The broader market has sought to disagree, however, and the FTSE 250 firm’s share price has plummeted in the wake of the third-quarter update. It’s now trading at its cheapest for four months.

Much of this summer’s gains may have been wiped out, but I’m not worried. Indeed, I believe Aggreko’s subsequent forward P/E ratio of 15.1 times, in line with the widely-accepted value benchmark of 15 times (or below), makes it a hot buy right now.

Sales surging

In that aforementioned market update, the business — which rents out power generation equipment for a broad range of sectors, from agriculture and energy to shipping and telecoms — declared that underlying revenues galloped 11% higher in the nine months to September.

Growth may have slowed in recent months (comparable sales were up 14% in the first half of 2018), but this result is still not to be sniffed at. That broad operational base protects it from weakness in one or two areas, as does its broad geographic footprint.

Indeed, at its Rental Solutions arm, a division worth more than half of group revenues, underlying turnover soared 26% year-on-year from January to September thanks to soaring sales in North America (up 32%), as well as solid growth in Europe.

Those hoping that Aggreko can break out of its long-running cycle of earnings dips in 2018 are set to be disappointed, or so say City analysts who are forecasting an 8% drop. They are, though, predicting that it will bounce in 2019 with a 6% profits improvement.

And with the profits picture brightening, the number crunchers feel that Aggreko will have the confidence to start lifting dividends again. Last year’s 27.12p per share dividend is expected to rise to 27.5p in 2018 and again to 28p in 2019, figures that yield a chubby 3.7% and 3.8% respectively.

Even bigger yields!

Vesuvius (LSE: VSVS) is another FTSE 250 share offering inflation-busting dividend yields that I’d be happy to buy for 2019 and beyond.

Unlike Aggreko, though, Vesuvius, which manufactures equipment used in the steel and foundry industries, has had no problems lifting dividends in recent times. And thanks to City predictions of further bottom-line growth — earnings rises of 18% for 2018 and 8% for 2019 are currently predicted — shareholder payouts are tipped to keep swelling too.

A 19.5p per share reward is predicted for this year, up from 18p in 2017 and yielding 3.8%. Next year a 20.5p dividend is anticipated, nudging the yield to a tremendous 4%. And I’m tipping payouts to keep striding on along with profits as global steel demand goes from strength to strength.

Right now, Vesuvius trades on a prospective P/E ratio of 10.8 times. This provides a brilliant base for its share price to spring higher in the near-term and beyond, whilst those bulky dividend yields provide a great little bonus. I reckon the engineer is a hot buy today.

The post 2 FTSE 250 dividend stocks I’d buy for 2019 and beyond 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.

Today I’m looking at two FTSE 250 stocks that I believe could power ahead of the FTSE 100 over the coming years.

A turnaround in progress

Back in January, I tipped defence firm Chemring Group (LSE: CHG) as a potential buy. The shares rose by about 30% after that, until a serious fire at its Countermeasures factory in Salisbury caused the shares to crash in mid-August.

The group’s shares fell from 236p to under 195p following this incident, in which one person was killed and one seriously injured. However, Chemring shares have risen by more than 10% already this week, after the firm announced a major new contract win and issued an update on trading.

Work is going to gradually restart at the Salisbury factory, starting with shipments of finished orders. As the factory is rebuilt, it’s likely to be more heavily automated than it was previously. I’d expect this to result in higher profit margins over the long term.

In the meantime, Chemring has won a long-term contract to supply chemical agent detectors to the US Department of Defense. The company says this is the result of several years’ research and development. No information was provided about the value of the deal, but it was enough to send the shares up by 5%. This suggests to me that it’s expected to make a meaningful contribution to future profits.

A buying opportunity?

The fire is expected to cut Chemring’s underlying operating profit by about £15m this year. Aside from this, management says that trading is in line with expectations.

Analysts’ forecasts are for earnings per share to drop by around 18% in 2018, before bouncing back next year. This puts the stock on a 2018 forecast P/E of 20, falling to a P/E of 16 in 2019.  The group’s dividend yield is expected to rise from 1.6% in 2018 to 2% in 2019, as profits and cash flow improve.

