A brilliant bet

William Hill (LSE: WMH) is up against it right now. The bookmaker suffered an eye-watering profits fall last year as it suffered from fresh regulatory action in the UK and the reduction of maximum stakes on fixed-odds betting machines.

It’s going to take some time for the FTSE 250 to adjust to these changes and the lost revenues from its money-spinning machines. It’s why City analysts are expecting another big bottom-line drop (by 48%) in 2019.

On the plus side, though, it could be argued William Hill’s low forward P/E ratio of 14.6 times bakes in these troubles. And given the company’s longer-term outlook remains strong, underpinned by the international rollout of its online operations, and in particular its drive into the US, I reckon this makes it a great value pick.

City analysts expect earnings growth to return in 2020 and that William Hill can therefore afford to keep paying big dividends in the meantime. This means that the dividend yield for this year sits at a princely 5.6%.

Poised to jump?

Tyman (LSE: TYMN) has proved itself to be a great dividend grower over the past half a decade, thanks to solid and sustained profits growth over that period.

It’s hardly front page news that City analysts, in forecasting extra bottom-line progress through to the close of next year (a 7% rise is predicted for 2019), are also expecting shareholder payouts to keep rising through this period too. And for this year this leaves a big 5.1% yield.

The investment community remains reluctant to buy the door and window component manufacturer because of the poor condition of the US newbuild market. But with home loan conditions there improving of late, it’s possible that Tyman’s end markets will begin to improve, giving room for its share price to surge again.

The small-cap’s low prospective P/E multiple of 8.6 times could provide further ammunition for bouts of fresh buying activity too.

One last great buy

My final selection is Charles Taylor (LSE: CTR), a splendid momentum stock which offers a chunky 5% forward yield. The professional insurance services provider is expected to endure a small earnings reversal in 2019. But thanks to its strong long-term outlook it’s predicted to keep lifting dividends.

Charles Taylor’s profits might have been pummelled by a series of exceptional costs last year but the pain it endured should go some way to help it achieve its long-term objectives.

Acquisitions made in the last year include those of claims services specialists FGR of Chile and Aasgard Summit in the US, moves that help the small-cap in its quest to become “a joined-up claims services business with global scale.” And its presence in Latin America was given an almighty boost with the purchase of technology and software giant Inworx too.

At current prices, Charles Taylor boasts a prospective P/E ratio of 9.2 times. In light of its exciting growth strategy, I would consider the insurance services star far too cheap right now and therefore an exceptional buy.

The post 3 embarrassingly-cheap dividend stocks (with 5% yields) I’d buy today appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

And as it builds on its position in the market, I believe shares in the firm have the potential to double over the next few years.

Double your money

When Cineworld first announced that it was planning the £4.5bn deal for Regal, I was initially sceptical that management could make it work. The business was taking on a tremendous amount of debt to expand in a region where UK companies have traditionally struggled.

But so far, everything seems to be going to plan. Back in August, the company announced the integration process is ticking along nicely, and management now expects to exceed the initial $100m cost synergies target it proposed when the merger was first announced. During the first half of the year, the opening of six new cinemas with 56 screens helped drive a 10.8% increase in pro forma revenues, and adjusted cash profits jumped 14.1% year-on-year.

As long as the company can maintain this performance, I believe the shares have the potential to double from current levels. For the full year, City analysts have pencilled in earnings per share (EPS) of 20.5p, giving a forward P/E of 14.4 for 2018, rising to 25p for a forward P/E of 11.8 for 2019. In comparison, the stock’s five-year average P/E is just under 24. A return to this multiple based on current City earnings projections for 2019 implies the shares could be worth as much as 600p, a little over 100% above the current level. As well as this capital gains potential, there’s also a dividend yield of 3.8% on offer for investors.

So overall, as Cineworld continues to grow and pushes ahead with the integration of its new US business, I think there’s significant potential for the stock to double from current levels.

Earnings growth 

Another business that I believe has significant capital growth potential is Tyman (LSE: TYMN). Over the past few weeks, shares in this supplier of components to the door and window industry have lost around a fifth of their value on no news flow. 

Some of these losses have been reversed today after the company told investors that it is trading in line with market expectations for the full year. The market is expecting, according to data compiled by Tyman itself, the group to report underlying operating profit growth of as much as 13% for 2018. EPS are expected to jump 60%.

