Forget the FTSE 100, these mid-caps could make you rich

The housebuilding companies keep posting stunning results and today's full-year figures from FTSE 250 firm Bellway(LSE: BWY) are no exception. Compared to a year ago, revenue lifted a little over 14% and earnings per share almost grew 13%. The directors expressed their ongoing confidence in the outlook by pushing the dividend 13% higher.

It seems there's no end to the demand for new housing and nothing much on the economic horizon to threaten that situation. The Bank of England warns that base interest rates are set to rise, but no one expects them to hit double-digits soon, so new houses look set to remain within the borrowing capabilities of many.

Volume growth, low debt

Bellway reports another year of volume growth, with completions lifting almost 11%, a happy situation "significantly contributing to the increase in operating profit, which rose by 16.2%." Although housebuilders are cyclical beasts, on the up-leg their quality metrics can be delicious, as Bellway's almost 28% return on capital employed attests.

The firm's balance sheet looks robust with gross borrowings running at just 5% of the level of operating profit and a net cash position of £16m. That's just what is needed to get the firm through the next housing market downturn when it comes, and I'd like to see that net cash figure rising much more from here while the economic sun is shining.

It still pumps millions into acquiring new building plots to drive future volume growth, and the order book is more than 17% higher than a year ago. The directors say the outlook is positive, which suggests why the stock continues to rise. At today's 3.542p share price, the forward price-to-earnings (P/E) ratio comes in just below nine and the forward dividend yield sits at 3.7%. Forward earnings look set to cover the payout a comfortable-looking three times. On conventional valuation indicators, I think Bellway continues to look attractive.

Steady progress

Moneysupermarket.com Group(LSE: MONY), the well-known comparison website provider, also updated the market today. Growth continues, with revenue for the nine months to 30 September rising 5% year-on-year. For the three months to 30 September, performance was a little better - revenue was up 6% compared to the year before.

The company is another FTSE 250 stalwart with an impressive record of earnings and share price growth over the last few years. The directors tell us that trading was driven in the third quarter by a strong performance from insurance-switching, stable figures from money-switching (despite fewer attractive offers from providers), recovery in turnover from home services, and growth in core energy-switching.

Chief executive Mark Lewis said in the update: "We're particularly encouraged by the continued growth of insurance and momentum in energy-switching." The firm is confident of meeting full-year expectations, which City analysts following the firm see as earnings growth of 6%, followed by 10% during 2018. At today's 318p share price, you can pick up some of the stock on a forward P/E ratio a little over 17 for 2018 and a forward dividend yield of 3.7%.

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Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Moneysupermarket.com. 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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