I believe Chemring could be a good buy at this level, for long-term investors.

A safer option?

If you’re concerned about investing in a firm that’s facing significant operational disruption, you might want to consider my second choice. FTSE 250 engineer Vesuvius (LSE: VSVS) specialises in “molten metal flow engineering”.

This company makes equipment used in foundries and in the steel industry. The group’s shares have risen by 11% over the last year, compared to a gain of just 2% for the FTSE 100. Although profits dipped in 2015 and 2016, last year saw Vesuvius return to profit growth.

Further progress is expected this year. Analysts expect adjusted earnings to rise by about 15% to 47p per share in 2018. A dividend of 19.3p per share is expected, an increase of 7.2% versus last year’s distribution.

These forecasts put Vesuvius on an undemanding forecast P/E of 13.4, with a prospective dividend yield of 3.1%. In my view this could be a good example of a boring business that makes a good long-term investment. I’d consider buying this stock at current levels.

The post Forget the FTSE 100! These FTSE 250 dividend growth stocks could help you retire rich appeared first on The Twelfth Magpie.

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• 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?

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.

Under the radar

£3.3bn cap RPC Group (LSE: RPC) specialises in plastic product design and engineering. It’s unlikely to get your pulse racing but that can be a good thing when it comes to investing.

Since breaching £10 back in October, shares in the Rushden-based business had lost roughly 20% in value before today. While nothing can be guaranteed when it comes to the markets, I suspect this morning’s pre-close trading statement for the 2017/18 financial year could help to arrest this fall.

According to the company, trading has continued to be positive since it last updated investors. Full-year revenue is now predicted to have grown “significantly” from that achieved in the previous financial year through a combination of organic growth, the price of polymer, favourable exchange rates and contributions from acquisitions. Profits are likely to be “in line with management expectations“. 

With the impact of plastics very much in focus in recent weeks, RPC commented that it continues to work with its supply chain to “ensure positive outcomes for the environment” and develop products that “can be easily recycled at the end of their life“. The company also said that it looks forward to engaging with the UK Government in light of the latter’s recently-announced Deposit Return Scheme on single-use glass and plastic bottles. 

In other news, RPC confirmed that — through the closure of 22 locations and relocation of 300-odd production lines over three years — the integration of acquisitions Promens, GCS and BPI was now “substantially complete“. It is hoped that the recent purchase of packaging specialist Nordfolien will also support future growth. Acquisitions are “an important part” of RPC’s strategy, according to CEO Pim Vervaat and the company “remains excited by opportunities in the ongoing industry consolidation”.  

With analysts estimating earnings per share growth of 35% before today, RPC’s stock trades on 11 times earnings. Taking into account today’s update, the decent (and likely well-covered) 3.8% dividend yield forecast for 2018/19 and improving free cash flow, that looks pretty good value to me.

Going cheap

Another FTSE 250 constituent that appears to offer good value at the moment is Vesuvius (LSE: VSVS). 

A “global leader in molten metal flow engineering“, the £1.6bn cap released a bullish set of full-year numbers at the start of March, highlighting strong performance “across all regions and business units“.

Thanks to growth in its steel and foundry end markets, underlying revenue rose 12.5% to £1.68bn in 2017 with trading profit climbing 16.1% to just over £165.5m. The latter is the highest achieved since Vesuvius listed on the market.

Having saved £16.2m through restructuring over 2017 — mostly in its Flow Control division — Vesuvius chose to announce another cost-cutting programme on results day, one that would target £15m of annual savings by 2020 in its other businesses.

Right now, you can pick up stock in Vesuvius for 13 times earnings based on analysts forecasts for the full year. Dividends have wobbled in recent years but there’s a 3.2% yield pencilled in for 2018. With free cash flow looking healthy and net debt falling by 14% to £274.3m over the reporting period, I think the stock is worth a closer look.

The post 2 FTSE 250 value stocks I’d consider buying for my ISA appeared first on The Twelfth Magpie.

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• 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?