Based on these numbers, the stock is trading at a relatively undemanding forward P/E of 9.8, falling to an estimated 8.8 for 2019. While Tyman is not as cheap as Cineworld, I still think that it has significant potential to rally from current levels. 

Indeed, investors have previously been willing to pay as much as 15 times earnings for it, and as growth returns, I wouldn’t rule out a return to this multiple, giving a possible upside of around 48%. A dividend yield of 4.4%, in my opinion, only adds to the stock’s appeal.

The post Why I believe this FTSE 250 dividend stock could double appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

For this piece I’ve picked out a cluster of lesser-known shares whose long-term outlook remains just as compelling. Take a look, they could make you a fortune!

Insurance services star

Small-cap Charles Taylor’s (LSE: CTR) latest financials released this month may have prompted fresh selling, but I believe that market-makers may have been a bit hasty in their actions.

Sure, news of a 95% pre-tax profit drop from January to June was a shocker, but this was a reflection of one-off costs including charges relating to acquisitions and office moves. I’m more interested in the announcement that revenues blasted 21% higher to £123.4m in the first half, a result that shoved adjusted profit before tax 10% higher to £8.5m.

The result was encouraging enough to prompt Charles Taylor, which provides professional services to the insurance industry, to raise the interim dividend to 3.48p per share. City analysts think that the full-year dividend will rise to 11.7p per share, a figure that yields a fatty 4.7%. With the business strengthening through M&A to bolster its global footprint, I am confident that dividends should keep on barging higher along with profits.

Build a fortune

Building materials giant Costain Group (LSE: COST) is also a business that has been lifting dividends at quite a pace in recent weeks.

The infrastructure specialist raised the half-time dividend by 8% on the back of August’s sunny financial update, to 5.15p per share. Revenues ducked 12% between January and June to £772.9m on the back of “a lower level of large capital project activity” at its Infrastructure division. But this could not stop underlying pre-tax profit rising 17% to £21.4m to reflect the work Costain is undertaking to boost margins.

Investors need not worry about the sales drop-off in the first half either because its order book remains strong. According to the small-cap it boasted a “higher quality order book” of £3.7bn as of June, nine-tenths of which related to repeat business.

City brokers believe Costain will have the strength to raise the dividend to 15.5p per share this year. And this results in an inflation-mashing 3.7% yield.

A clear view

Tyman (LSE: TYMN) has proved to be a dream for investors seeking dividend growth in recent years, the manufacturer of door and window parts having almost doubled the annual payment during the past half a decade.

I’m confident that its major exposure to the strong trading territories of North America and Europe, allied to its growing footprint in the emerging markets of Asia and Africa should keep both profits and dividends growing at quite a rate as well.

And City brokers share my optimistic take, an anticipated 12p per share reward yielding a not-too-shabby 3.4%. With Tyman also having the financial strength to embark on additional earnings-boosting acquisitions I am confident that the small-cap should also prove a lucrative investment in the years to come. Just this month its SchlegelGiesse arm splashed out on Italian door-and-window-handles-and-accessories manufacturer Reguitti, along with its sister brands Tropex Design and Jatec, to boost its product portfolio still further.

The post 3 unknown but amazing dividend growth stocks I’d buy now and hold for a decade appeared first on The Twelfth Magpie.

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• £1,000 buys 531 shares in this UK defence and nuclear stock that’s tipped to soar

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.

If this whetted your appetite then step this way: the two tiddlers I’m looking at could also make you a fortune in the years ahead, and have the added bonus of offering above-average dividend yields.

Making an entrance

It didn’t surprise me when the Tyman (LSE: TYMN) share price spiked last week in response to its latest financials.

In the statement covering the six months to June, the window-and-door-component-builder noted that revenues swept 6% higher, to £274.9m, a result that drove underlying pre-tax profit up by the same percentage to £33.3m.

Tyman is reaping the fruits of strong North American markets and the ongoing recovery in the Europe, Middle East, Africa and India (EMEAI) block, conditions that look set to underpin solid earnings growth in the near term and beyond. And investors should also be encouraged by the company’s ability to spot exceptional takeover targets and get them firing from the first day. Its purchase of Dallas-based Ashland for $101m in March is already performing better than expected, and is predicted to be profits-enhancing in 2018, a full year ahead of schedule.

City analysts agree with my positive take, pencilling in profits increases of 5% in 2018 and 10% in 2019, meaning Tyman can be picked up on an undemanding forward P/E multiple of 12.3 times. An added bonus is that these predictions provide the bedrock for them to predict further dividend growth to 12p and 12.8p for this year and next respectively, numbers that yield a chunky 3.5% and 3.7%.

