There are plenty of exciting mid-cap and small-cap companies in the UK that are growing quickly, and these kinds of companies can often outperform their larger-scale FTSE 100 peers.

With that in mind, here’s a look at two small-cap dividend stocks that I think have the potential to smash the FTSE 100 over the next five years.

Macfarlane Group

Macfarlane Group (LSE: MACF) is the largest distributor of protective packaging products in the UK, serving over 20,000 businesses across the nation. Packaging may not be the most exciting industry, but don’t let that put you off – sector stocks can still generate excellent returns for investors. For example, since I last covered the company in April 2017, its share price has risen 40% while the FTSE 100 has gone nowhere.

Macfarlane released its annual results for FY2018 this morning and, in my view, the numbers look pretty good. For the full year, turnover rose 11%, and profit before tax increased 17%, representing the ninth consecutive year of profit growth for the group. Furthermore, it also announced a healthy 10% dividend increase and said that despite uncertainty from Brexit, it’s confident it will demonstrate further progress in 2019.

From an investment point of view, I really like the look of Marfarlane right now. The stock trades on a very reasonable valuation (its trailing P/E is 16.3), is growing its dividend, return on equity is solid (averaging 16% over the last five years), and debt is low. Overall, I believe the stock offers a lot of potential and I think it should continue to outperform the FTSE 100 in the years ahead.

Clipper Logistics

Another fast-growing smaller company I believe could beat the FTSE 100 in the coming years is Clipper Logistics (LSE: CLG). It’s an innovative logistics group that counts the likes of ASOS, Sports Direct and John Lewis as customers.

Clipper shares had a fantastic run between 2015 and 2017, rising around 170%. Yet over the last year, the shares have been dumped by investors on the back of Brexit concerns. I think that’s created a fantastic opportunity for value hunters. Trading at around 400p a year ago, the stock can now be purchased for 233p.

Clipper’s recent half-year results in December looked good, with revenue rising 14% and profit before tax jumping 17%. The company also increased its dividend by an impressive 14%, which suggests management is confident about the future (and directors have been loading up on the shares themselves which is another bullish sign).

With the stock currently trading on a forward P/E of 13.9 and offering a prospective dividend yield of more than 4%, I believe now is the right time to buy.

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Edward Sheldon owns shares in Clipper Logistics. 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.

Here I’m running the rule over three terrific growth stocks to buy as well. Come and take a look.

In good health

Spire Healthcare Group (LSE: SPI) is a company that City brokers are predicting big things for. A 20% earnings bump is predicted for 2019, a figure that also leaves it dealing on a dirt-cheap forward P/E ratio of 9.9 times.

This figure is well inside the widely-regarded bargain benchmark of 10 times and not indicative of Spire’s exceptional profits potential as Britain’s ageing population likely drives demand for its private hospital care in the years ahead.

The business may have disappointed in mid-January when it announced that revenues growth would prove elusive in 2018, but signs of stronger trading in the second half have helped investor appetite to recover following an initial blip. And signs of further progress on this front, allied with news on its cost-reduction strategy when it announces full-year results on Thursday, February 28, could help its share price to continue rising.

A dependable earnings grower

Macfarlane Group (LSE: MACF) may not be expected to deliver the same sort of profits growth in 2019 as Spire. It’s expected to report a more modest 10% rise, but this is a projection that’s still not to be sniffed at.

Besides, the long record of earnings growth that the protective packaging giant has delivered over many years makes it worthy of attention from growth hunters. Particularly so as it deals on a prospective earnings multiple of just 11.7 times despite this pedigree.

Indeed, I reckon this low rating may give its share price licence to charge when full-year results are distributed on February 21. If November’s last update is anything to go by we could be in for a treat — back then, Macfarlane said that a sales jump of 13% during January-October meant that pre-tax profits were “well above” the levels of a year earlier.

Profits to double?

If you’re only interested in stocks predicted to report spectacular earnings growth in the near term, then Hochschild Mining (LSE: HOC) might be more to your liking.

