Too late to buy this stock that's turned £10,000 into £80,000?

Motor finance and specialist lending business S&U plc(LSE: SUS) flies under most investors' radars. Indeed, only around 3,000 shares change hands every day. On some days just a few hundred shares are traded.

However, despite the lack of interest, S&U has achieved outstanding returns for investors over the past 10 years. Thanks to its conservative operating model and prudent management, including dividends the shares have turned £10,000 into £80,000 since the end of 2007.

And today the company reported yet another robust set of trading figures. Since July, the group has reportedly seen active customer numbers rise from 49,000 to 53,000, while net customer receivables have increased above £240m for the first time -- up from nearly £227m in July.

The group's relatively new bridging loan operation, Aspen Finance, is still in the pilot phase but has managed to increase its loan book to £9m from £2m in July.

Cautious approach

Even though S&U has been able to achieve steady growth over the past decade, recently the firm has come under pressure due to concerns about the state of the car leasing and lending sector. A spike in lending to buyers over the past few years has created the perfect storm of high debt levels and an oversupplied second-hand market.

S&U's management tried to address this issue in today's update. Chairman Anthony Coombs said: "Our selective lending and continuous refinement of our underwriting underpin our debt quality and produce steady sustainable growth.

"I am pleased to see this seemingly becoming more widely recognised within the investing community; we will continue our high standards of responsible lending and the excellent performance which results from this."

On a rolling 12-month basis, S&U's impairment-to-revenue percentage increased slightly to 23.4%, which the company ascribed primarily to the overall portfolio product mix.

Positive outlook

S&U's conservative approach to lending helped the company through the financial crisis, and I believe that this time around, it will benefit from the same fiscal responsibility.

City analysts appear to agree with this view. Analysts have pencilled in earnings per share growth of 19% for the fiscal year ending 31 January 2018, and growth of 17% for the following year. If the firm hits these targets, it is in line to earn 237p per share for the year ending January 2019, giving a forward P/E of 9.8.

In addition to this stonking growth, management is returning around half of its earnings to investors via dividends. The shares currently yield 4%, but over the next three years, as profits expand, analysts expect the payout to grow by around 20% leaving the stock yielding 5% by 2019.

The bottom line

So overall, S&U has achieved outstanding returns for its investors over the past decade, and despite concerns about the state of the broader lending industry, I believe that the company can continue to outperform the rest of the market.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended S & U. 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.