This company, which is still family operated, has generated a tremendous amount of wealth for shareholders over the past 10 years. According to my research, the stock has produced a total return for investors of 23.9% per annum in the past decade, more than doubling the overall market return over the same time frame.

And I see no reason why S&U cannot continue to beat the market over the next decade. Today, the group unveiled a record set of results and the 10th year of profitable growth. Overall profit before tax increased to 14% to £34.6m.

Advantage Finance, S&U’s Grimsby-based motor finance business was the most significant contributor to the bottom line, reporting a profit before tax for the year of £33.6m — the 19th consecutive year of record profitability for this business division.

Quality business 

Even though past results are never a guide to future performance, S&U’s track record over the past two decades implies that the company is well prepared for whatever the world throws at it. The fact that the business was able to survive the financial crisis (and continue to produce record profits) when so many of its larger, more liquid peers collapsed, stands testament to management’s stewardship.

That’s why I am recommending the company for an ISA today. As well as its impressive track record, the stock also yields 7% (although after jumping 12% following today’s record results the yield has dropped to 6%) and trades at a P/E of just 8. 

According to my calculations, if the company continues to compound investor capital at 23.9% per annum, it will take just 17-and-a-half years to turn a £20,000 ISA investment into £1m.

Bricks and mortar 

Another stock I believe has the potential to make you a million is property developer U and I Group (LSE: UAI).

U and I has an attractive business model. The company develops properties and returns the profits to investors while retaining a portion for further reinvestment. In this financial year, the business is targeting £45m to £50m in development and trading gains, similar to the goal laid out last year.

If the company meets its target, the City believes it could pay out 13.4p per share in dividends for 2019, giving a dividend yield on the current price of 7.2%. At the same time, it looks as if the stock is trading at a significant discount to the gross value of its development assets.

According to the group’s figures, at the end of August 2018, U and I’s net asset value per share was 284p. Even though this number is now a few months out of date, I think it is still relatively reliable and tells us that shares in the company are trading at a discount of nearly 30% to net asset value. 

So, if you’re looking for a cheap property stock yielding more than double the market average, then I strongly recommend taking a closer look at U and I. When combined in a portfolio with S&U, this property income play could also help you reach that £1m ISA target.

The post Planning a £1m ISA? These two 7%+ yielders could help you get there appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended S & U. 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.

Even if you’re still making a profit after all of that, you then have to face the risk of void periods, unexpected repair costs, and problem tenants.

This is what I do

I prefer to invest in listed property companies which operate on a much bigger scale. This normally means that the risks I’ve highlighted above are more manageable and have less impact on annual profits.

One example of this is Grainger (LSE: GRI), a FTSE 250 firm with a portfolio of almost 10,000 rental properties across the UK.

Grainger recently raised £347m from shareholders to help fund the purchase of the GRIP real estate investment trust. This REIT has a £696m PRS portfolio containing 1,700 housing units. The company expects GRIP to deliver an extra £32.5m of gross rents each year. This represents a 55% increase on Grainger’s 2017/18 gross rental income of £59.2m.

Growth focus

Grainger’s chief executive Helen Gordon has a strong focus on growth. Her aim is to build the company into the UK’s largest private rental provider. Such plans always carry a certain amount of risk, but the firm’s progress seems good to me, so far.

Debt levels have remained stable and the group’s focus on mid-market housing means that occupancy levels are high, at 97%. The firm has also recently been short-listed to build 3,000 new homes in London, on sites close to underground stations.

Grainger appears to have strong momentum. Its focus on rental should mean that cash flow stays strong, even if house prices fall. The forecast dividend yield for 2018/19 is modest, at 2.6%, but the payout is expected to grow strongly.

I can see a long-term opportunity here, although personally I prefer businesses with a stronger focus on income.

A 6% yield I’d buy

One example of the kind of property stock that I’d like to own is U and I Group (LSE: UAI). This developer specialises in urban regeneration projects, mainly in London, Manchester and Dublin.

The group’s developments tend to be mixed use, often combining office space, retail and residential property. Some are developed for long-term rental, while some are sold for a short-term profit.

The firm’s management tend to return surplus cash to shareholders each year, providing generous dividends. City analysts expect a payout of 13.4p per share this year, giving a forecast yield of 6.4%. However, my colleague Rupert Hargreaves believes the final payout could be greater.