City analysts expect the business to report a 94% earnings rise in 2019 because of the bright outlook for precious metal prices. I reckon bullion values could gain further traction in February alone as key macroeconomic and geopolitical issues, like a fresh US government shutdown and additional bickering over Brexit, threaten to blow up, a scenario that would drag the gold producers higher too.

Hochschild managed to raise production for six years on the spin, but total gold and silver output is predicted to fall this year, to 457,000 gold equivalent ounces and 37m silver equivalent ounces respectively. The long-term outlook remains robust as the Peruvian digger ramps up development of its assets like Inmaculada. In my opinion a forward PEG ratio of 0.3 times is exceptional value for a share with such compelling growth prospects.

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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.

A steady financial record

Sure enough, there’s a good record of steady growth in revenue, earnings and operating cash flow over the past few years. The firm’s efficient execution seems to have driven that good financial outcome. But there’s also been a powerful wave of demand in the industry, I reckon. We’ve seen rampant consumption of goods in recent decades and a trend towards extra packaging for goods, which can only have helped the firm to flourish.

With today’s half-year report, the good news continues and the stock is up around 5% as I write. Revenue moved 14% higher than the equivalent period a year ago and diluted earnings per share shot up 19%. The directors underlined their confidence in the outlook by pushing up the interim dividend by 8%.

MacFarlane’s trading has a second-half bias and the directors expect a seasonal uplift from the e-commerce sector to produce strong cash generation, which gives them confidence that the firm will achieve full-year expectations for 2018. City analysts following the firm predict that earnings will shoot up 32% this year and 6% in 2019, which suggests the firm’s growth objectives remain on track.

Organic and acquisitive growth

Chairman Stuart Paterson explained in today’s report that MacFarlane’s future performance depends on efforts to “grow sales, increase efficiencies and bring high-quality  acquisitions into the Group.” And the acquisition programme looks vibrant with the firm signing off two bolt-ons since the end of the period at a cost of around £3.5m. Tyler packaging and Harrisons Packaging are both successful companies and will now be integrated into the firm’s operations to contribute to future cash inflows.

Looking forward, Mr Paterson is confident of a good outcome for 2018. The firm’s growth strategy involves aiming to build strong, sustainable long-term customer relationships in the key growth sectors of the packaging and labels markets. Product design, good value, flexibility and product diversification will all feature in the firm’s efforts to stay ahead of the game – the meat and veg of most successful enterprises.

Meanwhile, I think the firm’s financial consistency makes this stock well worth your further consideration. To me, MacFarlane’s future looks bright. At today’s share price around 106p, you can pick up a few of the shares on a forward price-to-earnings ratio of just over 14 for 2019 and the forward dividend yield sits around 2.3%. I reckon that’s good value given the quality of the enterprise.

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Kevin Godbold 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.

Indeed, most investors fail to meet this objective, and even the professionals struggle. However, I’m confident that I’ve found two companies that can help you achieve this objective because they already have a history of doing so. 

A challenger rises up 

Shares in challenger bank Arbuthnot Banking Group (LSE: ARBB) have smashed the FTSE 100 over the past five, 10 and 15 years. Whichever period you look at, the shares have racked up a market-beating performance. 

According to market data provider Morningstar, over the past 10 years the FTSE 100 has produced a total annual return for investors of only 4%, and 4.2% over the past 15 years. Meanwhile, Arbuthnot’s stock has returned 23% per annum since 2008, and 11.5% since 2003. 

I see this performance continuing. City analysts are expecting the bank to report EPS growth of 25% for 2018, and an increase of 67% for 2019. With profit up 40% in the first half of 2018, it looks as if the bank is well on the way to meeting these figures, and possibly even beating the City’s EPS growth target for the year. I’ll be keeping an eye on analyst estimates over the next few months to see if they’re revised higher. 

To help drive growth, Arbuthnot also revealed today that it’s looking to establish a new lending division called Arbuthnot Specialist Lending. 

All in all, it looks to me as if Arbuthnot is firing on all cylinders. With the stock trading at a PEG ratio of only 0.4 — a ratio of less than one indicates the shares offer growth at a reasonable price — they seem cheap compared to the challenger’s expected growth rate. On top of its attractive valuation, Arbuthnot’s stock also yields 2.2%. 