That 9% yielder

While much of the high street is under pressure as consumer spending power wilts, I am convinced that N Brown (LSE: BWNG) has the substance to ride through these troubles and deliver excellent long-term returns.

The revenues rise in the three months to May was reassuring rather than rambunctious, up 0.4%, but it goes to show how its plus-size and over-50s ranges remain in demand even in extremely challenging retail conditions. Its sales resilience also owes a debt to the success of its advertising campaigns, not to mention the results of its ‘Fit 4 the Future’ IT transformation projects, like creating a more personalised service for its website users.

Indeed, I’m really interested in how the company is doubling-down on the online shopping segment and what this means for the future of its key labels. Internet sales of its so-called Powerbrands like Jacamo and JD Williams rose 9% in the last quarter.

So City analysts are expecting N Brown to bounce from a predicted 1% earnings decline in the year to February with a 5% rise the following year. This should give the firm the confidence to keep the dividend locked around current levels at 14.23p per share meaning share-pickers can enjoy a staggering 9.6% yield.

What’s more, at current prices, N Brown changes hands on a dirt-cheap forward P/E ratio of 6.5 times. This factors-in the possibility that tough retail conditions drag out longer than expected. Indeed, I reckon this low valuation leaves plenty of upside as the company’s online operations go from strength to strength.

The post 2 small-cap dividend stocks that could be millionaire-makers appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

Sure, its share price may have risen 50% over the course of the past 12 months. But a forward P/E ratio of 14.9 times, below the accepted benchmark of 15 times which indicates great value for money, suggests that the FTSE 250 firm remains undervalued by the market.

The specialist recruiter underlined its impressive momentum when it advised in April that net fee income jumped 17% at constant currencies between January and March, to £88.5m. While income rose 6% in the UK, rises of 11% in Asia Pacific and 32% in Europe put this respectable increase into the shade.

Robert Walters has seen earnings surge by double-digit percentages in previous years but, reflecting the stresses in its home marketplace as the economy slows, City boffins are expecting growth to cool to 4% this year before accelerating again next year — an 8% rise is predicted for 2019.

Dividends have grown by 123% over the past five years and the Square Mile expects payouts to keep expanding, albeit at a slower pace than previously. Last year’s 12.05p per share reward is predicted to step to 13.8p in the present period and again to 15.3p the following year.

These figures may be handy rather than spectacular, the projections yielding 2.1% and 2.3% respectively. However, Robert Walters’ brilliant progress in abroad makes it a great bet for those seeking strong and sustained dividend increases year after year.

Open the door to terrific returns

Unlike Robert Walters, Tyman (LSE: TYMN) has endured a much more tumultuous time in 2018 (or since the autumn, in fact) as it has suffered a combination of rising costs and flagging performance on the other side of the Atlantic.

And the door and window parts manufacturer flagged up some of these problems again this month, advising that “input costs, particularly for metals, remain volatile.”

However, there was still plenty to cheer in the latest trading release. Acquisition activity has seen it build a robust foothold in North America and, with the business noting that these markets “continue to expand,” sales at the AmesburyTruth division have risen since the start of the year. And what’s more, its SchlegelGiesse arm has experienced an uptick in its order book from Europe, Middle East, Africa and India (EMEAI) countries, it said.

City analysts are thus predicting further earnings growth in the near-term — rises of 2% and 11% are forecast for this year and next — and this feeds into expectations of more dividend progression as well.

The company has almost doubled the annual payout during the last half-decade, and it is expected to raise the dividend to 11.8p per share from 11.25p in 2017, and again to 12.7p in 2019.

These figures yield a chubby 3.6% and 3.9% respectively. When you throw an ultra-low forward P/E multiple of 12 times into the bargain, I reckon Tyman provides plenty of bang for your buck.

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

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

An indifferent reaction to a strong trading update from Tyman (LSE: TYMN) in March has exacerbated the poor share price performance that has afflicted the door and window parts manufacturer in 2018.

Tyman had failed to recover from the cross-market washout that set in during mid-January, and it is now languishing around one-year lows having shed almost 25% of its value since the year’s peaks set around the start of the year.

However, I believe this weakness provides a prime buying opportunity for long-term investors, and particularly those with a love of dividend shares.

A window of opportunity

Tyman first suffered the wrath of the market in November after warning that profits would fall short of predictions on a blend of higher input costs and troubles for its North American operations.

