Man Group (LSE: EMG) took off to fresh record peaks in Tuesday business, the stock last 4% higher on the day after the release of brilliant first-half trading numbers.
The hedge fund manager declared that funds under management registered at $95.9bn between January and June, surging from $80.9bn at the close of 2016. Man Group continued to benefit from robust client activity, with net inflows of $8.2bn galloping from $1bn during the corresponding period last year.
As a result, adjusted pre-tax profit exploded 48% year-on-year to $145m. And this encouraged the company to lift the interim dividend to 5 US cents per share from 4.5 cents in 2016.
Commenting on the results, chief executive Luke Ellis said: “We saw strong inflows from clients during the half and a 19% increase in funds under management with growth across all our investment managers. However our revenue margin has compressed during the half as we have won several large, low-margin mandates, meaning our management fees have grown at a much steadier pace.
But he also said that the first half was unusual in both the scale of net inflows, and the level of margin compression. He expects both to moderate in the second half, particularly given the uneven nature of institutional flows.
Man up
Despite the cautious assessment, City brokers believe Man Group should prove a lucrative stock for both growth and income hunters during the medium term at least.
The London business is expected to recover from recent heavy earnings dips with rises of 42% and 31% in 2017 and 2018 respectively. And current projections make it brilliant value for money — not only does the company carry a forward P/E ratio of just 14.7 times, but a sub-1 PEG readout of 0.4 underlines its great value.
The financial giant also trumps much of the competition in the dividend stakes. A predicted reward of 10 US cents per share this year creates a massive 4.5% yield. And an estimated 11.2-cent dividend for 2018 drives the yield to 5.1%.
Bet on this beauty
Betting behemoth Ladbrokes Coral Group (LSE: LCL) is another stock expected to remain a lucrative all-rounder for some time yet.
For 2017 the calculator bashers expect the FTSE 250 giant to generate earnings growth of 73%, and to follow this up with a 27% rise next year.
And recent estimates provide plenty of bang for investors’ buck. Not only does Ladbrokes boast a prospective P/E earnings multiple of 11.1 times, but its PEG reading for this year rings in at a mere 0.2.
There is much for dividend-hungry stock selectors to shout about too. An expected 4.9p per share dividend in 2017 yields a meaty 3.9%. In addition, the 6.6p reward predicted for next year drives the yield to 5.2%.
Synergies from the Coral merger continue to run ahead of schedule, and the business upgraded its target to £150m by 2019 back in June, the second upgrade in recent months and soaring above the original guidance of £65m. And with Digital net revenues also continuing to explode (these shot 17% higher during January-June), I believe there is plenty for share selectors to get excited about.