All of the above indicate to me that Arbuthnot can continue to outperform the FTSE 100.  

Packing profits 

Packaging company Macfarlane (LSE: MACF) is another FTSE-beating champion I like. Over the past 12 months, the shares have more than doubled in value, easily beating the FTSE 100’s 2.9% gain (excluding dividends).

Over the past five years, the performance is even more impressive with the stock up 200%. Earnings growth has been the driver of returns. On average over the past five years, EPS have expanded at an average annual rate of 19%, and City analysts are expecting the growth to continue. 

The City is estimating EPS growth of 32% in 2018 and Macfarlane seems to be well on the way to hitting this target. “Group profit for the year to date is well ahead of that achieved in 2017,” a trading update issued before the firm’s AGM in May noted. “Recognising the influence of the online retail sector in the second half of the year, the Board is confident that Macfarlane will perform in line with its expectations for 2018,” the update continued. 

Based on current growth estimates the shares are trading at a forward P/E of 14.4, which isn’t too demanding in my view. Considering Macfarlane’s track record of growth, and future outlook, I believe its FTSE 100-beating performance can continue.

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Rupert Hargreaves owns no share 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.

The packaging giant has an extremely good track history of earnings expansion, the bottom line having swelled by double-digit percentages in four of the past five years.

City analysts believe this trend will continue with a 33% advance in 2018. And this reading also makes MacFarlane sterling value for money — as well as rocking a forward P/E ratio of 12.4 times, investors can also enjoy a sub-1 PEG reading of 0.4.

A more modest 5% rise is chalked in for next year, but I see scope for this reading to be upgraded and for profits to continue rising at a sprightly pace thereafter.

Box up a beauty

You may not have heard of it but you’ve more than likely handled one of Macfarlane’s products as you’ve excitedly (or not) unwrapped something you’ve ordered online.

The company is a major distributor of a broad range of protective packaging products and, thanks in large part to a number of acquisitions made in recent times, turnover at its Packaging Distribution arm — which is responsible for about nine-tenths of group revenues — jumped 10% in 2017 to £171.8m. Organic sales were responsible for 3% of the rise, a not-too-shoddy result either.

MacFarlane has both the appetite and the financial means to keep the acquisitions coming thick and fast to keep sales moving through the roof. But this is not the whole story. Indeed, through its so-called Innovation Lab it is able to carve out major contract wins by engaging with customers to cut costs and to create bespoke packaging solutions.

As MacFarlane expands its nationwide footprint and product ranges, I am convinced the business should continue to prove a lucrative growth bet long into the future.

Globe trotter

Robert Walters (LSE: RWA) is another little-known growth share I reckon should provide brilliant returns in the years ahead.

Like MacFarlane, the recruitment giant has a long record of bottom line rises and City analysts are expecting this trend to continue with increases of 5% in 2018 and 6% next year. And like the packaging powerhouse, current forecasts also make Robert Walters a decent value pick, the firm sporting a prospective P/E multiple of just 14.7 times.

This is a particular bargain considering the rate at which revenues are growing. The London business noted in January that net fee income jumped 22% at constant currencies during October-December, to £90.5m, the fastest rate of growth since the turn of the decade.

While there is some concern over the UK economy going forwards, Robert Walters’ performance in its home market continues to be impressive and net fee income rose 13% in the last quarter.

But even if it does begin to lose traction at home, share pickers can take confidence from its pounding progress overseas. With sales growing 28% in Europe and 12% in Asia, its international divisions now account for 70% of total net fee income. And measures to turbocharge its headcount across the globe bode well for further growth in its far-flung territories.

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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.

And it’s none other than TV broadcaster ITV (LSE: ITV), which sports a forward P/E ratio of under 10 and kicks off a healthy 5.03% yield that’s a full 100 basis points ahead of the FTSE 100’s. From a recent peak of nearly 260p per share in January of 2016, the company’s shares have fallen to a current price of around 155p as investors have grown bearish on its ability to adapt to a rapidly changing landscape.

