Despite a strong outlook for the British housing market TheBerkeley Group (LSE: BKG), like many of the FTSE 100's homebuilders, can be picked up for next to nothing today.
City predictions of a 9% earnings rise in the 12 months to April 2018 would keep the Cobham company's long-running growth story intact if proven correct. And this projection makes Berkeley a bona fide bargain today, creating a prospective P/E multiple of 8.1 times.
I see there being plenty of scope for an upward revision in this forecast, a common occurrence across the housebuilding sector across the past year, as well as the 31% profits slip forecast at Berkeley for next year.
Last month the business advised that pre-tax profits leapt 36% during the six months to October, to £533.3m, a result that encouraged it to lift its pre-tax profit guidance for the five years beginning May 2016 to £3.3bn from £3bn previously. This comes as little surprise as a combination of supportive lending conditions and gaping homes shortages drives demand for its new-build properties.
And this bright profits outlook is expected to underpin generous dividends too. A total reward of 181.3p per share is anticipated for fiscal 2018, yielding 4.4%. And the dial moves to 4.9% for next year thanks to the expected 203.6p dividend.
Just too cheap
The corrugated packaging giant also has a long history of unbroken earnings creation under its belt, and City analysts expect this trend to keep rolling for some time yet -- advances of 4% and 11% have been forecast for the years to April 2018 and 2019 respectively.
Such forecasts mean that DS Smith can be picked up on a forward P/E ratio of 14.9 times, just below the benchmark of 15 times that signals value for money.
What's more, the FTSE 100 business, like Berkeley Group, also offers plenty to stir dividend chasers. Its record of relentless profits growth has allowed payouts to rise at a fair lick, and with further progress in the offing, last year's 15.2p per share reward is predicted to improve to 16.3p this year and to 17.8p in fiscal 2019.
As a consequence, yields for this year and next stand at a bulky 3.2% and 3.5%.
DS Smith and its peers have been under no little pressure recently as rising paper costs have impacted margins. But the company is passing these higher input costs on to its customers with improving success, and is making terrific progress on meeting its 8% increase target.
For share pickers seeking emerging market exposure in particular it is certainly difficult to look past DS Smith, in my opinion. Through targeted M&A the business has been steadily boosting its footprint across Central and Eastern Europe, and it has plenty of financial firepower to keep the bolt-on buys coming.
But M&A is not the whole story, the London-based business also planning to build new box plans in Europe and the US to meet the needs of its FMCG clients. All told, I reckon DS Smith is a terrific selection for those seeking exceptional earnings growth in the near-term and beyond.
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Royston Wild has no position in any of the shares mentioned.The Motley Fool UK has recommended DS Smith. 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.