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The five-year share price chart for Genel Energy (LSE: GENL) might not make your mind immediately reach for the word ‘growth’. In fact, since a peak of over £11.40 in early 2014, there’s been a slump of nearly 90% to today’s 122p. 

But if we look closer, we see the shares have started to climb back, more than doubling since late March 2017. There’s a good reason for that growth spurt, which I think could be the start of a nice long-term run — and my confidence is boosted by Thursday’s update.

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Genel’s problems had largely been twofold. Firstly, remaining reserves in its key Taq Taq field in the Kurdistan Region of Iraq had been downgraded. And more worryingly, the company had been struggling to get payment for the oil it was shipping — and that led to a big loss in 2016.

Cash flowing

But a third-quarter update Thursday reiterated that the company had reached a “landmark settlement” with the Kurdistan regional government, which has led to regular payments so far this year. And production is going as planned.

Unsurprisingly, Genel says that should “materially enhance our cash flows“, but pointed out that even before the start of payments, the company was still generating “meaningful free cash flow” and reducing its debt.

Analysts are already predicting a return to profit this year, followed by a near doubling in earnings per share (EPS) for 2018 — and that would drop the P/E to under 12, which looks like a good valuation to me.

The oil business in Iraq is clearly not without risk, but I reckon the growth story should be back on for Genel. And I see the shares as a bargain right now.

A Woodford pick

The housebuilding business is down in the dumps right now, but you’d never guess by looking at Countryside Properties (LSE: CSP). Neil Woodford snapped up a load of Countryside shares this summer and his funds now hold 10% of the company. It’s not hard to see why.

In 2016, Countryside’s EPS nearly trebled to 16.3p, and the City’s experts are predicting further growth this year of 66%, followed by another 27% in 2018. But that expected rate of growth looks well hidden by the shares’ forward P/E ratings, which would drop from a mooted 13.5 for the end of 2017 to just 10.5 a year later.

And that gives tasty PEG ratings of just 0.2 and 0.4 for the two years, which should have those growth investors who look for 0.7 or less jumping with excitement.

But that’s not all. Countryside is also handing out decent dividends. Now, the forecast yield of just 2.2% this year is not up there with the 6.7% expected from Taylor Wimpey or the 4.8% from Persimmon.

But it’s strongly progressive. From nothing in 2015, through 3.4p per share last year, there’s 8.1p on the cards for this year and 10.35p for 2018. You don’t need to worry about inflation with dividend growth like that.

Strong year

In an update ahead of full-year results (due 22 November), Countryside reported a 28% rise in completions to 3,389 homes, with a private forward order book up 8% to £242.4m. Average private selling prices dropped 8% to £430,000, but I don’t read any fear of a price collapse into that.

The company has a strong land bank of 19,826 plots (of which 83% have been “sourced strategically“), after adding an extra 2,896 plots during the year.

Countryside Properties looks cheap to me.

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Alan Oscroft 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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