Today I am looking at five FTSE 250 giants offering splendid bang for one’s buck.
Cycle star
Car and bike emporium Halfords (LSE: HFD) has been rocked in recent times by pressure on its Cycling division, and the problems are expected to last for a little longer.
Still, galloping demand for its auto parts and services– helped by huge investment in its online and in-store propositions — are helping to offset current bumpiness. Indeed, Halfords saw total like-for-like sales rise 0.3% during the third quarter..
The City expects Halfords to bounce from a rare 5% earnings dip in the year to March 2016 with a 1% rise in 2017, resulting in a very-decent P/E multiple of 12.3 times for the upcoming year.
And Halfords carries a market-busting dividend yield of 4.3% for 2017. I believe the firm is a terrific selection for those seeking chunky earnings and payout growth in the years ahead.
Clothing colossus
Fashion giant Supergroup’s (LSE: SGP) decision to expand aggressively in foreign climes is clearly producing huge rewards.
The Superdry manufacturer saw revenues charge 14.6% higher in the last quarter, thanks to new store openings in Europe. And Supergroup’s rising footprint in the US and China promises to deliver further chunky sales expansion.
The number crunchers expect Supergroup to punch stunning earnings growth of 17% and 12% in the periods to April 2016 and 2017 respectively, producing P/E multiples of 16.5 times and 14.7 times.
I believe this is great value given Supergroup’s exceptional momentum, while dividend yields of 1.9% and 2.3% provide handy sweeteners.
Ferment a fortune
Brewing giant Marston’s (LSE: MARS) is also benefitting from the decision to ramp up its property base, with a rise in the number of its drinking holes helping the company set a fourth consecutive Christmas sales record last year.
Marston’s plans to open a further 20 new pub-restaurants and five lodges in the current year, a promising sign for further revenues growth. On top of this, surging demand for the firm’s beer brands is also bloating the top-line — sales volumes of Marston’s labels exploded 21% between October and late January.
The City expects Marston’s to follow a 4% earnings bounce in the year to September 2016 with a 9% increase the following year, resulting in ultra-low P/E ratings of 11 times and 10.2 times correspondingly. Meanwhile, dividend yields of 4.9% for this year and 5.1% for 2017 should keep income chasers happy.
Drinks darlings
Unsurprisingly news of a ‘sugar tax’ in this week’s Budget has whacked investor thirst for beverages giants Britvic (LSE: BVIC) and AG Barr (LSE: BAG) .
But it could be argued that the fear of the drinks sector is overplayed. The likes of Britvic and Barr have two years to reformulate their product ranges, a strategy which both firms have long been engaged in anyway.
As Investec points out, some 55% of Britvic’s British carbonates portfolio is already ‘sugar free’, while Barr’s revenues from zero-to-mid-sugar drinks has leapt to 42% from less than a third five years ago.
City brokers expect Barr to punch 6% earnings rises in the years to January 2017 and 2018, resulting in P/E ratings of 18.1 times and 17.1 times respectively. The company also boasts chunky dividend yields of 2.5% and 2.8% for these years.
Meanwhile, Britvic is predicted to see earnings rises of 5% and 7% for the periods to September 2016 and 2017, producing P/E ratings of 14.7 times and 13.9 times. As well, dividend yields for 2016 and 2017 ring in at 3.4% and 3.7% correspondingly.
While Britvic is clearly better value for money than Barr on paper, I believe both companies can be considered attractive investment destinations thanks to the massive brand investments in recent years, not to mention aggressive expansion into foreign territories.