The London company’s full-year financials released this month were much more encouraging, even if share selectors have reacted with a shrug of the shoulders. Despite its recent troubles across the Pond, Tyman still saw revenues jump 14% in 2017 to £522.7m, or 2% on a like-for-like basis. This pushed underlying pre-tax profit 10% higher to £68.3m.

Sales leapt last year thanks in no small part to impressive performances from the recently-acquired Bilco and Giesse units, purchases that have significantly bolstered Tyman’s presence across emerging and developed economies alike and provide exceptional revenues opportunities in the years ahead. And the business doesn’t intend to let up on the earnings-boosting acquisitions just yet — it also snapped up North American door and window specialist Ashland Hardware earlier this month.

The UK is likely to remain a difficult spot for Tyman a little longer, but with North America, Europe, Latin America and the Middle East all showing signs of strong momentum, it looks like profits should keep moving higher.

Indeed, City analysts are tipping growth of 3% and 10% in 2018 and 2019 respectively. And these figures create a dirt-cheap forward P/E ratio of 10.6 times.

What’s more, these forecasts feed through to predictions of further dividend growth. Last year’s 11.25p per share reward is anticipated to rise to 11.9p this year and again to 12.8p in 2019.

Such figures yield 4% and 4.3% respectively. And dividends should continue impressing as Tyman’s acquisition-led growth strategy clicks through the gears.

Rubber bubba

Another share I feel should be on the watchlist of all investors seeking generous dividend growth is Avon Rubber (LSE: AVON).

The Wiltshire business, which makes masks for armed forces and security services as well as milking devices for the dairy industry, has trebled shareholder payouts over the course of the past five years.

And thanks to its impressive cash generation and the sunny outlook for its broad portfolio of hi-tech products, City analysts expect this story to keep on rolling. Accordingly, last year’s 12.32p per share dividend is expected to rise to 15.7p in the year to September 2018 and again to 19.8p next year.

Subsequent yields of 1.3% and 1.6% respectively may be handy rather than spectacular. However, when you add in Avon Rubber’s bright long-term earnings outlook (it is expected to get start recovering from a 13% earnings fall this year with a 1% rise in fiscal 2019), and undemanding earnings multiple of 17.2 times, I believe the defence share is a pretty compelling pick today.

The post 2 dividend heroes that could make you an ISA millionaire appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

According to the firm’s figures for 2017, pre-tax profit for the year increased by 17% to £35m and underlying profit rose 10% to £68m, thanks to a 14% increase in revenues to £523m, helped by contributions from acquired companies Bilco and Giess. Favourable exchange rates also contributed to rising profitability.

And following 2017’s strong performance, management is not slowing up. Today, Tyman announced one of its most significant acquisitions yet, a $101m deal to buy US window and door hardware firm Ashland Hardware. To help fund the deal, it’s issuing 17.8m shares.

Expanding overseas 

The buyout of Ashland should accelerate Tyman’s growth in the US considerably. Its US-based AmesburyTruth division, which Ashland will join, grew sales at 15% to £332.7m last year, and Ashland will add another $67m to this total. For 2017, the US-based business recorded revenues of $67m and adjusted earnings before interest, tax, depreciation, and amortisation of $11m. This deal should help accelerate growth in 2018, and it shows just how committed management is to growing the business over the long term. 

Tyman has a history of expanding revenues through acquisitions. This approach has helped the company grow earnings per share at a rate of 12% per annum over the past five years. Management is expecting “a further year of profitable growth in 2018,” and City analysts have pencilled in earnings per share growth of 8%, although this doesn’t include gains from the acquisition announced today.

With this being the case, I believe the company’s current valuation of 10.8 times forward earnings is way too cheap. If management can continue to grow earnings at a double-digit rate every year, then its multiple looks to undervalue Tyman’s future growth potential significantly. As well as the bargain basement valuation, the shares also support a dividend yield of 4%.

Too cheap to pass up? 

Tyman isn’t the only cheap growth star I’ve got my eye on today.

Plastic piping systems manufacturer Polypipe (LSE: PLP) has seen its earnings grow at a compound annual rate of 34% per annum over the past five years — a growth rate more suited to a tech company rather than dull pipe producing business. 

City analysts are expecting the firm to report earnings growth of 22% for 2017, followed by an increase of 8% in 2018. However, this doesn’t include the impact of any potential acquisitions that may be inked over the next nine months.

