Is this growth stock a bargain after today’s results?

Could this company deliver high total returns in the long run?

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Finding bargain stocks may seem challenging now that share prices have experienced a significant Bull Run in recent months. After all, the margins of safety on offer may not be as wide as they once were. While this may be the case for a number of shares, others could deliver strong performance in future. Reporting on Monday was a stock which could continue to offer good value for money for long-term investors.

Improving performance

The AGM statement released by niche specialist services provider Premier Technical Services Group (LSE: PTSG) shows that it continues to make progress with its current strategy. It has recorded continuing sales growth and strong levels of orders since the start of the year. They are in line with expectations, while working capital utilisation and profit levels are likewise as per previous guidance. Furthermore, contract wins have been secured across all disciplines, with the company’s contract renewal rate continuing to be high.

The acquisition of Nimbus Lightning Protection in January could act as a positive catalyst on the company’s future performance. It has been successfully integrated into the company, with it contributing sales and profit to the business. More acquisitions could be ahead as the company seeks to achieve sector dominance, although its organic growth rate remains impressive.

Looking ahead, Premier Technical Services is expected to record a rise in its bottom line of 7% in the current year. Given that its shares trade on a price-to-earnings (P/E) ratio of 15.4, it appears to offer fair value for money at the present time. Its growth rate could improve in future if more acquisitions are made, while its dividend is covered 5.1 times by profit. This suggests a higher level of shareholder payout could be achievable in order to boost the company’s yield of 1.4%. As such, now could be the right time to buy it for the long term.

Strong track record

Also offering upbeat total return potential is timber and panel products distributor James Latham (LSE: LTHM). It has recorded three consecutive years of double-digit earnings growth, with its bottom line rising at an annualised rate of over 23% during the period.

Despite this, it trades on a P/E ratio of just 15.9, which suggests that it could offer upside potential. That’s even after a 32% share price rise during the last year. Investor sentiment appears to be relatively strong, although there could be scope for further improvements should the company continue to deliver on its current strategy and post rising profitability in future.

Even though James Latham currently yields just 1.7%, it could become a more attractive income stock in future. Its dividends are covered 3.8 times by profit, which suggests shareholder payouts could increase at a faster rate than profit over the long run without compromising the financial health of the business. Therefore, against a backdrop of rapidly-rising share prices, James Latham appears to offer a mix of growth, value and income potential for the long term.

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.

Peter Stephens 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.

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