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

Unite Students

The Bristol-based group, better known as Unite Students, is the UK’s largest and most established manager and developer of purpose-built student accommodation. It provides a home for around 50,000 of them in more than 140 properties, across 28 leading university cities in England and Scotland. The group works in partnership with more than 60 Higher Education institutions and also lets rooms directly to students.

Manchester has the largest student population in the UK after London with two high quality universities, making it a strong market for Unite Students. The latest announcement builds on the group’s strategy to work in partnership with mid to high-ranking universities, and should be good news for investors, providing further visibility for future earnings growth.

No student discount

Demand for student accommodation has exceeded availability for quite some time, and this shortage isn’t going to evaporate any time soon. It’s no surprise then that Unite’s shares have been in high demand, soaring by almost 30% over the past 12 months.

So no student discount here I’m afraid, as the shares now look fully valued at 24 times 2017 earnings. However, I continue to view the FTSE 250 group as an exciting long-term growth play, and would wait patiently for any share price correction or pull-back, and be ready to buy on weakness.

Molton flow engineering

For those who can’t wait to spend that hard-earned cash, then perhaps a more timely growth opportunity comes in the form of Vesuvius (LSE: VSVS). Not only does the business have an awe-inspiring name, but over the last couple of years it has also delivered for its shareholders, with its share price soaring from lows of 271p in early 2016, to recent highs of 606p. But I think the shares are worth more.

The FTSE 250-listed business is a global leader in molten metal flow engineering, principally serving the steel and foundry industries, developing innovative and customised solutions, often used in extremely demanding industrial environments.

Shares explode

During the first half of 2017, Vesuvius benefitted from the 4.5% year-on-year growth in global steel production, as reported by the World Steel Association. At the same time, the group continued to make further progress with its restructuring programme, where annual savings targets have now increased by £15m to a total of £55m.

Vesuvius’s share price has exploded over the past couple of years, with its shares doubling in value since the start of last year, and yet strong forecasts for growth mean that it trades on an undemanding forward price-to-earnings ratio of 16.

The post 2 great stocks for under £10 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.

Red hot

It has been a good day for Vesuvius (LSE: VSVS), a global leader in molten metal flow engineering, whose share price is up almost 9% after this morning’s trading update. This caps a good year for the group, whose share price has nearly doubled from 331p to 590p over the last 12 months.

Vesuvius has benefitted from encouraging signs of improvement in the global steel market, a trend that has driven a strong first quarter in 2017, making up for a relatively weak final quarter last year. Management recognises that these are early days and warns that predicting market resilience is never easy, but assured markets that it was “cautiously optimistic” about its 2017 trading performance.

Ready to blow

Vesuvius has been helped by 5.7% year-on-year growth in global steel production, as reported by the World Steel Association. However, this starts from the relatively low baseline of Q1 2016, and full-year 2017 growth expectations will be materially lower than this figure. Management is also concerned about specific markets, with demand for light vehicles slowing in the US, and heavy truck and mining sales showing only slight signs of recovery.

The firm continues to seek out restructuring opportunities, with total targeted savings of £45m a year. It has also benefitted from sterling weakness, although that may now reverse. The outlook is bright, with forecast earnings per share (EPS) growth of 12% this year and 10% in 2018. This is available at an undemanding forecast valuation of 15.4 times earnings. However, revenues look set to rise only slowly, so much of this is down to cost-cutting. A 3% yield covered 1.8 times is solid but not spectacular. Markets evidently like what they heard today and Vesuvius looks set to keep bubbling along nicely, providing the global economy does.

Defensive play

Meggitt (LSE: MGGT) has been hitting the highs lately, its share price rising 20% in the past year alone, of which 12% came in the last three months. However it still looks affordable, trading at just 13.81 times earnings.

The group, which specialises in high performance components and sub-systems for the aerospace, defence and energy markets, was given extra lift-off after reporting revenue growth of 9% last month. It was boosted by weaker sterling, which beefed up the value of its overseas earnings. Civil aerospace, organic aftermarket revenues and original equipment revenues all grew 3% organically, although military revenues declined 5%, and energy revenues also declined.

