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If you’re looking for the best income opportunities, I think it’s important to look beyond the well-covered FTSE 100 names to find dividend growth stocks that are available at attractive valuations. There are plenty of hidden gems in the small-cap and mid-cap segments of the market, offering investors the opportunity to buy into companies with solid fundamentals and lots of upside potential.

Tempting growth

Brewin Dolphin (LSE: BRW), the FTSE 250 investment management company, seems attractive to me because of its tempting outlook on earnings growth.

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Amid a changing market landscape, the company is leveraging its current strengths to take advantage of shifting in client needs. It has positioned itself in a strong position to take advantage of the fast growing intermediaries-led channel and has continued to attract steady fund inflows, which is translating into healthy earnings growth and further growth opportunities.

Brewin Dolphin is also continuing to move away from traditional stockbroking towards higher-margin wealth management services, a market where it is seeing robust double-digit revenue growth. Against an uncertain macroeconomic backdrop, its expanding advice-led proposition has enduring relevance for customers in uncertain and complex times.

Undemanding valuations

With the company well placed to invest and innovate for further growth opportunities, valuations seem undemanding. Although the stock trades at 17.1 times its adjusted earnings last year, City analysts are predicting underlying earnings growth of 8% this year, with an acceleration to 12% for 2019. As such, its forward P/E is a more modest 15.7 on this year’s expected earnings, and is set to fall further to just 14 by 2019.

Dividends per share are also forecast to grow impressively, from 15p last year, to 16.6p this year and to 18,3p by 2019, representing annualised dividend growth of more than 12%. This means its yield is set to rise from 4.4% currently, to just over 5.3% within two years.

Favourable fundamentals

Elsewhere, Tritax Big Box REIT (LSE: BBOX), the landlord and developer of large-scale logistics facilities, also offers enticing dividend growth.

Favourable market fundamentals, particularly the shift towards e-commerce and tight supply of suitable properties, means management is confident about delivering continued growth in rental income and property values in 2018. The company also has an attractive short cycle pipeline of new pre-let developments, adding to its outlook of value creation.

Resilient sector

In 2017, the company achieved growth in net asset value (NAV) per share of 10.3% to 142.2p, demonstrating the resilience of the warehousing sector amid a slowdown in the wider property market.

Looking ahead, it isn’t too concerned about Brexit either, as it reckons increased border controls would mean its customers would require more warehousing domestically, further increasing demand for the type of property which the company invests in.

Shares in the REIT are fairly valued, with its share price in line with its NAV, down from a 12% premium a year ago. Tritax Big Box REIT also offers a tempting prospective dividend yield of 4.7%, up from 3.6% last year.

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Jack Tang 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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