That might be the case for Centaur Media (LSE:CAU), with a price that has almost doubled since the start of 2025!

What’s more, in a surprising twist, the penny stock also offers a pretty robust 4.1% dividend yield despite its small size. And at today’s share price, buying 55,555 shares would unlock a £1,000 passive income.

So, can this share price momentum continue into 2026? And if so, should investors rush to buy while the yield is still ahead of the stock market’s 3.1% average?

Explosive growth

As a quick crash course, Centaur Media provides business intelligence, learning, and consultancy services to help with marketing. But rather than being driven by strong operational performance, the recent surge in its share price actually stems from asset sales.

Following a strategic review at the end of 2024, management has been refocusing its operations on its core marketing-focused services. And the firm subsequently sold off:

• MiniMBA in July 2025 for an enterprise value of £19m.
• MWCR Limited in September for £3.9m.
• Thelawyer.com in October 2025 for £43m.

The combined impact of all this has pushed the group’s net cash position to £71m. And subsequently, the share price has surged to match this sudden inflow of capital.

What now?

Executing lots of disposals creates some accounting complexities. But when pulling back the curtain, the performance of its remaining brands is a bit mixed. Combined, they generated £5.9m in revenue across the first six months of 2025, down from around £7.2m during the same period in 2024. And earnings were also in the red.

However, with the balance sheet now flooded with cash, the company has a lot of financial resources at hand to start righting the ship.

Management has already highlighted maximising operational efficiency as a top priority, along with cost-cutting efforts to streamline operations and bolster margins. And it seems to be fairly confident in its new strategy, given that dividends have been maintained despite reporting losses.

Time to buy?

Following all these asset sales, Centaur Media has become a far more stripped-down operation. While that certainly makes it easier for leadership to focus its efforts, it also significantly reduces the margin of error.

Bad execution or soft market conditions could wreak havoc on its financials and ultimately put an end to its currently robust yield. And with no detailed overarching turnaround plan outlined beyond cutting spending, the outlook for this business is far from transparent.

In other words, there’s a lot of uncertainty surrounding this penny stock right now. So, even with the prospect of lucrative passive income, this isn’t a business I’m rushing to invest in. Instead, I’m looking elsewhere for income-earning opportunities.

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Centaur Media provides corporate information and marketing services to businesses. It also runs events. This means it’s well-placed to exploit the historical uptick in business investment that accompanies economic recoveries. Centaur Media is already riding the upturn impressively and it said last week that results for 2021 should be at the top end of expectations.

The media specialist will suffer if the Covid-19 crisis suddenly worsens. Advertising budgets could be scaled back and its events business might be mothballed again if lockdown restrictions return. That said, I think these dangers are baked into Centaur’s mega-low valuation, so I’d still buy it.

Another delicious penny stock on my radar

DP Eurasia (LSE: DPEU) is another dirt-cheap UK share tipped for explosive earnings growth in 2022. City analysts think annual profits will detonate more than 320% year-on-year. This leaves the company trading on a PEG ratio 0.1. Remember, a reading below 1 suggests a stock is undervalued.

DP Eurasia is the master franchisee of the Domino’s Pizza takeaway business in Turkey, Russia, Georgia and Azerbaijan. These are regions witnessing soaring demand for food delivery as personal income levels rise. Its latest financials showed revenues leap 58.3% between January and June, a result so strong the business hiked its earnings forecasts for 2021.

Industry experts think takeaway sales in these regions will keep rocketing too. Statista, for example, think revenues will grow at a compound annual growth rate of 10.2% through to 2025. I’d buy DP Eurasia to ride this trend, even though it faces intensifying competition from fast-growing local players.

Sporting hero

Now, Sportech (LSE: SPO) doesn’t offer the same sort of eye-popping value as DP Eurasia. In fact, it trades on a pretty toppy price-to-earnings (P/E) ratio of 75 times for 2022. However, I think this big valuation could be considered fair given the huge opportunities it has in the US.

