Young & Cos Brewery(LSE: YNGA) has been recording steady growth in recent years, with earnings per share soaring from 42.8p in 2014 to 58.4p just two years later.
And results to April 2017 have shown more of the same, with adjusted EPS up a further 13.7% to 66.43p. That came from a 9.4% rise in revenue leading to a 13.5% jump in adjusted pre-tax profit, and enabled the company to lift its dividend by 6% to 18.5p per share. On a share price of 1,344p, that's a yield of only 1.4%, but it's nicely progressive and is outstripping inflation.
Chief executive Patrick Dardis spoke of "our consistent strategy of running high quality, differentiated, individual and well invested pubs" and told us that the company's plan is to "grow our estate through carefully selected acquisitions and developments."
Analysts are forecasting a couple more modest periods this year and next, most likely due to the UK's toughening economic outlook, but I'm seeing a good value company here and I wouldn't be at all surprised if those predictions are upgraded over the course of the year.
We're looking at a forward P/E of around 20, which might seem a bit on the high side. But the company, which runs the Young's, Geronimo and Ram Pub Company chains, reported net assets per share of 1,010p. Stripping that out from the share price, it values the business itself at only around 334p per share.
There might be other pub companies out there with more attractive-looking headline P/E valuations, but with Young & Co's asset situation and its relatively low debt of £63.5m, I'm liking the look of what I see.
Unlike Young & Co, waste management firm Renewi(LSE: RWI) has suffered a few years of falling earnings, but this year is expected to mark a turnaround with more than 40% EPS growth pencilled-in for each of the years to March 2018 and 2019.
The period to March 2017 was described by chief executive Peter Dilnot as "a transformational year with the successful completion of the merger with Van Gansewinkel Groep and the rebranding of the new combined group as Renewi" -- the firm having previously been known as Shanks Group.
With such large-scale restructuring and with a rights issue, this year's fundamentals perhaps don't really tell us a lot. A 27% rise in revenue is pleasing, but underlying EPS dropped by 12% (including the effect of the rights issue). The dividend dropped a little to 3.05p per share, for a yield of 3.2%, which is middling.
Year-end debt stood at £424m, which was a bit better than expected, but with a net debt-to-EBITDA ratio of 2.8 times, I'd want to see that coming down significantly in the next few years.
Return to growth
It's all about what the future will bring, and the company reckons that's going to be "sustainable growth, enhanced margins and attractive returns."
If forecasts turn out accurate, we'll be seeing a P/E multiple dropping to 14 by 2019, after two years of very attractive PEG ratings of 0.5 and 0.4 respectively. At the same time, the dividend is expected to grow to a yield of 3.6% in two years time.
The coming year is going to be a crucial one, but if the firm pulls off the integration of its legacy business with its acquisition, I see it as the start of a successful growth path.
More profitable growth
There are growth candidates of all shapes and sizes out there, and the tempting pick uncovered in our Top Growth Share From The Motley Fool report has been raking in the cash for years.
The past five years have brought in double-digit annual earnings growth, and the City's experts are predicting two more years of solid growth ahead of us. On top of that, a progressive dividend policy adds an extra attraction to the mix.
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Alan Oscroft has no position in any 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.