As a result, buying FTSE 100 shares that offer reliable growth potential could be a shrewd move. They could offer impressive dividend growth outlooks, as well as sound risk/reward ratios to help an investor to build their retirement savings over a long-term timeframe.

Dependable growth

One such company is FTSE 100 support services business Compass Group (LSE: CPG). It has an excellent track record of earnings growth, with its bottom line rising at a double-digit rate in four of the last five years. In fact, during that time, its net profit has increased at an annualised rate of 11%, which suggests it has a sound strategy that’s helping to deliver on its growth ambitions.

During the last four years, the company has been able to increase dividends by 40%. This works out as an annualised rate of almost 9%, which is clearly well ahead of inflation. With the company forecast to post 6% earnings growth in the current year, followed by growth of 9% next year, further dividend growth could be on the horizon. And with dividends being covered 2.1 times by profit, the current dividend yield of 2.3% could increase significantly in the long run.

With Compass having a relatively stable business model which is likely to deliver impressive profit growth, it appears to have an appealing risk/reward ratio. In the long run, it could outperform the FTSE 100 and help an investor to overcome a disappointing State Pension. As such, now could be the right time to buy it.

High valuation

In contrast, the investment potential of beverages company AG Barr (LSE: BAG) seems to be relatively limited. The firm released interim results on Tuesday which showed revenue grew by 5.5% to £136.9m. Its profit before tax moved 4% higher to £18.2m, with a relatively solid financial performance delivered despite a challenging and volatile marketplace at present.

The company continues to invest in its core brands and in innovation. Its newly-established partnerships with San Benedetto and Bundaberg are performing well, while its Funkin brand is gaining traction in new formats and new market segments.

The problem for investors, though, is that Barr’s share price seems to be excessively high. The company trades on a price-to-earnings (P/E) ratio of 26, and yet is forecast to post low-single digit earnings growth over the next two financial years. This suggests that it lacks value for money, and may mean that dividend growth is somewhat limited. As such, and while it’s performing well from a business perspective in a tough industry, its investment prospects seem to be disappointing.

The post A FTSE 100 dividend growth stock that could help you overcome the meagre State Pension appeared first on The Motley Fool UK.

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Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has recommended AG Barr and Compass Group. 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.

Cycle star

Car and bike emporium Halfords (LSE: HFD) has been rocked in recent times by pressure on its Cycling division, and the problems are expected to last for a little longer.

Still, galloping demand for its auto parts and services– helped by huge investment in its online and in-store propositions — are helping to offset current bumpiness. Indeed, Halfords saw total like-for-like sales rise 0.3% during the third quarter..

The City expects Halfords to bounce from a rare 5% earnings dip in the year to March 2016 with a 1% rise in 2017, resulting in a very-decent P/E multiple of 12.3 times for the upcoming year.

And Halfords carries a market-busting dividend yield of 4.3% for 2017. I believe the firm is a terrific selection for those seeking chunky earnings and payout growth in the years ahead.

Clothing colossus

Fashion giant Supergroup’s (LSE: SGP) decision to expand aggressively in foreign climes is clearly producing huge rewards.

The Superdry manufacturer saw revenues charge 14.6% higher in the last quarter, thanks to new store openings in Europe. And Supergroup’s rising footprint in the US and China promises to deliver further chunky sales expansion.

The number crunchers expect Supergroup to punch stunning earnings growth of 17% and 12% in the periods to April 2016 and 2017 respectively, producing P/E multiples of 16.5 times and 14.7 times.

I believe this is great value given Supergroup’s exceptional momentum, while dividend yields of 1.9% and 2.3% provide handy sweeteners.

Ferment a fortune

Brewing giant Marston’s (LSE: MARS) is also benefitting from the decision to ramp up its property base, with a rise in the number of its drinking holes helping the company set a fourth consecutive Christmas sales record last year.

Marston’s plans to open a further 20 new pub-restaurants and five lodges in the current year, a promising sign for further revenues growth. On top of this, surging demand for the firm’s beer brands is also bloating the top-line — sales volumes of Marston’s labels exploded 21% between October and late January.

The City expects Marston’s to follow a 4% earnings bounce in the year to September 2016 with a 9% increase the following year, resulting in ultra-low P/E ratings of 11 times and 10.2 times correspondingly. Meanwhile, dividend yields of 4.9% for this year and 5.1% for 2017 should keep income chasers happy.

