Today I’m looking at four small-cap stunners offering great value for money.
Build a fortune
I believe recent share price weakness at Costain Group (LSE: COST) provides a fresh buying opportunity for value chasers. The company continues to benefit from rising investment in UK infrastructure, with revenues leaping 17% last year to £1.32bn, and its forward order book rising to £3.9bn as of December from £3.5bn a year earlier.
The City expects earnings at Costain to march 6% higher in 2016, resulting in a cheap P/E rating of 12.4 times. And the multiple moves to just 10.8 times for next year thanks to a predicted 14% bottom-line rise.
Meanwhile, predicted dividends of 12.4p and 14.1p per share for 2016 and 2017, respectively, should keep income investors happy — these figures yield 3.8% and 4.3%.
Electronics excellence
In my opinion Acal’s (LSE: ACL) expanding global presence should underpin rocketing sales growth in the years ahead. The electronics play now sources 17% of total sales from outside Europe, up from 12% a year ago. And demand for Acal’s bespoke products continues to heat up, the company inking “a number of new large customer contracts” in recent months.
The number crunchers expect Acal to record earnings growth of 14% and 12% in the years to March 2017 and 2018, respectively, forecasts that produce very attractive P/E ratings of 13.5 times and 12 times.
And Acal’s bubbly earnings growth is expected to keep sending dividends higher too. A predicted payout of 8.6p per share for the current period yields a handsome 3.3%, and this moves to 3.6% for 2018 thanks to an estimated 9.3p reward.
Motoring higher
News of surging car demand certainly bodes well for vehicle dealership Lookers (LSE: LOOK). Car sales rose 5.3% year-on-year in March, according to latest Society of Motor Manufacturers and Traders data. This marked the biggest jump for two decades, and I expect sales to remain strong as an improving British economy boosts big-ticket spending.
Lookers is expected to keep its strong earnings record rolling with a 7% advance in 2016, resulting in a mega-low P/E ratio of 9.1 times. And the multiple moves to 8.6 times for next year thanks to an expected 6% bottom-line rise.
Projected dividends for the period may not provide much to write home about — forecasts of 3.5p per share for 2016 and 3.8p for 2017 yield 2.3% and 2.6% respectively. But I believe the firm’s staggeringly-low earnings multiples more than make up for this shortfall.
Services star
Spearheaded by the rising popularity of its Fraedom business expenses technology, I reckon corporate services provider Hogg Robinson Group (LSE: HRG) can look forward to stonking sales growth. The company has chucked vast sums at marketing and distributing the software, a strategy that drove sales of the product 10% higher between last April and September alone.
Against this backcloth, the City expects Hogg Robinson to enjoy earnings rises of 7% and 9% in the periods to March 2017 and 2018, resulting in irresistible P/E ratios of 8.4 times and 7.5 times.
Meanwhile, an expected dividend of 2.7p per share for the current period yields a smashing 4.3%. And an anticipated 2.9p reward for 2018 drives the yield to 4.7%.