Despite the historical earnings growth Polypipe has been able to achieve, the shares look relatively cheap, trading at a forward earnings multiple of only 13.6 at the time of writing. For most construction businesses, this valuation might be considered appropriate. But considering Polypipe’s record of growing earnings, it seems too cheap to pass up. What’s more, as CEO Martin Payne commented at the end of November, “the group continues to deliver strong organic growth ahead of the overall UK construction market, demonstrating the resilience of its balanced exposure to the different sectors within that market.“

The post Two secret, cheap growth stocks to watch in 2018 and beyond appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

Countryside advised that the number of completions during the 13 weeks to December 31 jumped 47% year-on-year to 852 units. The company also reported a chunky forward order book of £242.9m, although admittedly this was down from a colossal £292.9m a year earlier.

Private average selling prices dropped 11% in the period, to £394,000, although this reflected the FTSE 250 firm’s decision to focus more on affordable housing.

Celebrating the results chief executive Ian Sutcliffe said: “We have had a strong start to the year. We entered [fiscal 2018] with a record forward order book which, combined with our mixed tenure model, has enabled us to deliver sector-leading growth in completions and improved cash conversion.”

Countryside remains on track to meet full-year forecasts, it said, also advising: “Current trading remains robust, with the net reservation rate tracking in line with expectations and an underlying sales price increase of 3%. Our mixed tenure delivery and an increase in the number of active sites, up 22% to 96, continue to underpin our sector-leading growth.”

Countryside noted too that it is witnessing strongest demand in price points below £600,000, a segment which represents more than nine-tenths of its private sales.

Brilliant forecasts

Reflecting the housebuilder’s strong progress in a favourable marketplace, City analysts are expecting earnings to continue swelling at an impressive pace. During the 12 months to September 2018 a 24% bottom-line rise is forecast, a figure that also leaves Countryside dealing on a bargain basement forward P/E ratio of 9.6 times.

What’s more, current forecasts point to an additional 16% profits improvement in fiscal 2019, news that should be music to the ears of growth and dividend chasers.

You see, shareholder payouts are expected to continue their relentless northwards march during this period as well. Last year’s 8.4p per share reward is anticipated to rise to 10.8p in the current period, and again to 13.3p next year. Consequently yields rock in at 3.3% and 4% for this year and next.

Another growth and income star

Those seeking splendid all-rounders should also pay Tyman (LSE: TYMN) close attention, in my opinion.

The door and window component builder is expected to have kept its long-running growth story in business with a 5% earnings advance in 2017. It is forecast to follow this up with rises of 8% in both 2018 and 2019, projections that leave Tyman dealing on a prospective P/E ratio of just 13.1 times.

And these forecasts lead into predictions of more healthy dividend expansion, meaning that a projected 11.5p per share payment for last year moves to 12.4p and 13.3p for 2018 and 2019 respectively. As a result, yields stand at an inflation-beating 3.3% and 3.5% for this year and next.

Tyman spooked investors in November after advising that profit forecasts for the full fiscal year were likely to fall below expectations because of higher input costs and operational troubles at its AmesburyTruth unit.

But investors have piled back in since then, not a surprise to me given the strong outlook for its core North American markets and the brilliant long-term revenues opportunities created by recent acquisitions.

The post 2 growth and dividend stocks that could make you rich appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.

Market leaders

The London-based business, previously known as Lupus Capital, is a leading international supplier of engineered components to the door and window industry, with all three of its main divisions being market leaders in their respective geographies. The group has 23 manufacturing sites in eight countries, along with a further 18 sourcing and distribution sites across the Americas, Europe, Asia and Australasia, with its products being found in homes and other buildings worldwide.

In its half-year update, the company reported a 30% improvement in group revenues to £260m, with underlying pre-tax profits rising 32% to £31.4m, compared to £23.8m for the first six months of 2016. Perhaps not surprisingly, investors responded by bidding up the share price to all-time highs of 367p earlier this year.

Today’s latest update however, wasn’t as impressive. Management conceded that underlying pre-tax profits for the full year were likely to be slightly below market expectations. principally due to increased input costs and temporary operational issues in its North American business. Nevertheless, full-year profits are still expected to be ahead of 2016.

North American market

The group’s North American business, known as Amesbury Truth, is a prominent manufacturer of window and door hardware components, extrusions and sealing systems. The division also includes Bilco, a leading US manufacturer of roof access hatches, smoke vents and sidewalk doors used in residential, commercial and infrastructure applications, which it acquired in 2016.

