4 super growth stocks: Relx plc, InterContinental Hotels Group plc, Hammerson plc and Photo-Me International plc

Relx plc (LON:REL), InterContinental Hotels Group plc (LON:IHG), Hammerson plc (LON:HMSO) and Photo-Me International plc (LON:PHTM), four stocks that could beat the broader market’s returns.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Today, I’m looking at four stocks offering growth at a reasonable price.


With an enviable portfolio of hotel brands, Intercontinental Hotels Group (LSE: IHG) has a lot of potential. Despite fears of a slowdown in the global economy, hotel revenues continue to grow at a robust pace, while vacancy rates carry on declining. Margins have improved too, as revenue per room rose 1.5% in the first quarter of 2016.

With 220,000 new rooms hitting the market over the next few years, IHG has one of the sector’s largest development pipelines and is well positioned for further growth. City analysts expect this will lead adjusted earnings to expand 10% this year, with a further 16% gain forecast for 2017.

This means that although IHG shares currently trade at a pricey 22.3 times earnings, its forward price-to-earnings ratio would fall to a more modest 20.2 multiple on this year’s earnings (before dropping to just 17.4 by 2017).

Track record

Meanwhile, publisher Relx (LSE: REL) is expected to post a 12% rise in adjusted earnings per share this financial year, with a further increase in earnings of 7% in 2017. This puts Relx on a forward P/E of 17.9 and a PEG ratio of just 1.5, which indicate its shares offer growth at a reasonable price.

As well as upbeat growth prospects, Relx has an impressive track record that may not be fully be appreciated by the market. Over the past five years, adjusted EPS and dividends per share have increased by a compound annual growth rate (CAGR) of 6.9% and 7.8%, respectively.


One company that appears to be attractively priced given the value of its underlying assets and dividend potential is real estate investment trust, or REIT, Hammerson (LSE: HMSO). The retail and office-focused property company trades at an 18% discount to its net asset value (NAV) of 710p per share.

Fears over a potential downturn in the UK commercial property sector and uncertainty created by the EU referendum have led to a sector-wide sell off, but Hammerson is particularly attractive because it has one of most generous dividends. The REIT currently yields 3.8%, but with dividends set to soar 7% this year, and a further 6% in 2017, its forward dividend yields rise to 4.1% and 4.4% for 2016 and 2017, respectively.

New product

You’ve probably all seen Photo-Me’s (LSE: PHTM) self-service photo booths everywhere, but you may not know the company has a new product in town: professional self-service washing machines. These industrial-sized automated laundry machines can hold a wash of up to 18kg, and are most frequently located in supermarket car parks.

Doing your laundry in a car park may initially seem to be strange affair, but with over 1,200 units operated by the company and a further 500 units sold to third parties, the product seems to be catching on. By 2020, the company plans to have 6,000 of these units in operation across Europe.

The outlook for its core photography business is enticing too. A new ID card launched in Japan earlier this year and a new format driving license in France should see continued robust growth over the next few years. For Photo-Me as a whole, revenue for the quarter ended 31 January was 11% higher, with profits increasing by almost 90% compared to the same period last year.

Looking forward, analysts expect full year adjusted EPS to grow 14% this year, with 10% and 8% growth pencilled-in for the following two years.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

More on Investing Articles

Investing Articles

How many National Grid shares must I buy for a £100 monthly second income?

I think National Grid could be one of the safest options for investors seeking a dividend income. And today its…

Read more »

Blue NIO sports car in Oslo showroom
Investing Articles

NIO stock is down 90%. Will it recover?

NIO stock has fallen significantly from its 2021 all-time high. But could now be a chance for this Fool to…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

These 2 UK shares could help me reach £1,000,000 in my Stocks and Shares ISA

A FTSE 100 compounding machine and a FTSE 250 value stock are the UK shares Stephen Wright thinks could help…

Read more »

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

If I’d invested £1,000 in Lloyds shares at the start of the year, here’s what I’d have now

The stock market is unmoved, but Stephen Wright thinks last year’s record profits might give Lloyds shares a long-term boost.

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

I’ll snap up shares in this growth stock in March if others don’t get there first

This Fool says shares in this growth stock are stable, full of profit, and might be undervalued. But there are…

Read more »

Rainbow foil balloon of the number two on pink background
Investing Articles

My 2 top energy investment trust picks for a passive income

I'm aiming to buy more of these investment trusts for a passive income and the reasonably stable energy sector returns…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

5.5% dividend yield! Shares like these could be great for my retirement

Oliver Rodzianko thinks this company with a stellar dividend yield could be very useful when looking for income from his…

Read more »

Investing Articles

Should I buy this FTSE 250 stock as it soars back to the FTSE 100?

This FTSE 250 stock has rallied following its pandemic woes. This Fool thinks now could be a good time to…

Read more »