Insider buying

The downside of this focus on dividends is that U&I’s net asset value has remained fairly flat in recent years, at about 280p per share. This could limit long-term share price gains. However, with the stock currently trading close to 200p, I think the valuation is low enough to leave room for a profit.

The firm’s board seem to share this view — since the end of August, deputy chief executive Richard Upton has bought £265,000 worth of U&I shares, taking his total holding to £6.7m. At current levels, I share Upton’s view that the stock is a buy.

The post Forget buy-to-let! I’d buy these property dividend stocks instead appeared first on The Twelfth Magpie.

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Roland Head 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.

While the growth in the share price has been an impressive 123% over this period, generous dividends have made up the bulk of the return.

And I expect this trend to continue as the asset manager goes from strength to strength.

Building a reputation

Over the past decade, City of London has been making a reputation for itself as an emerging markets (EM) asset manager. The business is relatively small in comparison to some of its larger peers with just £5bn in funds under management (FUM) at the end of September, but the firm’s performance since its IPO shows that size is not holding it back.

Unfortunately, the one downside of specialising in EMs is that capital tends to be flighty. When the going gets tough, EMs are usually the first markets sold by investors and this has been precisely what has happened over the past few months. 

Outflows from EM funds all over the world have jumped, and City of London has not been able to buck the trend. According to figures out from the company today, FUM in the firm’s EM funds declined 5% between June and September. On the other hand, City of London’s developed market equity funds saw an increase in FUM of 20%. Overall, net inflows were positive at £8m although market movements caused the overall balance to decline by 2%.

In my opinion, this small change isn’t enough to upset the group’s potential for the full year. For fiscal 2019, analysts are expecting the company to earn 38.6p, which puts the stock on a forward P/E of 10.3, hardly a demanding valuation. In addition, the stock supports a dividend yield of all of 7.2%. These attractive valuation metrics are why I believe this is one of the best income stocks on the market today.

Development income

Another income play that has recently grabbed my attention is U and I Group (LSE: UAI). This property business is focused on buying and developing undervalued real estate assets, unlocking value from unloved and misused property. It currently has a pipeline of existing projects with a gross development value of more than £7bn.

Management believes that the company can produce development and trading gains of £50m per annum based on the current pipeline of projects, and the majority of this income will be returned to investors if history is anything to go by. U and I usually distributes any excess income to investors, which meant that last year investors received 20.7p per share, giving a dividend yield of 8.9%. 

For 2018, analysts have pencilled in a yield of 5.7%, but I believe this could be a conservative estimate. If the firm can hit its projected development profits target, the return could be closer to 7% according to my calculations. With this being the case, I believe it is indeed worth keeping an eye on what U and I has to offer to investors.

The post Some of the best 7%+ dividend yields the market has to offer 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.

It’s property developer U and I Group (LSE: UAI), and it’s just announced a total dividend of 17.9p per share for the year ended 28 February. That comprises a big special dividend of 12p, on top of ordinary dividends amounting to 5.9p, and it represents a yield of 8.8% on Wednesday’s closing price.

The shares have put on 5% as I write these words, but we’re still looking at a relatively modest forward P/E of under 12 based on the current year’s forecasts, and that would drop as low as 8.2 should 2020 predictions come good.

The property regeneration specialist operates in a business that can provide lumpy returns on a year-by-year basis, but I find it an attractive long-term segment of the industry.

U and I reported a record £68.3m in development and trading gains, which was at the top end of expectations, and that translated to a 12.2% post-tax total return with net asset value per share climbing from 278p to 303p.

It’s all part of the firm’s move to reposition its investment portfolio to target areas with strong growth potential — the company has its sights firmly set on the London City region, Manchester and Dublin — and assets worth £53.2m were sold at or above book value.

Chief executive Matthew Weiner spoke of the company’s “clear focus on regeneration and a commitment to delivering sustainable value for shareholders,”  echoing its aim to achieve consistent post-tax returns of 12% per year. I’m seeing a cash cow here.

FTSE 100 dividend

My FTSE 100 pick is in a similar business, and it’s housebuilder Persimmon (LSE: PSN). I first spotted it back when housebuilders were firmly out of favour, and I saw it was using its spare cash to hoover up plots of land when the good earth was being sold off cheap.