But I believe at this price the company could be a fantastic hidden value option for long-term investors. While it certainly faces a tough outlook for traditional TV advertising, where revenue was down 5% year-on-year in 2017 to £1,591m, it’s fast-growing in-house production team is well-positioned to benefit from increased demand for fresh programming from a bevy of new customers ranging from Amazon to Netflix.

Indeed, last year the group’s revenue from its ITV Studios division jumped 13% to £1,582m while online and pay revenue rose a solid 7% to £248m. These non-traditional revenue sources, which are the future of the business, together with the cash cow broadcast TV business are a formidable pairing.

Last year the group’s £3,132m in external revenue generated £842m in adjusted EBITDA, which provides plenty of cash to continue investing in growing the in-house programming division and richly rewarding shareholders.

At its current valuation of just under 10 times forward earnings, I think investors are underestimating ITV’s ability to continue its progress in becoming a forward-facing production giant. With the cash to support this plan and a robust dividend, I reckon contrarian investors could find ITV a brilliant long-term buy at today’s share price.

Packaging up record growth

A more under-the-radar value stock benefitting from changing consumer habits is packaging specialist Macfarlane (LSE: MACF). This £133m market cap firm provides customers like ASOS with packaging materials and, more importantly, expert know-how that helps them ship more packages at lower prices and with fewer damaged goods when they arrive with customers.

And even though its share price has risen by a quarter in the past year, the company is still attractively valued at 12.3 times forward earnings with the added benefit of a well-covered 2.5% dividend yield and fast-improving balance sheet.

The company is growing nicely as it builds up the nationwide scale necessary to land larger accounts and also pushes into the booming e-commerce market. Last year sales were up 9% to £196m while the benefits of scale boosted pre-tax profits by 15% to £10m.

Looking forward, I expect Macfarlane to be able to match or exceed these figures as it opens new distribution centres, acquires smaller competitors and benefits from secular tailwinds boosting demand for parcel shipments. While the company is vulnerable to any economic downturn, I believe its low £14.3m in net debt, rising dividend and attractive valuation all provide a large enough margin of error for long-term investors.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Ian Pierce has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon and Netflix. The Motley Fool UK has recommended ITV. 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.

The results came in as the market expected. Revenue is 9% higher than the year before and diluted earnings per share lifted 13%. The directors expressed their confidence in the outlook by raising the full-year dividend by 8%.

A story of success

The real story with MacFarlane is its long run of earnings and dividend growth that propelled the share price up more than 200% over the past five years. At today’s 83p, the forward price-to-earnings (P/E) ratio sits around 11.5 for 2019, and the forward dividend yield is 3%. According to City analysts following the firm, earnings look set to rise 32% in the current year and 4% in 2019, which means the dividend payment will likely be covered about three times. Given the expected growth, I think the valuation is fair.

The good trading enabled a reduction in net borrowings by £1m, down to £14.3m, and the pension deficit fell by £2.7m, down to £11.8m, which the firm puts down to the deficit recovery contributions it made in the year. Such progress strengthening the balance sheet should help support the firm’s forward growth.

Chairman Stuart Patterson tells us in the report that the company aims to expand by concentrating on added-value products and services, as well as seeking efficiency improvements, and keeping an ear to the ground for value-enhancing acquisitions. The outlook is positive, and I see any weakness in the stock now as an opportunity to hop aboard the longer-term growth story.

Resurgent earnings growth

Meanwhile, photographic and image products specialist Vitec Group (LSE: VTC) posted its full-year results today and the shares have gone up around 4%. The bigger story here is that the shares have more than doubled since the summer of 2016 due to a resurgence in earnings growth. Today’s results continue that operational trend, with adjusted revenue from continuing operations 6.4% higher than the year before and adjusted basic earnings per share up a little over 11%. Net debt reduced by 43% down to around £43m, and the directors showed their confidence in the outlook by raising the total dividend by just over 12%.

The company has been busy in 2017 adjusting its business to capture the growth markets of the moment and disposed of two non-core businesses to fund the acquisitions of JOBY, Lowepro, and RTMotion. Chief executive Stephen Bird tells us in the report that the integration of these new brands is going well, saying that “Vitec has a strong position in exciting and fast-changing markets”.