Sportech provides technology to gambling operators and lottery organisers. It also owns and operates around a dozen gaming and sports venues in Connecticut, alongside digital betting services. It’s had problems in days gone by securing a sports betting licence but it now seems to have turned the page after inking a 10-year deal with the Connecticut Lottery Corporation in August. It’s why City brokers are expecting the penny stock to break back into the black in 2022, following three years of consecutive losses.

Regulations on gambling in the US have eased significantly. This provides companies like Sportech with exceptional profits potential. Of course, future law changes in this highly-regulated market could have an adverse effect on Sportech and send its share price plummeting. But, today, I think Sportech’s growth outlook is pretty exciting.

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However, it’s not the only company that could offer an impressive income outlook. Outside of the retail sector is a stock that released a positive set of results on Wednesday and which could generate impressive total returns.

Improving performance

The company in question is Centaur Media (LSE: CAU). The business to business information, insight and events company delivered a rise in revenue of 6% in the most recent financial year. This represents progress against its transformation programme, with the company having successfully reshaped its portfolio, improved the long-term quality of its revenues and reduced exposure to advertising.

Clearly, there is still some way to go until its turnaround is complete. However, overhead savings of £1.8m and an improved revenue mix could help it to generate rising profitability in future. This could make its dividend more sustainable, as well as offer scope for a higher shareholder payout over the coming years.

At the present time, Centaur Media has a dividend yield of 6.3%. This is highly attractive at a time when inflation is less than half that figure. Although dividends are due to be covered only 1.1 times by profit this year, the potential for a rapid rise in payouts could be high in the long term. Under its new strategy, the stock could become a sound income play.

Difficult period

Next also has the potential to deliver a high income return in the long run. Clearly, the prospects for the UK retail sector are incredibly challenging at the present time. Inflation has moved ahead of wage growth and this has caused consumer confidence to deteriorate. Against this backdrop, a number of retailers are finding sales growth and profit rises somewhat elusive. As such, the company’s near term performance could disappoint to some extent.

However, with the stock due to record a rise in its bottom line of 3% in the next financial year, it could see investor sentiment improve over the medium term. Since it trades on a price-to-earnings (P/E) ratio of around 11.5, it seems to offer a wide margin of safety in case trading conditions deteriorate yet further. This could protect investors against share price falls in the wider retail sector, as well as provide scope for a higher level of capital growth in the long run.

Therefore, with Next having a dividend yield of 3.4% from a payout which is covered 2.6 times by profit, it appears to offer a solid income future. The potential for special dividends means that its dividend appeal could improve – especially if trading conditions do likewise in future years.

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With that in mind, here are two shares with bright financial outlooks. They could therefore deliver improved share price performance in the long run.

Positive performance

Reporting on Tuesday was business-to-business information, insight and events group Centaur Media (LSE: CAU). The company has experienced challenging headwinds in some of its markets, but has nevertheless performed in line with market expectations. It continues to make good progress regarding its cash collection and debtor reduction. Its transition away from print advertising is also progressing, with it set to represent less than 4% of total revenues in 2018. The company also announced the appointment of a new Chairman in its update.

Looking ahead to next year, the business is due to report a rise in earnings of 14%. This could help to improve investor sentiment in the stock after what has been a rather mixed number of years. And with it trading on a price-to-earnings growth (PEG) ratio of just 1.1, it appears to offer considerable upside potential.

In addition, Centaur Media also has a relatively bright outlook from an income perspective. It has a dividend yield that is currently in excess of 6%, and this could help to improve investor sentiment. Inflation has recently risen to 3.1% and with the prospect of an even higher rate in future, the company could be a sound means of overcoming a major to risk to investors in 2018.

Strong track record

Of course, investors may also begin to increasingly reward companies with a solid track record of growth as well as stocks that offer high levels of earnings increases. For example, food supplier Compass Group (LSE: CPG) has an excellent history of delivering high earnings growth, with its bottom line having risen in each of the last five years. In fact, its earnings growth rate has averaged over 11% during that time, which may appeal to investors ahead of Brexit.