That looked like a canny long-term strategy to me, and Persimmon shares have more than quadrupled over the past decade while the FTSE 100 has gained just 21% — with handsome dividends thrown in as an extra.

The share price has actually gone off the boil a bit of late, and has fallen back a little since last October’s peak. I think that’s for a number of reasons. I reckon there’s probably a Brexit effect, though I really don’t think that momentous event should do any great damage to the property market — our chronic housing shortage will be here for some time yet.

The slowing of earnings growth is surely the bigger driver, as five years of annual double-digit growth is set to come to an end with analysts forecasting only 3%-4% annually for this year and next. On top of that, some are fearing for the FTSE 100’s top dividends as a number of them are seeing thinner cover than is ideal.

Persimmon’s forecast dividend is covered less than 1.2 times, but it’s a well-managed and strongly cash-generative business, and I can see it holding up.

The post An 8% FTSE 100 dividend yield I’d snap up today appeared first on The Twelfth Magpie.

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Alan Oscroft 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.

F&C UK Real Estate Investments (LSE: FCRE) is a great example. This business invests in commercial property around the UK and has generated steady returns for its investors since its IPO in 2004.

Slow and steady growth 

According to F&C’s results for six months to the end of December, which were published this morning, during the period under review net asset value grew by 7.4% and the annualised dividend yield averaged 4.8%. Over the past five years, the trust has generated returns for investors via both net asset value growth and dividend income. 

For the five years to the end of September 2017, F&C’s net asset value per share increased by 90% and the share price added 119% excluding dividends. The trust distributes its income every quarter and currently, the quarterly payout is 1.25p per unit. 

There are some concerns about the impact Brexit will have on the UK property market, but to me it looks as if F&C is, to a certain extent, insulated from this uncertainty. It has a large portfolio of retail distribution assets, such as the Northfields Retail Park, Rotherham which “delivered the highest weighted contribution to portfolio return of any property over the period.” As the demand for retail distribution assets continues to expand, led by the growth of online retailing, F&C and its investors should continue to profit, no matter what the Brexit outcome. 

At the end of December, the trust’s net asset value was 104.9p, so today the shares are trading at a slight (0.9p) discount to the value of F&C’s property. 

Development profits 

Another property business I’m positive on the outlook for is U and I Group (LSE: UAI). Not strictly a real estate investment trust, U and I is a property regeneration business where the returns are lumpier, but also more lucrative. 

For fiscal 2018 management is targeting between £65m and £70m of property trading and development gains, a large percentage of which will be returned to investors. Analysts have pencilled in a dividend yield of 9.3% for the year, falling to 6.2% for fiscal 2019. As well as this market-beating dividend yield, the shares are also trading at a discount to tangible book value. Specifically, based on the most recent set of figures, the shares are trading at only 70% of tangible book value. 

As the company works to realise value by disposing of its development property holdings, this discount should narrow, hinting at the prospect of attractive returns for investors. 

To help the company meet its develop gains goal, today it announced that its contract to purchase the Preston Barracks site from Brighton & Hove City Council is now unconditional, which will allow it to deliver one of Brighton’s biggest ever mixed-use regeneration projects producing 369 new and affordable homes as well as 1,338 purpose-built student bedrooms for the University of Brighton and an innovation hub for start-up and SME businesses. This is yet another development that shows management is working hard to unlock value for investors in the business. 

The post Looking for income? Consider these high-yield real estate dividend investment trusts 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.

Since April the company has sold £315m of investment assets at prices in the aggregate of 2.5% above book value. These disposals have funded reinvestment activities as well as debt reduction. 

Net borrowings have fallen by £236m, substantially reducing the firm’s loan ratio from 55%, at 31 March 2016, to today’s pro-forma ratio of 43%. This debt reduction will be good news to shareholders as Helical’s high level of debt has historically been a major criticism of the group and its investment case. 

Now management is focusing on generating the most income from the firm’s portfolio. Within Helical’s results for the six months to 30 September published today, CEO Gerald Kaye said: “With our portfolio of high-quality London and Manchester offices and higher-yielding logistics properties, we now look forward to increasing our income stream from the current contracted rents of £45m towards the portfolio’s ERV of £65m as completed office space is made available to potential tenants in the next 12 months.”