Trump play

The future looks steady, with anticipated 2%-4% organic revenue growth for the year, in line with guidance issued in February. The outlook for its military division should also be brighter, assuming that President Trump gets at least some of his spending package through Congress.

EPS are forecast to rise a steady 7% this calendar year and 5% in 2018. These steady growth prospects are yours for an attractive forward valuation of just 12.4 times earnings, while the forecast yield of 3.3% is handily covered 2.3 times, suggesting room for progression. I’m hoping that Meggit will fly to new heights.

The post 2 FTSE 250 flyers I’d buy before it’s too late appeared first on The Twelfth Magpie.

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• 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?

Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended Meggitt. 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.

Something is going right

If the firm’s customers are easily won over by cheaper competing products, as frequent references to ‘competition’ in the recent full-year results suggest, how likely is it that any of Stock’s brands will emerge as premier market-beating sellers across the world? Unlikely, I would suggest, but we should nonetheless keep alert to gathering strength in the company’s brands such as Stock, 1906, Amundsen, Keglevich, Saska, Silver and Boskov.

Stock Spirit’s stated goal is to become Central and Eastern Europe’s leading spirits business, and something is going right because the shares are up around 68% since December 2015. At today’s 175p share price, the forward dividend yield for 2018 runs at 3.5% or so. City analysts following the firm expect earnings to lift 9% during 2017 and 5% in 2018 and to cover the dividend payout around twice.

So, Stock has share-price momentum, growth and a reasonable dividend yield. On top of that, there is always the possibility that one or several of the firm’s brands could gain strength and popularity — perhaps enough to support higher profit margins and a campaign of international expansion.

I think Stock Spirits is an interesting investment proposition and you can pick the shares up on a reasonable-looking forward price-to-earnings (P/E) ratio of just over 14 for 2018.

Restructuring driving growth

I reckon operations must be cyclical at Vesuvius (LSE: VSVS), which serves the steel and foundry industries dealing in molten metal flow engineering solutions for demanding industrial environments. The firm aims to help its customers improve their manufacturing processes, enhance product quality and reduce energy consumption by supplying flow control solutions, advanced refractories and other consumable products, as well as related technical services and data capture.

The company’s offering is embedded in the industrial environment and I don’t think the firm’s customers will invest as much into Vesuvius’s products and services when economic times are tough. In the full-year results statement delivered in March, chief executive Francois Wanecq described market conditions as “challenging” during 2016. However, a restructuring programme drove a return to growth in sales, and City analysts following the firm expect earnings to lift 12% during 2017 and 10% in 2018.

Good momentum

The share price is responding well — up almost 90% since the beginning of 2016 — and it’s hard to ignore the firm’s operational and share-price momentum, which looks set to continue, at least in the short-to-medium term.

If you hop aboard the story today you’ll receive a forward dividend yield running around 3.4% for 2018 with the payout covered just over twice by those forward earnings. At today’s 525p share price, the forward P/E ratio runs at a little over 14 – almost identical to Stock’s — so these two interesting firms make a good comparison. Which do you prefer?

The post Growth, yield and momentum: you can’t ignore these 2 shares 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?

Kevin Godbold 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.

Encouraging results

The company in question is molten metal flow engineering specialist Vesuvius (LSE: VSVS). Its shares moved as much as 18% higher on Thursday following its results. They showed that the company is making encouraging progress with its restructuring. It recorded benefits from those changes of £16.6m in 2016 and is targeting savings of a further £35m by the end of 2017. Its performance during the year was resilient and saw the company make progress in its long-term, structural growth markets of China, India and Brazil.

Vesuvius recorded a fall in revenue of 4% and a decline in trading profit of 1.5%. However, investors were more interested in its strategy update, with its improving cash flow and growth in return on sales improving sentiment in the short run. And since the company is confident in its near-term outlook, further share price gains cannot be ruled out over the coming weeks.

Valuation

However in the medium term, the company’s share price could fall significantly. It trades on a growth stock valuation, but appears to be anything but. For example, Vesuvius has a price-to-earnings (P/E) ratio of 21, which indicates that its shares are overvalued. Certainly, it is forecast to record a rise in its bottom line of 13% in 2017 and 7% in 2015, however this equates to a price-to-earnings growth (PEG) ratio of over two. This suggests a share price fall could be ahead, rather than further capital gains.