Clearly, Brexit could prove to be a positive change for the UK economy. It may provide increased growth potential in the long run. However, in the short run it may mean added uncertainty as business and consumer confidence comes under pressure. This could make defensive shares such as Compass more attractive to investors, which could result in a higher rating being applied to the company’s shares.

With a price-to-earnings (P/E) ratio of just under 20, Compass Group may appear to be relatively expensive at the present time. However, with a defensive business model and a track record of consistent earnings growth, it could be a worthwhile share to hold given the macroeconomic uncertainty which may be ahead for UK investors.

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In this article I’m going to take a closer look at two small-caps I believe offer attractive growth potential, backed by solid financials.

The next Woodford?

Fund manager Miton Group (LSE: MGR) has made its name as a specialist small-cap investment firm. The company’s star attraction is Gervais Williams, who is the group’s head fund manager and an executive director of its board. Mr Williams also owns 6.9% of Miton stock. This should ensure that his interests are well-aligned with those of shareholders.

The group’s share price has risen by 86% over the last year, but it remains a small company, with a market cap of just £66.7m. Recent trading suggests to me that the outlook for growth remains strong.

Assets under management rose by 15% to £3,354m during the six months to 30 June, compared to a gain of 9% for the FTSE SmallCap index and 13% for the AIM All-Share Index. The increase in assets was divided fairly equally between investor inflows (up by £195m) and investment performance (up £254m). This suggests Miton’s strong fund performance is attracting new investors.

To support shareholder returns, the group used some of its net cash to buy back £2.6m of shares earlier in the year. Net cash at the end of June remained fairly high, at £18.2m, so further shareholder returns may be possible.

The stock isn’t quite as cheap as it was, but still looks reasonably priced on a 2017 forecast P/E of 16, falling to a P/E of 13.5 for 2018. I’d hold on for more at current levels.

Valuable information

Many publishing and media companies are struggling to stay profitable in the internet age. One of the few remaining areas of profitable growth lies in providing information-based digital services to corporate customers.

That’s where Centaur Media (LSE: CAU) comes in. This group provides “business to business information, insight and events”. Its share price has risen by 14% this year, as it’s continued a shift away from print media and towards business-to-business services.

The latest step forward came last week. Centaur announced the sale of its Home Interest consumer business for £32m, and the acquisition of the UK’s number one telemarketing agency, MarketMakers, for a total of up to £20.1m.

This company is midway through a complex shift in its operations. But its financial performance seems to be improving. Net debt has fallen steadily and the group is expected to report modest revenue growth this year.

Broker forecasts put the stock on a forecast P/E of 13 for 2017, falling to 11.5 in 2018. This level of earnings should be enough to cover the group’s 3p per share dividend, which provides a yield of 6.1%. City analysts expect this dividend to be maintained and have an average price target for the stock of 59p — 20% above current levels. In my view, Centaur could be a profitable buy over a three-to-five-year timeframe.

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Growth potential

Reporting on Friday was general insurance provider Hastings (LSE: HSTG). It delivered upbeat performance in the first quarter of the year, with an increase in live customer policies, higher average premiums and growing retail income. In fact, live customer policies rose to 2.42m, which represents a 14% year-on-year increase. Gross written premiums were 26% higher at £214.7m, while the company’s market share of UK private car insurance was 6.7% higher versus the same period of the prior year.

Looking ahead, Hastings has a sound business model through which to benefit from rising premiums after the recent Ogden rate change. It has a digitally-focused business model which should allow it to perform well through price comparison websites. Its adaptable and agile business model is expected to deliver a rise in earnings of 27% in the current year, followed by further growth of 11% next year. This puts it on a price-to-earnings growth (PEG) ratio of just 1.1.

