A positive trading update from Ferguson(LSE: FERG) saw the stock take in new record peaks in Tuesday trading. The FTSE 100 share rose as high as £55.65p per share at one point before settling back, meaning that the plumbing powerhouse's market value has swelled by almost a quarter during the past three months.
And I am convinced the firm has what it takes to keep on surging.
In today's bubbly update, it highlighted the brilliant progress it is making in the US, a region from which it sources around 90% of trading profit. Organic revenues Stateside leapt 8.3% during August-October, a period during which "all businesses generated good organic growth, with residential markets continuing to grow well, commercial markets growing reasonably and industrial markets continuing to improve."
This helped Ferguson overcome some "challenging" trading conditions in its domestic market with UK organic revenues up by a more modest 3.2% in the first quarter, and helped group sales rise 7.6% on an organic basis. And the business also performed impressively in its other foreign territories, with such sales in Canada and the emerging markets of Eastern Europe rising 7.7% year-on-year.
A splendid all-rounder
The Footsie star has a long record of creating chunky earnings expansion and the number crunchers expect this trend to keep on rolling. A 7% advance is chalked in for the year to July 2018.
A solid profits outlook is expected to keep dividends charging at a blistering rate too. Ferguson pushed the full-year payout 10% higher in fiscal 2017 to 110p per share. And the payout is expected to rise to 119.4p in the current period, resulting in a handy 2.2% yield.
Its forward P/E ratio of 17.6 times may be a touch heavy on paper, the value sitting above the widely-accepted value benchmark of 15 times or above. But not all stocks are created equal, of course, and given the plumber's exceptional momentum in overseas markets, I reckon a premium rating is fully merited today.
A hot value stock
Ibstock (LSE: IBST) is another brilliant share worthy of investment today, in my opinion.
City brokers are expecting earnings to edge 1% higher in 2017, down from the 10% advance enjoyed last year. But bottom-line growth is anticipated to accelerate again from next year (a 14% advance is currently predicted for 2018). In addition, current projections make the business great value at current prices, the firm sporting a forward P/E ratio of just 13.2 times.
And I am confident profits at the FTSE 250 business should keep on tearing higher along with domestic brick demand, and helped by the opening of its new Leicestershire facility that more than doubles its brickbuilding capacity to 190m.
What's more, this bright profits picture is expected to keep dividends growing at a great rate. Last year's 7.7p per share reward is anticipated to step to 8.2p in the present period, and 9.7p next year. As a result Ibstock carries meaty yields of 3.4% and 4% for 2017 and 2018 respectively.
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Royston Wild owns shares in Ibstock. 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.