Appropriately enough, latest trading details from Summit Germany Ltd (LSE: SMTG) sent its shares to within a whisker of a record high, up 1% in Wednesday business, although they later fell back.
It advised that net profit surged 57.3% between January and June, to €12.9m. This was despite rental income falling 1.7% to €28.4m year-on-year, while funds from operations dropped to €17.5m, from €18.2m previously.
Meanwhile, Summit Germany declared that EPRA net asset value improved to €474.4m from €466.3m in the corresponding 2016 half.
Boring but beautiful
And Summit Germany remained pretty busy on the acquisition front in the first half to lay the groundwork for future profit growth. It paid €100m in the summer to snap up a property portfolio in Wolfsburg, comprising 80,000 square metres of fully let properties generating net rent of around €7.9m.
But splashing the cash is not the only game in town, with the Guernsey-headquartered business also busily hiving off non-strategic assets to improve the quality of its holdings (it has made €17.6m worth of disposals in the year to date).
Meanwhile, the property powerhouse also added two new joint ventures in H1 to develop 95 residential units in Berlin. Summit Germany sources almost 90% of all rents from the country’s major cities, and half from Germany’s five biggest metropolitan areas (namely Berlin, Frankfurt, Stuttgart, Hamburg and Dusseldorf). And this gives the company terrific income potential given the improving strength of the German economy and housing shortages in these cities.
Now while the business is expected to endure another heavy earnings slide in 2017 (a 31% decline is currently predicted), City brokers expect it to move back into growth with a 5% advance next year. And current projections make Summit Germany a great value share, the firm sporting an undemanding forward P/E ratio of 15 times.
There is also plenty for dividend chasers to get excited about, with predicted dividends of 4.04 euro cents per share this year and 4.23 cents in 2018 yielding 3.7% and 3.8%, respectively.
I am convinced the brilliant structural opportunities open to Summit Germany could generate excellent shareholder returns now and long into the future.
Sweet style
Supergroup (LSE: SGP) is another stock I am tipping to provide excellent investment riches in the years ahead.
The owner of the much-loved Superdry clothing brand is playing a blinder in terms of developing its global brand, expanding its geographic footprint and improving its position in the critical e-commerce segment.
It has seen like-for-like sales rise for 10 successive quarters, with growth averaging around 12%. The company currently operates in almost 150 countries and is ratcheting up its operations in white-hot growth markets like the US and China to keep revenues tearing higher.
So the number crunchers are predicting meaty earnings growth of 13% and 15% in the years to March 2018 and 2019 alone, leaving Supergroup dealing on a prospective P/E ratio of 17.2 times and corresponding PEG reading of 1.3.
I reckon this is a steal given the likelihood of lasting, and electrifying, earnings growth beyond the medium term. And with Supergroup also expected to keep its progressive dividend policy on track (payouts of 31.3p and 36.3p per share are forecasted for this year and next, yielding a handy 1.9% and 2.2%, respectively), I reckon the fashion star deserves a serious look right now.