This is easily the group’s most important market, generating almost two-thirds of total revenues, with the two smaller divisions operating as EMA in the UK and Ireland, and Schlegel International throughout the rest of the world.

The share price is up 22% since my last recommendation, but I believe there’s plenty more upside left in the shares for growth seekers, with the added bonus of a rapidly-rising dividend that offers a prospective yield of 3.3%. For me, Tyman remains a long-term buy for both capital growth and income.

Turnaround programme

While Tyman’s shares have been on the up and up, the same can’t be said for fellow small-cap constituent Mothercare (LSE: MTC). At around 100p, the Watford-based retailer for parents and young children has now sunk to levels not seen since 2003. But with Brexit weighing on retailers, does this former high-street favourite have further to fall?

The share price slump could suggest that Mothercare is on its knees, but far from it, despite retail trade press reporting today that it’s mulling some HQ redundancies as it moves to become “more specialist and robust”. The company’s turnaround programme seems to be progressing well, with the UK business returning to underlying profit earlier this year. As the store restructuring and refurbishment programme continues, online sales have soared and now represent 41% of total UK turnover, with digital sales also rising fast internationally.

The battered shares now trade on a forward earnings multiple of 10 for the current year to March, falling to just eight for FY2019. Contrarians willing to brave the beleaguered retail sector might want to consider Mothercare as a long-term recovery play.

The post Two small-cap growth stocks that could still make you brilliantly rich appeared first on The Twelfth Magpie.

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Bilaal Mohamed 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.

Personal Group Holdings (LSE: PGH) found itself trekking lower in Tuesday business following the release of half-year trading numbers.

The stock was last 2% lower from Monday’s close and trading at its cheapest since mid-July. However, there is little I can see from today’s numbers that would cause me to sell up.

Personal Group advised that revenues ducked slightly between January and June, to £19.6m from £19.8m in the same 2016 period. This caused pre-tax profit from continuing operations to fall to £3m from £3.1m previously.

However, this bottom-line dip did not stop the employee services star from keeping its progressive dividend policy on track. It hiked the interim dividend to 11.35p per share, up 3.2% year-on-year, assisted in large part by its robust balance sheet — cash and cash deposits clocked in at £16.5m at the half year, and there is no debt to speak of.

Past the worst?

Personal Group has been whacked by changes to employee benefit schemes last year, when the government altered the rules affecting workers’ ability to sacrifice part of their wage for perks like company cars, giving certain tax advantages.

However, it appears to now be over the hump, and chief executive Mark Scanlon said: “We have seen a solid start to the year with the company performing in-line with management’s expectations. We now have greater clarity regarding the outlook of the salary sacrifice market, which has enabled us to clarify our customer offering to deliver a better client experience.”

The City expects the Milton Keynes business to endure another weighty earnings dip in 2017 caused by these aforementioned problems, and an 18% fall is currently predicted. But things are expected to start firing again from next year onwards, and a 7% bottom-line rise is currently predicted. These estimates leave the company dealing on an undemanding forward P/E ratio of 15.3 times.

And this positive long-term outlook is expected to keep Personal Group’s generous dividend programme in business. Last year’s 22p per share total dividend is anticipated to steam to 22.7p in the current period, resulting in a 6.1% yield. And the 23.2p reward forecast for 2018 shoves the yield to an electrifying 6.2%.

Glass giant

Tyman (LSE: TYMN) is another London-quoted stock I reckon could make investors hugely rich in the medium term and beyond. And my faith is backed up by bubbly broker projections.

The door and window manufacturer has been able to introduce handsome dividend hikes each and every year thanks to its rich record of earnings growth. And with analysts predicting further growth of 9% and 7% in 2017 and 2018, shareholder rewards are similarly expected to keep stomping skywards. Consequently Tyman changes hands on a scandalously-low prospective earnings multiple of 11.8 times.

Last year’s 10.5p per share payment is expected to rise to 11.8p in 2017, and again to 12.7p in 2018. These figures create not-so-insignificant yields of 3.6% and 3.9% respectively. And these predictions are also pretty well protected, with dividend coverage registering at 2.3 times for this year and next.

Tyman saw revenues shoot 30% higher between January and June, to £260.4m, thanks to the positive impact of recent acquisitions and strong progress in international markets. I reckon there is plenty of reason for share pickers to give the construction star a long look right now.

The post These dirt-cheap dividend stocks could make you a millionaire appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

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.