The Motley Fool

2 growth and dividend bargains that could make you a million

Despite hearing about even more brilliant revenues growth over at BBA Aviation (LSE: BBA), the market still does not fully appreciate the flying ace’s compelling long-term profits outlook, in my opinion. And this is reflected in its ultra-low valuations.

The aviation services giant has seen trading momentum pick up in recent months, BBA advising on Tuesday that revenues jumped 10.2% during the 10 months to October thanks to “good” organic growth at its Signature flight support division, as well as the positive impact of recent acquisitions.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Recent expansion at Signature has underpinned brilliant sales growth there (turnover advanced 14.2% in January-October, or 3.8% on a like-for-like basis). And BBA can expect the top line to keep on rising as robust economic growth in the US drives flight traffic.

The company noted today that B&GA flight movements had jumped 3.7% during the first nine months of 2017, and 4.3% in the three months ending September.

Flying high

Against this backcloth, City analysts are expecting earnings to balloon 17% in 2017 and 10% in 2018. And current projections make the FTSE 250 share brilliant value — while a forward P/E ratio of 18.5 times may soar above the widely-considered value watermark of 15 times, a corresponding PEG reading of 1.1 suggests the flying ace is actually brilliantly priced relative to its growth potential.

What’s more, it also offers plenty for income chasers to get excited about. 2016’s total dividend of 12.75 US cents per share is anticipated to jump to 13.1 cents this year and again to 14.1 cents in 2018.

As a consequence, yields clock in at a healthy 3.1% and 3.3% for this year and next.

Powering ahead

International Consolidated Airlines Group (LSE: IAG) is another share the City is predicting to make both growth and dividend investors very happy.

The FTSE 100 star is expected to deliver earnings expansion of 5% and 6% in 2017 and 2018, and these estimates make the British Airways owner stunning value for money — it sports a forward P/E rating of just 5.5 times.

On top of this, IAG is expected to keep dividend yields moving ahead of the British blue-chip average. A predicted 27.2 euro cent per share reward for 2017 produced a chunky 4% yield, and this marches to 4.3% for next year thanks to an expected 29.2 cent payment.

The business saw passenger revenues increase 1.6% during June-September, to €5.9bn, and IAG has big plans for its other brands as it steadily increases capacity through to 2022 in a bid to deliver strong and sustained sales growth.

In particular, the London-based company’s budget airlines like Aer Lingus and Vueling carry plenty of earnings potential as travellers move increasingly towards low-cost carriers. And of course its LEVEL transatlantic carrier offers a route into the potentially-explosive long-haul value segment.

With IAG also doubling down on its cost-cutting initiatives, I am convinced it should remain a reliable earnings generator long into the future.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended BBA Aviation. 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.