In terms of its income prospects, Hastings currently yields 3.2%. However, its dividends were covered 1.5 times by profit last year, which suggests shareholder payouts could rise over the medium term. This viewpoint is further backed-up by the company’s earnings growth outlook and means that its dividends are due to rise by a third over the next two years. This puts Hastings on a forward yield of 4.2%, which indicates it is a strong long-term income stock.

Low valuation

Also offering strong income prospects is events and marketing specialist Centaur Media (LSE: CAU). It currently yields 6.7% from a dividend which is covered 1.4 times by profit. This suggests that it has scope to maintain or even raise dividends over the medium term. The chances of this taking place look set to be enhanced by earnings growth of 12% in the 2018 financial year.

Despite an upbeat growth outlook, Centaur Media trades on a price-to-earnings (P/E) ratio of just 10.4. This suggests that its shares offer a wide margin of safety, while a PEG ratio of 0.9 indicates that it offers growth at a reasonable price. Therefore, it could post improving share price performance following its 15% decline over the last year.

Certainly, the uncertain outlook for the UK and global economy means Centaur Media could experience some challenges in the near term. As a relatively cyclical business its financial performance may be more affected by the macroeconomic outlook than most of its index peers. However, with a wide margin of safety and impressive income prospects, it could be a shrewd long-term buy.

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Media on the mend

Shares in Centaur Media (LSE: CAU) have had a rotten year, falling 43% to 44.5p — but at least that includes a 1.7% uptick today as a result of the firm’s latest quarterly update, and we’ve seen a 33% recovery since the year’s low in early July.

Centaur, which does business to business information and events management, reported a 10% rise in digital revenues in Q3, with Legal services leading the way. Live event revenues gained 20%, with a nice 19% boost from the London Homebuilding Show.

The only downer was from advertising revenue, which fell 12% as print advertising revenue plunged by 21%. But overall, the firm says its cost reduction plan is going well, cashflow is good, and it’s on track to meet market expectations for the full year.

And that’s where dividends come in, with an attractive yield of 6.7% forecast for this year and similar for 2017. The risk at the moment seems to be covered by earnings, which would amount to only 1.45 times this year as earnings are expected to fall by 20% — and that seems too low for comfort for a company that’s been showing slightly erratic earnings. But a predicted recovery in 2017 earnings would see cover rising to 1.7 times, which is a good bit healthier.

Any company with a market cap as low as £64m is risky. But a low forward P/E of 10 this year, dropping to 8.5 next, makes me think there’s enough in dividends and in undervaluation to make Centaur a risk worth taking.

Challenger bank

With the UK’s big banks facing a post-Brexit rout, the time seems ripe for the so-called challenger banks to rise. Virgin Money is perhaps the best known, but I think we could be seeing a nice little growth investment in Metro Bank (LSE: MTRO).

Metro Bank only floated in March this year, and since then its shares are up 27% to 2,736p. The EU referendum result did send them down along with the rest of the sector, but if you’d got in immediately after on 27 June, you’d be sitting on a cracking 67% profit today.

A third-quarter update didn’t really move the share price as it’s pretty much in line with expectations, but we’re still looking at an impressive start to life as a public company — with deposits up 66% year-on-year, lending up 73%, revenues up 78%, and customer numbers up by 68,000 to 848,000.

And after a £3.4m loss was recorded in the second quarter, Metro made an underlying pre-tax profit of £0.6m in Q3, which should be the turning point. There’s still a loss on the cards for the full year, but analysts are predicting earnings of 25p to 26p per share for 2017.

Metro Bank, like Virgin Money, isn’t saddled with any of the legacy issues of its giant rivals. And with its focus entirely on the UK retail market and with the potential to growth rapidly from a very small base, I reckon this could be a great growth opportunity. There are no dividends on the horizon yet, obviously, but they surely can’t be too far in the future.

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What does Foxtons say?

Who shot Foxtons Group (LSE: FOXT)? Once again, it was Brexit that pulled the trigger as the EU referendum becomes the perfect blame-all for any business with a disappointing story to tell. The group’s half-year profits are certainly disappointing, down 42.2% to £10.5m due to a slowing property market with little hope of recovery this year. Revenue fell 3.1% to £68.8m.

