The FTSE 250 hasn’t exactly thrilled this year, but one company I’ve been quietly watching is still ticking over nicely: Goodwin (LSE: GDWN).
On 10 June, I wrote about this family-run engineering firm that’s returned an astonishing 4,632% over the last two decades. Since then, nothing big has happened, and the shares have drifted a little. That suits me. With the results due in early August (probably around the 6th or 7th), I’ve got a window to act.
Long-term story intact
The Goodwin share price is actually down 5% over the past year, which doesn’t scream momentum. But over three years, it’s climbed more than 200%. I’m quite pleased it isn’t going gangbusters today. I hope to buy before the next wave of growth.
The market-cap now sits at £563m. That still looks modest for a company with 18 global manufacturing sites, a strong record of reinvesting in growth, and decades of family ownership that’s kept the business steady and focused.
Nuclear, defence and LNG
Goodwin’s strength is its exposure to niche, long-cycle markets where quality counts. Last December, it reported a 53% jump in first-half pre-tax profit to £17.1m, with revenues rising to £106.4m.
Most of that came from delivering specialist products to the nuclear decommissioning and naval vessel sectors. That’s the kind of long-term infrastructure demand that doesn’t go away overnight.
In March, the group confirmed its order book had hit a record £300m. That included a $15m two-year contract for its German business, Noreva, supplying valves to a major LNG project, the biggest in its history. CEO Timothy Goodwin flagged LNG as a strong source of future demand. If that holds, this growth could keep coming.
The business has more than doubled both profitability and the order book over three years. That’s no accident. It’s been driven by specialist foundry and machine shop success, selling high-integrity components where precision matters more than price.
Watch the risks
There are a few caveats. Goodwin now trades on a price-to-earnings ratio just over 29, so this isn’t a bargain. And the order book’s crucial as growth depends on landing and executing big contracts. A delay or weak win could knock profits, sentiment and the shares. Global demand, especially in heavy engineering and LNG, also depends on the wider economy. Tariffs remain a constant concern.
The dividend yield isn’t stellar, with a trailing yield of 1.77%, but that’s mostly down to its strong share price growth. Over the years, investors have been well rewarded on this front. The shares go ex-dividend on 11 September, with the next payout landing on 3 October.
Goodwin looks like a long-term compounder, not a short-term rocket. The share price may stall if August’s results disappoint, but I’m not buying for one quarter. I’m hoping to hold for the next 10 or 20 years.
I’ve only got £2,000 of cash in my trading account, sadly, but I’ll be putting that into Goodwin (after the strict Motley Fool moratorium on buying stocks I’ve written about has expired). Then I’ll cross my fingers for good news in August. As ever when investing, there’s no guarantee I’ll get it, but I’m hopeful.