Sector value

Of course, the general industrials sector to which Vesuvius belongs can command high valuations. The companies within the sector often offer global exposure and their long-term growth rates can be significantly above average. At the present time, they are also set to benefit from weaker sterling, which could add several percentage points to their growth rates.

However operating within the same industrial sector as Vesuvius is DS Smith (LSE: SMDS). It trades on a relatively low P/E ratio of just 14.3 and is forecast to record a rise in its bottom line of 7% next year and 6% the year after. This indicates that there is upward re-rating potential on offer, since the company appears to have a sound growth strategy.

Its focus on packaging also means it has a relatively stable earnings outlook, as evidenced by its double-digit earnings growth in each of the last four years. Therefore, while sector peer Vesuvius may be a stock to avoid, DS Smith could be a stunning growth opportunity for the long run.

The post Why I’d sell this growth stock despite shares jumping 15% on FY results 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?

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has recommended DS Smith. 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, of course, looks can be deceiving.

Profit warning

Last month, the Dorset-based firm issued a profit warning, saying that it now anticipates that group trading profit for 2016 will be in the range £255m to £275m, well below the previous consensus forecast of £291m, and potentially 23% lower than the £332m it made in 2015. The company has attributed the lowered profits guidance to softer trading conditions in its wireless and satellite communications markets.

But this isn’t the first time Cobham has cut its profits estimates this year. Back in April, shares in the aerospace and defence technology group fell sharply after it proposed a £500m rights issue following a big fall in trading profit for the first quarter of the year. The company revealed that trading profit had sunk to just £15m from the £50m reported for the same period in 2015, as a result of operational issues in the Wireless business leading to delayed shipments and a one-off charge of £9m.

Dividend cut

So should investors take advantage of the battered share price and grab those healthy-looking dividends? Well, not from where I’m sitting.

When it comes to dividends Cobham actually has a pretty decent record. Since 2005 the company has increased its payouts each year, with very healthy dividend coverage. But 2016 will be very different. After announcing very disappointing half-year results in August, management took the brave decision to cut the interim dividend for the first time in ten years from 2.585p to 2.03p per share.

I would certainly want to wait until there are signs of a turnaround before building a stake in Cobham, as I fear further dividend cuts may be necessary as the company treads the difficult road to recovery. I feel there are plenty more income stocks out there which carry much less risk.

Erratic behaviour

Another mid-cap company that currently supports a healthy-looking dividend yield is engineering firm Vesuvius (LSE: VSVS). Is it just me, or does that sound like a brand of mineral water, or maybe a volcano in Italy? Either way it’s a fantastic name for a company that specialises in molten metal flow engineering. In its most recent trading update the company said trading so far this year had remained in line with expectations as cost saving measures and foreign exchange benefits had offset a weak steel market.

The London-based engineer said that end markets had remained subdued and the company expects this to continue for the rest of the year. Despite the weak steel market, Vesuvius’ shares have performed well in recent months, gaining 15% since May, and still support a prospective dividend yield of 4.1%.

So why am I hesitant about its income potential? Frankly I don’t like the dividend history, with payouts increasing and decreasing erratically over the last 10 years, reflecting the volatile nature of the company’s earnings. Call me boring, but I like to see consistent earnings growth with steady rising dividend payouts.

The post Here’s why smart investors are ignoring these big dividends 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?

Bilaal Mohamed 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.

On this front, Premier Oil has real appeal. That’s because it trades on a price-to-book (P/B) ratio of just 0.7 and this indicates that it offers excellent value for money. Furthermore, Premier Oil looks set to emerge from the current oil crisis in a stronger position relative to its peers than it was previously, since it’s in the midst of a strategy to cut costs and become increasingly efficient. And with Premier Oil having purchased assets for what could prove to be a bargain price, it seems to be a bargain buy for less risk-averse, long-term investors.