The London property market, where Foxtons is focused, had to slow at some point, and there were signs it was doing so well before Brexit. What the result may do is stretch out the pain that little bit further, although the 10% drop in Sterling may also attract foreign buyers. The second quarter was much weaker than the first and this was as much down to the 3% stamp duty surcharge introduced on 1 April as the Leave victory.

Foxtons remains a big player in the London sales and lettings market and is looking to expand to 100 branches, despite current uncertainties. The shares are down nearly 7% today leaving Foxtons trading at 10.08 times earnings and yielding 4.34%, which may tempt buyers who believe the capital can boom again.

Profits down, shares up

Engineering firm IMI (LSE: IMI) has seen its share price leap more than 3% in early trading, despite reporting a 19% drop in first-half pre-tax profits from £107m to £86m as revenue fell in challenging conditions. Net debt rose from £289m to £334m, partly due to an adverse currency impact of £70m.  

IMI expects more favourable currency impacts over the full year as it generates more than 90% of sales outside the UK and a weaker pound could boost revenues and operating profits. The business faces challenging conditions in a number of key sectors but chief executive Mark Selway claims he can drive growth through operational efficiency, enhancing processes and launching new products. Given the challenges, IMI looks pricey at 16.64 times earnings, despite the respectable 3.59% yield.

Less than bullish

Multi-platform business information and events group Centaur Media (LSE: CAU) has had a tough year, its share price falling 54% from 81p to 37p. It has seen its advertising and sponsorships revenues squeezed in recent months, yet recent updates show revenues rising at a fairly convincing pace, and this continues in today’s update.

Reported revenues grew by 8% to £39.9m in the six months to 30 June with underlying revenue growth of 4%. Premium content and live events revenues was up, more than offsetting a 6% drop in advertising revenues. Unfortunately, this was offset by a dip in adjusted operating profits to £5m, down from £6.1m in 2015, while adjusted operating margins of 12.5% were down from 16.6% in 2015. Lower advertising revenues, the cost of building premium content products and commercial team capability all hit reported operating profits, which slumped to £3.1m, down from £4.8m last year.

Centaur’s 170% cash conversion for the first four months of the year may convince some, as will its rock bottom valuation of 6.73 times earnings and sky-high 8.33% yield. Tempting, but risky.

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Road warrior

Broad risk-aversion has seen coaches colossus National Express (LSE: NEX) slip 1% on Wednesday despite the release of an upbeat trading update.

National Express advised that it “has made a strong start to the year, with total revenue up 11% in the period on a constant currency basis” in the year to 1 April. Underlying sales were up 4% during the period, the firm added, with revenues growing across all its divisions.

National Express managed to post underlying revenue growth of 4% at its UK Coach division, despite the impact of recent terror-related incidents in Belgium in March, with passenger numbers rising 6% in the period.

With National Express clearly making strong progress at home and abroad, the City expects earnings to rise 6% in 2016 alone, resulting in a very attractive P/E rating of 13.2 times.

And a chunky dividend yield of 3.7% for the year makes the bus-and-train operator an attractive investment destination, in my opinion.

Media star

Business information and media specialist Centaur Media (LSE: CAU) also furnished the market with a bright trading update in midweek business. However, this couldn’t stop the stock slumping to fresh two-and-a-half-year lows below 50p.

Centaur announced that revenues had risen 5% between January and April, prompting it to affirm its full-year guidance for 2016.

Centaur added that “paid-for content and exhibitions revenues continue to grow well, although we are currently experiencing some market pressure in advertising and sponsorship revenues.”

The City expects growth in its high-quality channels to deliver plump returns in the coming years, and Centaur is expected to follow flatlining earnings in 2016 with a 10% jump in 2017. Consequently the media play boasts ultra-low P/E ratings of 9.2 times and 8.6 times for these periods.

And dividend hunters should give dividend projections for Centaur serious attention — the firm boasts market-bashing yields of 6.2% and 6.7% for 2016 and 2017.

