a result the yield clocks in at a decent 3.4%.

Greencore continues to witness solid demand growth in both the UK and US, with the ‘Food To Go’ foods segment driving business at home, and recent acquisition activity Stateside boosting revenues there. As a result sales on a pro forma basis popped 11.8% higher during quarter three of the last fiscal year, to £636.5m.

I reckon Greencore is a great pick right now given its impressive sales outlook, and particularly in light of its ultra-low forward P/E ratio of 10.8 times.

The post 2 dividend kings you might want to consider today appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Greencore. 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.