Upbeat prospects

Similarly, Polypipe (LSE: PLP) also appears to offer excellent value for money. The manufacturer of plastic piping systems has recorded a share price fall of 16% since the turn of the year even though its last two financial years have seen profit rise by a total of 96%.

Looking ahead, Polypipe is forecast to record a rise in its bottom line of 22% in the current year and a further 12% next year. When combined with a price-to-earnings (P/E) ratio of just 12.2, this rate of growth equates to a price-to-earnings-growth (PEG) ratio of only 0.7. This indicates that Polypipe offers excellent value for money and could be on the cusp of experiencing much improved share price performance. Furthermore, with Polypipe yielding 3.3% from a dividend covered 2.5 times, it also offers an excellent income outlook, too.

Improvement ahead

Meanwhile, metal flow engineering specialist Vesuvius (LSE: VSVS) has endured a disappointing year, with its share price declining by 28% in the last 12 months. Clearly, its net profit fall of 15% last year has caused investor sentiment to deteriorate and with Vesuvius’ earnings due to fall by a further 12% this year it would be of little surprise for its shares to come under pressure in the short run.

Of course, with Vesuvius trading on a P/E ratio of 13.6, the market seems to have begun to price-in its disappointing financial performance. And with its profitability forecast to improve by 8% next year, Vesuvius could become a more popular stock among investors – especially since it trades on a relatively appealing PEG ratio of 1.5.

Certainly, there could be some disappointment in the short term and Vesuvius isn’t a bargain buy at the moment. But for long-term investors it could still offer capital gains as well as a tempting yield of 4.9%, which is covered a healthy 1.5 times by profit.

The post Are Premier Oil plc, Polypipe Group plc and Vesuvius plc Ord 10p the biggest bargains of all time? 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?

Peter Stephens 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.

Of course, the major news which has positively catalysed BT’s share price this year is its move into the quad play market, with it now offering landline, broadband, pay-tv and mobile services. This should enable the company to successfully cross-sell its products to existing consumers and, with the company on-track to take over the UK’s largest mobile network EE, its customer base is due to increase and provide even greater opportunity to sell new products to existing customers.

However, BT’s shares have also reacted positively to news that the company is increasing its customer base at a rapid rate via organic channels. For example, its superfast broadband is now widely available after a major investment programme and its policy of offering considerable discounts to new customers has also proved popular.

The problem, though, is that BT is making major changes at a rapid rate, which is leading to significant costs in the short run. This is a contributing factor in BT being forecast to post a fall in its earnings of 3% in the current year. And, with the company’s balance sheet still being highly indebted and having a major pension liability, the price to earnings (P/E) ratio of 15.9 does not indicate that BT offers good value for money at the present time.

Meanwhile, fashion designer Ted Baker (LSE: TED) has released a positive trading update today, with the company reporting a rise in sales of 21% in its most recent quarter despite experiencing challenging trading conditions. And, with new stores opening in key markets such as the US and online sales increasing by 74% versus the same quarter last year, the company appears to be well-positioned to deliver improved performance over the medium to long term.

With Ted Baker being forecast to grow its bottom line by 19% in the current year and by a further 15% next year, its current price to earnings growth (PEG) ratio of 1.9 indicates good value for money is on offer. Furthermore, with the company having posted double-digit earnings growth in each of the last five years, it appears to be a resilient growth play, too.

Also reporting today was molten flow engineering company Vesuvius (LSE VSVS), with it stating that full-year performance will now be at the lower end of market expectations. That’s at least partly as a result of a declining industry outlook, with the global steel and foundry markets undergoing a highly challenging period. For example, global steel production declined by 2.4% in the twelve months to September and, looking ahead, further difficulties appear likely in the short run.

Still, Vesuvius is a relatively resilient company and is being aided by its restructuring programme. And, with the company’s shares trading on a P/E ratio of 11.2 and yielding 4.8% from a dividend which is covered 1.9 times by profit, it appears to offer good value for money at the present time for long term investors who can cope with a relatively downbeat short to medium term outlook.

The post Should You Buy BT Group plc, Ted Baker plc & Vesuvius PLC ORD 10P? appeared first on The Twelfth Magpie.

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Peter Stephens 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.