Excepting a rare earnings dip in 2015, engineering colossus GKN (LSE: GKN) has long been a reliable pick for those seeking strong bottom-line growth.
Sales at the company's Land Systems division have slumped in recent times thanks to difficulties in the agricultural and construction markets. Organic sales fell 8% between January and September, but this isn't GKN's only problem, the firm warning last month that "military aerospace programmes and agricultural equipment markets look set to continue their decline."
Indeed, GKN's Aerospace arm has also been beset by falling military plane sales as mature defence programmes have expired.
Having said that, I believe that the long-term outlook for its aeroplane division remains extremely rosy as both Airbus and Boeing ramp up aircraft construction. Meanwhile, the acquisition of Fokker in 2015 has significantly bolstered GKN's position in the electrical wiring and aerostructures sub-segments, providing its sales outlook with an additional shot in the arm.
But this isn't the engineer's only hot growth channel -- indeed, sales at the firm's Driveline division continue to outstrip the wider market. And the top line should keep on rising as global car demand heads higher.
Scotiabank advised late last month that global car sales continued to climb in September, a 10% year-on-year rise representing the fastest rate of growth for three years. The bank also reported that sales in China surged 32% last month as buyers rushed to secure their vehicles before sales tax reductions expired. But this wasn't the only story -- 11 countries reported double-digit rises in September, Scotiabank noted.
Against this backcloth, the City expects earnings at GKN to get back on the front foot from this year, and growth of 2% and 12% is currently predicted for 2016 and 2017 respectively.
And although GKN recently galloped to 16-month tops in October, the firm is still attractively valued in my opinion -- P/E ratings of 10.8 times for this year and 9.6 times for 2017 fall well below the FTSE 100 average of 15 times.
Given GKN's role as a critical parts provider to major aerospace and automotive OEMs, and subsequent potential to generate stunning revenues growth, I reckon GKN is a snip at these prices.
It could be argued that the unpredictable nature of drugs development makes the likes of GlaxoSmithKline(LSE: GSK) a dicier pick for those seeking reliable earnings growth.
However, the Brentford company has a better record than many of its peers when it comes to getting product to market. And the vast sums GlaxoSmithKline has thrown at improving its product pipeline, through both organic investment and M&A activity, is clearly paying off -- new product sales clocked in at a staggering £1.21bn during the third quarter.
The number crunchers expect GlaxoSmithKline's next generation of sales drivers to generate bottom-line expansion of 31% in 2016, putting to bed four successive years of declines. And an additional 9% advance is anticipated for next year.
These figures create P/E ratios of just 15.9 times and 14.4 times, stellar value in my opinion given GlaxoSmithKline's enormous global wingspan and broad suite of market-leading drugs. I believe that, like GKN, the pharma star is phenomenal value at current levels.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK owns shares of GKN. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.