City analysts are predicting earnings growth of 22% in 2018 and 10% in 2019. At today’s share price around 1,120p, you can buy into that growth trend for a forward P/E rating of about 13 for 2019, and the forward dividend yield is around 2.9%. Those forward earnings should cover the payment 2.7 times. I think the valuation seems fair for the growth on offer and see these as two attractive growth stocks that could double again.

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Kevin Godbold 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.

It is also good news for stock brokers, who usually see a substantial uptick in commission revenue when volatility increases as investors either buy or sell to take advantage of market movements.

This means that companies such as Jarvis Securities (LSE: JIM) should see a substantial uptick in their trading revenue and profitability during the first quarter of 2018, thanks to the volatility of the past few weeks.

Continued momentum 

For Jarvis, a successful first quarter will only extend the company’s run of good luck. Over the past five years, the firm has grown reported earnings per share by 14% per annum on average as it’s continued to attract new clients. And it turns out 2017 was “the most commercially successful year at Jarvis by some margin“, according to the full-year results release published today.

In the release for 2017, Jarvis saw a 22% increase in profit before tax and a 22% rise in earnings per share (City analysts had only penciled in EPS growth of 2.4% for 2017). This growth has given management the confidence to increase its dividend payout to shareholders by 34%, reflecting both positive current trading and an equally positive outlook for the group going forward.

Unfortunately, it seems the market doesn’t like these results as much as I do. The shares have been marked down by more than 10% in early deals. However, I believe this could present an excellent opportunity for long-term investors. Indeed, if Jarvis can continue to grow at its current rate, it should continue to generate enormous returns for shareholders going forward. 

Undervalued growth 

Based on current City estimates, shares in Jarvis are trading at a forward P/E of 17. Considering the EPS figure of 32.4p reported today is 2% above what analysts were expecting for 2018, I believe that this valuation severely understates the firm’s outlook. What’s more, there’s around 120p of cash on the balance sheet. 

These figures imply that the company is trading at a 2017 cash-adjusted P/E of only 11.4, which looks to me to be exceptionally cheap for a firm growing EPS at a double-digit rate.

Another company I’m waiting to buy is Macfarlane Group (LSE: MACF). The business, which designs, manufactures and distributes packaging products, flies under the radar of most investors, but it deserves extra attention.

Over the past few years, this company has gone from strength to strength as it has reinvested cash from operations back into the business. Net profit has grown at a rate of around 12% per annum for the past five years, and it’s increased its dividend distribution every year since 2012. 

At the time of writing, the shares support a dividend yield of 2.1% this year, which isn’t that impressive but they also trade at a forward P/E of 11.9, which looks cheap for a company that has a record of growing earnings at more than 10% per annum. 

Since the beginning of 2013, shares in Macfarlane have returned a total of 222% for investors, excluding dividends. Looking at current City forecasts, I believe that these returns can continue as the company builds on its existing successes.

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Rupert Hargreaves owns no share 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.

And this was underlined by the small-cap’s solid market update on Tuesday, the report sending the share price 12% higher.

Carr’s, which provides a wide array of agriculture-related goods, said during the 18 weeks to January 6 it was “trading in line with the Board’s expectations for the current financial year.” It added that trading is “significantly ahead of the prior year in both Agriculture and Engineering.”

At its Agriculture division, the Carlisle-based business said UK Agriculture had made a positive start to the year, noting that “improved farm incomes [are] continuing to reinforce farmer confidence.” It added that its retail business had made a solid start to the fiscal year with manufactured feed volumes rising year-on-year, while it also described machinery sales and UK feed block sales as “strong”.

The only blot came in the form of lower fuel volumes which was attributed to “milder weather and wet ground conditions affecting agricultural operations during the early part of the winter.”

At its Engineering arm, it said its UK Manufacturing operation are trading well ahead of the corresponding period a year earlier thanks to improved levels of activity.

A great all-rounder

This fresh trading news confirms the steady recovery in farming markets since the middle of last year, and gives forecasts of chunky earnings growth plenty of credibility

A 33% earnings improvement is forecast for the year ending August and this creates a dirt-cheap forward P/E ratio of 11.8 times. I reckon this figure could be upgraded as conditions improve at home as well as in its US marketplace.