Set to push higher

This realisation of the company’s full potential could, in my opinion, drive a re-rating of the shares. 

At the end of September, its net asset value per share was 465p, 51% above the current price. Over the past 12 months, the share price has gained 20% as the restructuring has unfolded and investors have bought into the growth story. 

Shares in the real estate business are changing hands for less than £5 at £3.08 today. This low share price is not an indicator of value, but the vast discount to net asset value is. As well as this enormous discount, the shares support a dividend yield of 3%. 

Helical is not the only UK property company trading at a discount to net asset value. U and I Group (LSE: UAI) is another deeply discounted income stock. 

Double-digit returns

U and I is a property regeneration company. Profits are lumpy, and the business is dependent on debt to get projects off the ground. However, these factors should not detract from the investment proposition. 

Management is targeting a 12% post-tax total annual return from property development profits and dividend income. So far this year, the company has generated development and trading gains of £6.7m taking the level of gains delivered since the start of the financial year to £16.1m, against a full-year target of £65m to £70m as legacy projects are divested. 

For the six months ended 31 August, U and I’s net asset value per share was reported at 269p, 42% above the current price of 190p. 

As well as this deep discount, City analysts are expecting the firm to distribute all excess earnings to investors for the fiscal year ending 28 February 2018. A dividend payout of 17.9p per share is projected, giving a potential dividend yield of 9.3%. The payout is expected to fall back slightly next year, but the yield is expected to remain at an attractive 6.2%.

The post 2 great stocks for under £5 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.

In line with guidance

To be clear, there’s was nothing particularly awful in today’s numbers. Having realised gains of £7.2m in the six months since the end of February (and £2.2m post-period-end), the company believes it is now on track to deliver £65m-£70m of development and trading gains over the full year. According to CEO Matthew Weiner, this is in line with expectations and supportive of its three-year target to deliver “a minimum of £155m” of such gains and total annual returns of 12%. He went on to state that demand for accommodation within London, Manchester and Dublin “continues to grow” as the supply of existing housing stock reduces, suggesting a fairly positive outlook for U and I over the medium term.

So why aren’t I more bullish? It’s mostly to do with the growing amount of debt on the company’s books. At the end of August 2016, this stood at £128m. By the end of August this year, this number had climbed to almost £160m. This is despite management attempting to cut costs where it can (a £2m reduction in overheads has been targeted by the end of the financial year) and reporting “good progress” on repositioning its investment portfolio, including the identification of £50m of non-core assets for sale. 

With returns on capital employed pitifully low and levels of free cash flow anything but consistent, the cheap-as-chips valuation attached to the company’s shares — at just eight times predicted earnings — isn’t quite so compelling as it first appears, in my opinion. 

Strong performer

Thanks to last month’s excellent set of final results, I can’t help thinking that £370m cap industry peer and strategic land specialist MJ Gleeson (LSE: GLE) might be a better pick.

In the 12 months to the end of June, the Sheffield-based business grew revenue 13% to just over £160m. Pre-tax profit rose 17% to £33m and cash flow increased 42% to £19.7m. In sharp contrast to the aforementioned small-cap, MJ Gleeson had a net cash position at the end of the reporting period of £34.1m. Building on a trend that’s developed over the last few years, returns on capital invested also continue to increase, standing at just over 25% for the 2016/17 year.   

Over the reporting period, it sold 1,013 units — albeit at a slightly lower average selling price than the previous year — leading management to set a new target of doubling sales within five years. According to the company, demand for its affordable housing in the North of England currently exceeds supply with buyers “queueing on-site during open days“. Elsewhere, its South of England-focused strategic land segment reported “a record year” with the completion of eight sales as a result of strong demand from housebuilders. 

Trading on just under 13 times forecast earnings for the new financial year, shares in MJ Gleeson still look very reasonably priced and are expected to offer a 3.7% dividend yield.

The post One screamingly cheap small-cap stock I’d avoid and one I’d buy 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.

Also, if you’re prepared to be greedy when others are fearful, you can buy REIT units at a significant discount to the value of the underlying property, which is probably one of the greatest advantages of investing in property via a REIT. 

