Shares in Alumasc Group(LSE: ALU) have gained more than 50% since last June, hitting 183p, and they've almost trebled over the past five years.
But that tasty price growth has been going hand in hand with rising EPS and dividends, so we're not seeing a high valuation. Earnings rose by 50% between 2013 and 2016, while the dividend put on 44% in the same period.
Today, the shares are only on a forward P/E of around nine based on forecasts for the year to June 2017, dropping to 8.5 by 2018, and the progressive dividend looks set to yield 3.7% this year and 4% next. That looks cheap, so what's the story?
The firm provides "premium building products, systems and solutions", and there's certainly some knock-on effect from the weakening sentiment towards the housebuilding sector. And the rising costs of imported raw materials since Brexit-driven inflation set in won't have helped.
But I reckon a company doing such apparently good business in a healthy picks'n'shovels market, and which had net cash (of £5m) on its books at the end of December, deserves a better rating.
The group is actually more diverse than it might seem too, and encompasses divisions addressing solar shading and screening, roofing and walling, and water management, in addition to general housebuilding products.
At the interim stage, Alumasc had an order book to the tune of £27.6m, and chief executive Peter Hooper reckoned the firm's "chosen specialist markets continue to benefit from one or more of the long-term strategic growth drivers of energy management, water management, bespoke solutions and ease of construction."
Alumasc looks to me like a good one to stash away for your retirement.
MJ Gleeson(LSE: GLE) shares have done even better, giving shareholders a five-bagger over five years. At 625p today, we're looking at a richer rating than Alumasc's, but not outrageously so.
In fact, a forward P/E of 14 and forecast dividend yield of 2.9% are very close to the FTSE 100's long-term average, and 2018 predictions would improve those measures to 12.7 and 3.2% respectively. For a company that's quadrupled its earnings in just three years and has further growth forecast, I rate that a bargain valuation.
Gleeson is an urban regeneration and strategic land specialist, so it's also suffering from the malaise that's lingering around the housebuilding business, but interim results looked positive.
Although pre-tax profit gained a modest 1.8% and EPS only 1.2%, the company's net assets rose by 10.7% and cash flow of £8.6m led to a 175% rise in cash and equivalents. And net assets per share of 290p make the valuation of the business itself look attractive.
Chairman Dermot Gleeson told us the company is "confident of delivering a result for the full year in line with expectations," so we're likely to see modest earnings growth and a well-covered dividend.
Strongly progressive dividend
While a yield of only around 3% might not sound great, the annual cash handout has been growing way ahead of inflation and looks set to continue that way -- if you'd bought shares five years ago at around 110p, you'd have locked-in an effective yield of nearly 18% on your purchase price.
I don't see earnings growth continuing at anywhere near the breakneck pace of the past three years, but a steady 5%-10% per year looks plausible. Another good long-term buy, I think.
Alan Oscroft has no position in any shares mentioned. 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.