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Senior (LSE: SNR) kept its recent skywards charge running in Monday business, the engineering giant 2% higher and just short of the 300p marker.

Share pickers were encouraged to keep piling in on the back of terrific full-year results. In 2017, Senior generated £1.02bn worth of sales, up 12% year-on-year and marking the first time the top line had barged through the £1bn barrier.

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In other news, the Hertfordshire firm saw free cash flow jump 20% from 2016 levels, to £58.3m, which in turn helped net debt to drop by a chunky £42.8m, to £155.3m.

However, adjusted pre-tax profit ducked 3% to £73.1m, caused by a deterioration in margins (group adjusted operating margin dropped 120 basis points to 8.1%). Adjusted earnings rose fractionally to 14.39p per share.

The turnaround titan

Challenging market conditions have caused Senior to struggle in years gone by, the company chalking up two punchy bottom-line declines in the past three years. However, the FTSE 250 firm’s turnaround strategy is clearly beginning to pay off and City analysts are expecting earnings to rise 6% in 2018 and 17% next year.

The company today reported a “strong order intake” last year, Senior chalking up a book-to-bill of 1.15 times. And a strong aerospace market in particular leaves it in great shape to deliver meaty profits expansion in future years.

The plane parts builder commented: “The production ramp-up of new, more efficient, large commercial aircraft programmes means the outlook for the commercial aerospace sector is both strong and visibleSenior has healthy shipset content on all the large commercial aircraft platforms and has further increased its content on the new engine versions during 2017.”

Senior’s rapidly-improving balance sheet saw it hike the full-year dividend 6% in 2017, to 6.95p per share. And this, allied to its solid earnings outlook, is expected to keep shareholder payouts chugging higher.

In 2018 a 7.3p per share dividend is forecast, yielding a very-decent 2.5%. And next year a 7.9p payout is predicted, creating a 2.7% yield.

Now Senior may be a tad expensive on paper, its forward P/E ratio of 19 times sitting above the accepted benchmark of 15 times o below that indicates good value for money. But I consider this to be a fair premium given its robust position in growing markets and rapidly-improving balance sheet.

The monster yielder

Those seeking big dividend yields may not be tempted in by Senior. They may want to have a look at Low & Bonar (LSE: LWB).

Like the engineer, I am tipping the performance materials play to keep thriving in difficult markets, a sentiment shared by the Square Mile’s army of number crunchers — earnings advances of 7% and 8% are forecast for the years to November 2018 and 2019 respectively.

And these bright projections are also set to keep dividends marching skywards. Thus a payment of 3.05p per share last year is expected to rise to 3.2p this year, and again to 3.4p in fiscal 2019. Yields stand at 5.3% and 5.7% for this and next year.

Today Low & Bonar can be picked up a prospective P/E ratio of 8.7 times. This is far too cheap in my opinion given that sales are rocketing (up 11% last year to £446.5m) and cost-cutting is clicking through the gears.

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Royston Wild has no position in any of the 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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