Two of the property companies I’ve selected for my portfolio are U and I Group (LSE: UAI) and Real Estate Investors (LSE: RLE). 

Property development income 

U and I Group is a property regeneration company, which means it’s more speculative than a REIT but the returns on offer are higher. The company is primarily a property developer that buys, develops and sells on buildings generating an impressive return for investors along the way. Management is targeting £50m in property development gains per annum until 2019, with a 12% annual post-tax return for investors targeted through a combination of net asset value growth and dividends. 

In addition to the firm’s property development arm, management has acquired a number of properties to lease providing a steady rental income for the group. 

At the end of August U and I’s net asset value per share was calculated at 272p meaning that at today’s price of 160p, the shares are trading at a 42% discount to NAV. City analysts are forecasting a dividend yield of 4.8% this year and 7.7% for 2017 as the company pays out development profits. In the past 30 days, management has acquired around 40,000 shares in the company to take advantage of the depressed share price. 

Commercial REIT

Real Estate Investors is a commercial property REIT focused on the North of England. The company’s CEO owns a significant chunk of the group’s outstanding shares, and so you can be sure he’s looking to achieve the best returns for investors. 

Over the past few years, Real Estate has been expanding its property portfolio, buying assets with high-quality existing tenants in place that offer a double-digit yield. For the first half, the company reported a 58% increase in gross property rental income, 24% increase in gross property assets and management hiked the first quarter dividend distribution by 25%. 

At the end of June, the group’s NAV was 63p. Once again, just like U and I, shares in Real Estate are trading at a double-digit discount to net asset value after recent declines. Also, Real Estate’s management has been increasing their shareholdings in the company recently. A dividend of 2.5p per share is predicted for 2016, a yield of 4.4% at current prices. 

Foolish summary 

All in all then, I believe that Real Estate and U and I are some of the best stocks to play the UK property market. Both companies are trading at a deep discount to net asset values, support an above average dividend yield and management owns a large chunk of the shares. 

The post Why I own these two under the radar property stocks appeared first on The Twelfth Magpie.

More reading

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• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Rupert Hargreaves owns shares in U and I Group and Real Estate Investors. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

But are these fears overblown, and is it a good time to be greedy when others are fearful? After all, bookmakers still believe the odds of Britain remaining in the EU is well over 70%. What’s more, underlying long term fundamentals are supportive too. There remains a chronic shortage of high quality space available for businesses, while the “lower for longer” outlook on interest rates should keep rental yields low and property prices buoyant.

Growing dividends

Shares in Land Securities (LSE: LAND) currently trade at an 18% discount to net asset value (NAV), despite the REIT having one of the most attractive development pipelines. With additional rental income coming in from the completion of new office and retail developments, earnings are forecast to grow 6% this year, with a further 8% pencilled in for 2017.

Since 2012, Land Securities has increased its dividend more than 20%, and I think there is more growth to come. The REIT currently yields 2.8% today, and is projected to grow its dividend by 5% in 2016. A similar amount of dividend growth should follow in the following year, giving investors a prospective dividend yield of 3.4% by the end of 2017.

Retail exposure

intu Properties (LSE: INTU), a shopping centre REIT, trades at an even steeper discount to its NAV, of 24%. But being more heavily exposed to the retail sector, intu is arguably at a lower risk from a potential Brexit. That’s because most economists don’t expect an immediate shock to consumer spending in the event of Brexit, meaning retail rents and vacancy rates should remain stable in the immediate aftermath of the EU referendum.

Shares in intu currently yield 4.7%, and city analysts are forecasting a 1% increase in its dividend this year.

Non-cyclical

Target Healthcare REIT (LSE: THRL) should keep profiting from steady growth in healthcare needs. Healthcare demand is non-cyclical, and the need for purpose-built care homes is ever-increasing, given the rapidly ageing population.

As is typical of the sector, Target Healthcare benefits from long-term full repairing and insuring leases, which include upwards-only annual rental increases. This allows the REIT to generate very predictable cash flows year after year, which enables it to pay shareholders almost all of its earnings through dividends.

Since its IPO in 2013, Target Healthcare has delivered a total return of 17%, with its shares currently yielding 5.8%.