Credit concerns

Credit report provider Experian (LSE: EXPN) also saw its share price slip on Wednesday, the firm enduring a 2% fall following a patchy set of trading numbers.

Experian advised that revenues slipped 4% in the year to March 2016, to $4.5bn, reflecting the adverse impact of currency movements. At constant exchange rates the top line actually grew 5% in the period.

Profit before tax clocked in at just over $1bn during the period, up marginally year-on-year.

Experian also announced plans to buy back $400m worth of shares in the current fiscal year, drawing to a close the current $800m repurchase programme.

While the City expects earnings to grow 5% in 2017, this figure results in an elevated P/E rating of 19 times. And a 2.3% dividend yields for the current year lags the prospective FTSE 100 average of 3.5% by some margin.

Given the likelihood of further chronic currency headaches this year and beyond, I believe Experian is an unattractive stock selection at current prices.

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Creaking balance sheets and poor earnings outlooks have put paid to the progressive policies of many of the index’s go-to dividend stocks, leading many investors to look further afield for strong — and reliable — income flows.

With this in mind I’m looking at four London stars outside the FTSE 100 that appear on course to deliver stunning returns.

Build a fortune

FTSE 250 play 3i Infrastructure’s (LSE: 3IN) focus on core infrastructure projects across Europe makes it a solid selection for those seeking abundant dividend flows, in my opinion.

3i Infrastructure saw its portfolio generate income of £21.8m during January-March, up from £18.6m a year earlier. And promisingly, the firm commented that its investment adviser “continues to make good progress in developing its pipeline of investment opportunities,” a promising sign for earnings and dividend expansion.

The City expects 3i Infrastructure to increase an anticipated 7.3p-per-share dividend for the year ended March 2016 up to 7.5p in the period to March 2017, resulting in a chunky 4.5% yield. And a projected 7.8p reward in 2018 drives the yield to a handsome 4.7%.

Space star

I reckon that real estate investment trust (or REIT) SEGRO (LSE: SGRO) is also a scintillating stock selection thanks to improving conditions in the UK and on the continent.

SEGRO specialises in ‘big box’ logistics sites as well as urban distribution and light industrial warehouses, its portfolio benefitting from structural growth in hot areas like e-commerce. Indeed, the quality of the firm’s property portfolio saw vacancy rates fall to just 4.8% in 2015, the lowest level for well over a decade.  

The number crunchers expect SEGRO to shell out a dividend of 16.1p per share for 2016, yielding a terrific 4%. And the yield moves to 4.2% for next year thanks to predictions of a 16.6p reward.

Media mammoth

Shares in business information and media group Centaur Media (LSE: CAU) have moved steadily lower since the autumn,  a situation that makes the company a top-level value selection in my book.

The business announced last month that it had made an “encouraging” start to the year, and is aiming to deliver revenues growth of 5% in 2016. Indeed, Centaur Media’s rising focus on the high-quality digital paid-for content and live events markets should deliver resplendent top-line expansion well beyond this year, in my opinion.

City brokers expect Centaur Media to deliver a 3.2p-per-share dividend in 2016, yielding an eye-watering 6.2%. And an anticipated payout of 3.4p for next year pushes the yield to a brilliant 6.6%.

Recruit a dividend great

With earnings at recruitment specialist SThree (LSE: STHR) expected to speed relentlessly higher from this year onwards, the Square Mile unsurprisingly expects the business to get dividends chugging higher once more

SThree announced that gross profit cantered 10% higher during December-February, with double-digit growth across its ICT and Life Sciences divisions offsetting continued weakness across its oil and gas-related activities. On top of this, SThree is expanding its presence in the strong North American market to deliver sterling returns.

Against this backcloth, the City expects SThree to lift a long-running dividend of 14p per share to 14.4p in the year to November 2016, and again to 14.8p in the following period. Consequently the stock boasts exceptional yields of 4.6% and 4.8% for these years.

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