Drinks darlings

Unsurprisingly news of a ‘sugar tax’  in this week’s Budget has whacked investor thirst for beverages giants Britvic (LSE: BVIC) and AG Barr (LSE: BAG) .

But it could be argued that the fear of the drinks sector is overplayed. The likes of Britvic and Barr have two years to reformulate their product ranges, a strategy which both firms have long been engaged in anyway.

As Investec points out, some 55% of Britvic’s British carbonates portfolio is already ‘sugar free’, while Barr’s revenues from zero-to-mid-sugar drinks has leapt to 42% from less than a third five years ago.

City brokers expect Barr to punch 6% earnings rises in the years to January 2017 and 2018, resulting in P/E ratings of 18.1 times and 17.1 times respectively. The company also boasts chunky dividend yields of 2.5% and 2.8% for these years.

Meanwhile, Britvic is predicted to see earnings rises of 5% and 7% for the periods to September 2016 and 2017, producing P/E ratings of 14.7 times and 13.9 times. As well, dividend yields for 2016 and 2017 ring in at 3.4% and 3.7% correspondingly.

While Britvic is clearly better value for money than Barr on paper, I believe both companies can be considered attractive investment destinations thanks to the massive brand investments in recent years, not to mention aggressive expansion into foreign territories.

The post 5 FTSE 250 Stars Offering Irresistible Value: Britvic Plc, Halfords Group plc, Supergroup PLC, Marston’s PLC & A.G. Barr plc appeared first on The Motley Fool UK.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Britvic. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Despite the troubled economic and operating landscape, all of the companies featured in this piece have lauded a very successful 2015 year in recent days while reporting either half year or full year results.

Record breaking

Bovis Homes (LSE: BVS) was a trend-setter, with its management being the first to report during the week. The shares fell nearly 10% in the run up to the release, after undergoing a much steeper decline throughout the course of February.

Despite such market jitters, the group announced record-breaking legal completions of 3,944 homes, a 17% increase in revenues and a 14% increase in the full year dividend to 40p for the period, bringing the yield for the shares to 4.5%.

The shares currently trade at 9.4x 2015 earnings per share and 1.25x net assets per share. Both multiples are considerably lower than they were six to nine months ago, although it is the price/NAV multiple that should probably be of more interest to investors when it comes to house-builders.

Strong growth

Persimmon (LSE: PSN) was the next to report, with management detailing strong growth in completions, reservations, revenues, margins and earnings for the full year. Management also announced an additional capital return, to the tune of £866m, that that will see each investor receive a special dividend of 110p per share in April this year.  

The shares now trade at 12.5x earnings per share for the 2015 period and 2.59x net assets per share, which is broadly in line with their position in H1 2015, although the group’s price/NAV multiple remains close to historical highs.

Raised dividend

Barratt Developments (LSE: BDEV) didn’t disappoint anybody today when it announced revenue growth of 19%, gross margin expansion to 18.6% and a disproportionately large 40% increase in operating profits during the first half of its financial year. Management also raised the interim dividend 25% higher, so that it now sits at 6p per share.

The shares currently trade at 10.7x the consensus estimate for earnings per share in 2016 and 2.05x net assets per share, the latter of which is modestly below what it was during much of 2015.

What do these numbers mean?

The UK’s house-builders are still turning a healthy profit and if we ignore the price/NAV side of valuations, it would seem that valuations still remain reasonable. However, price to earnings multiples mean little in the world of house-builders and with our sample group averaging nearly 2x NAV, valuations are close to historic highs.

Considering this, as well as the ongoing policy debate over house prices and the implications of such prices for mortgage eligibility and demand, it seems increasingly that the boom days where optimism drove ever higher share prices are beginning to dissipate.

My money is on management having seen the writing on the wall in this sense and this is why I believe that the majority of shareholder returns in future quarters will come from special distributions similar to those announced by Persimmon this week.

Therefore the question that investors should ask themselves is this — with average gains for share prices across the sector in excess of 100% over 2 ½ years, can any such distributions ever outweigh the potential downside now attached to the shares?

The post Is The Game Up For Bovis Homes Group Plc, Barratt Developments Plc & Persimmon Plc? appeared first on The Motley Fool UK.

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James Skinner has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.