Better yield, but higher fees

Like Target Healthcare, MedicX Fund (LSE: MXF) invests in the healthcare sector. The fund currently pays a quarterly dividend of 1.475p per share, with underlying dividend cover of 63.0%. At today’s share price of 84p, the fund currently yields 7.0%.

Although MedicX has a more attractive yield than Target Healthcare, there is a downside. MedicX charges higher management fees — its 2015 ongoing charge, which includes a 15% performance fee on total shareholder returns above 8%, was 2.83%, compared to 2.01% for Target Healthcare, according to data from the Association of Investment Companies (AIC).

Massive 7.7% yield

Finally, U and I Group (LSE: UAI) seeks to make property investments that have the potential to gemerate strong financial returns as well as long-lasting social and economic change for local communities. The REIT focuses on regenerating city centre properties and investing in higher yielding warehouse development opportunities in the British regions.

Including the 8p per share yearly special dividend, U and I Group currently yields a massive 7.7%. Its dividend is comfortably supported by an 81% payout ratio, well below the 90% level which is usually considered to be an acceptable maximum for REITs.

Trading at a 38% discount to NAV, value investors should keep an eye on this REIT.

The post 5 REITs with yields up to 7.5%: Land Securities Group plc, Intu Properties plc, Target Healthcare REIT Ltd, Medicx Fund Ltd. & U and I Group plc appeared first on The Twelfth Magpie.

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• Could I REALLY retire on a Stocks and Shares ISA with passive income shares?

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

Standard Chartered (LSE: STAN) is perhaps the cheapest bank stock on the market. Shares in the emerging market focussed bank currently trade at a price to book (P/B) ratio of 0.5. A bank with a P/B ratio of less than one indicates its market value is less than its actual worth, as stated on its balance sheet. UK banks have often traded at a discount to book value since the financial crisis of 2007/8, but rarely at such a steep discount.

Unfortunately, Standard Chartered is trading at such a discount for some very good reasons. Loan impairments almost doubled in 2015 to $4bn and the bank reported a pre-tax loss of $1.5bn for the year. As the economic slowdown in emerging markets takes hold, investors expect the bank to make more loan losses, with profitability destined to remain subdued in the near future.

The bank’s near-term performance could be cause for optimism though. Analysts had been expecting another a steep rise in loan losses in the first quarter of 2016, but to their surprise, loan losses instead fell by 1%. Standard Chartered also made strong progress in improving its balance sheet; its common equity Tier 1 capital ratio, a measure of financial strength, rose 0.5 percentage points to 13.1% in the first three months of this year.

Earnings will take some time to recover, and City analysts only expect the bank to report adjusted EPS of 19.3p this year. This means its shares are currently trading at a pricey forward P/E of 27.2.

Tempting dividend

Having slumped 16% since the start of the year, shares in Aviva (LSE: AV) currently trade at 0.9 times its book value. Aviva’s track record on growth may have been unimpressive, but the insurer has shown significant improvement in profitability. The insurer’s operating profits in 2015 increased 20% to £2.7bn, with dividend up 15% to 20.8p per share for the year.

Looking forward, City analysts expect adjusted earnings to grow 108% and 10% in 2016 and 2017, respectively. This would give its shares a forward P/E of 8.3 on its expected 2016 earnings, which would fall to just 7.6 by 2017. Its dividend yield, which currently stands at 4.9%, is forecast to rise to 5.6% and 6.3% by 2016 and 2017, respectively.

City brokers are positive on the stock too. Out of 22 recommendations, 13 are strong buys, one is a buy, four are holds, and four are strong sells.

Massively undervalued

Property regeneration company U and I Group (LSE: UAI) also trades near its 52 week lows. With shares trading at a 36% discount to its net asset value (NAV) of 291p per share, the real estate investment trust (REIT) is also massively undervalued.

Despite this, the specialist property company is forecast to see some robust growth with the completion of major regeneration projects timetabled for the next two years. Development and trading gains over the next two years is expected to total £114m.

This is in line with the company’s medium-term target of delivering annual total returns in excess of £50m, which roughly equates to a 12% post-tax return. That’s a much greater return than most other real estate investments.

Shares in the REIT carry a temping 7.4% dividend yield, with earnings cover at 1.23 times.

The post 3 value stocks near 52-week lows: Standard Chartered plc, Aviva plc & U and I Group plc appeared first on The Twelfth Magpie.

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