What’s more, Carr’s could also be viewed as a compelling pick for income chasers today. Predictions of meaty profits growth are expected to keep sending dividends skywards and City analysts are predicting a 4.3p per share reward for fiscal 2018, up from the 4p dividend paid last year.

Not only does this projection yield a solid 3.1% but it is also pretty well protected with the target covered 2.8 times by earnings (comfortably above the widely-considered security watermark of 2 times).

Another growth giant

I reckon investors seeking cheap shares with robust earnings and dividend outlooks also need to pay Macfarlane Group (LSE: MACF) a visit.

In 2018 the packaging pay is predicted by the Square Mile to follow an anticipated 31% bottom-line improvement for last year with a 13% profits boost. And this leaves Macfarlane on an undemanding prospective P/E multiple of 11.7 times.

The Glasgow-headquartered business has been able to steadily lift dividends in recent years as earnings have relentlessly risen, and so a projected dividend of 2.1p per share for 2017 is predicted to rise again to 2.3p this year. Consequently Macfarlane sports a very decent 2.9% yield. Dividend coverage, meanwhile, rings in at 3 times.

I believe the outlook for 2018 over at Macfarlane can be described as pretty rosy. In November the business declared that “the momentum achieved in the first half of 2017 has continued in the second half of the year with improving organic growth and the continuing benefit from acquisitions.” This steady progress could also see analysts upgrade their profits projections for the near term and later.

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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.

Quiz questions

For the six months ended 30 September, it posted a 35% increase in both revenue and underlying earnings per share (EPS). Statutory EPS was down 3%, due almost entirely to the costs of its flotation (at 161p a share) on AIM in July.

I wrote an in-depth review of the company shortly after its listing, when the share price had risen to 190p. I thought it looked a decent business with good prospects but I felt the valuation of this omnichannel company had been bumped up too high by management talking up its digital offering. I suggested: “You’ll be able to pick the shares up below 190p in the coming months.”

So, where are we four months on? What do today’s results tell us? And what of the current valuation?

I’m impressed

The 35% increase in first-half revenue resulted from a 15.2% advance in UK stores and concessions, a 26.1% rise in International and a whopping 204.6% uplift in Online, which now accounts for 24.6% of group revenue compared with 10.8% a year ago.

The online growth came through QUIZ’s own website, a number of third-party websites, as well as the commencement of sales on the Next and Zalando websites. I’m impressed and believe QUIZ merits a somewhat higher valuation than in my original assessment.

The shares closed yesterday at 157.5p but are currently up 5.7% at 166.5p. The market cap is £206.8m and trailing 12-month sales are £104.4m, giving a price-to-sales (P/S) ratio of two, compared with 2.6 in July. This looks good value to me and while there are always higher risks with a small-cap with a short history as a listed company, I’m now inclined to rate the stock a ‘buy’.

Packing a punch

Macfarlane is a small-cap company I previously rated a ‘buy’ at 62p when I wrote about it ahead of its annual results in February. This packaging specialist, which is growing fast — organically and by acquisitions — in a fragmented market, is currently trading at 77p, giving it a market cap of £121m.

The group has three divisions. In Packaging, it’s the leading UK distributor of a comprehensive range of protective packaging products. In Labels, it designs and prints high quality self-adhesive and resealable labels, principally for fast-moving-consumer-goods customers in the UK, Europe and the US. In Packaging Design and Manufacture, it designs and produces protective packaging for high value, fragile products.

In an update on this year’s trading last week, the board said it “remains confident that our full-year expectations will be met.” The house broker forecasts EPS of 6.09p, giving an undemanding price-to-earnings ratio of 12.6. And with EPS of 6.09p representing over 30% growth on last year’s 4.67p, the price-to-earnings growth ratio is a cheap 0.4. So, despite the rise in the shares since February, I continue to see good value here and rate the stock a ‘buy’.

The post QUIZ plc & Macfarlane Group plc: 2 high-growth stocks you could regret not buying appeared first on The Motley Fool UK.

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G A Chester 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.