Clipper Logistics plc is a high-growth mid-cap I'd retire on

Clipper Logistics(LSE: CLG) has only been a public company since 2014, but the company has quickly captured the attention of investors.

Revenue and earnings have expanded rapidly over the past three years, and investors have been well rewarded for this growth with shares in the group gaining 243%, excluding dividends, since listing.

And there could be further gains ahead. Today the company released its final figures for the fiscal year ended 30 April, which show growth across the board. Group revenue for the period increased by 17.2% from £290m to £340m and earnings before interest and tax increased 21.8%. Profit before tax surged 20.6%, and earnings per share increased drastically by 20.5% from 10.3p for fiscal 2016 to 12.5p. Cash generated from operations rose 25.2% to £25.7m and on the back of this impressive growth in cash flow, management declared a 20% increase in the company's dividend per share to 7.2p.

You might not have heard of Clipper, but you've almost certainly used the company's services at some point. It provides essential logistics services to the UK retail sector. Customers include ASOS, Morrisons, Halfords, John Lewis and other high street retailers as well as parcel delivery services. As the UK's consumers increasingly move away from the high street, Clipper is well placed to capitalise on this shift. The company operates click and collect services as well as returns services for a number of retailers. According to today's update, it has a "strong pipeline of new business opportunities" with both existing and new businesses.

Bright growth outlook

City analysts are highly excited about the group's growth potential predicting a 29% increase in earnings per share for fiscal 2018, followed by growth of 25% for fiscal 2019. If the company hits these lofty growth targets, it will have doubled earnings per share in four years. Pre-tax profit will have grown fivefold since 2014.

Unfortunately, this kind of growth does not come cheap. Shares in Clipper are currently trading at a forward P/E of 26.9 based on fiscal 2018 estimates. However, compared to projected earnings growth of 29%, this valuation does not seem overly demanding. There is also the potential for accelerated growth through acquisitions.

So, as a long-term buy, to capitalise on the consumer shift away from the high street, Clipper might be a great investment.

Undervalued spinoff

Another fast-growing logistics play is Eddie Stobart Logistics(LSE: ESL). Spun off from its parent company last year, City analysts expect the transport group to report earnings per share of 10.9p for the year ending 30 November 2017. For the following fiscal year, analysts have pencilled in earnings per share growth of 14% to 12.4p, giving a 2018 P/E ratio 13.

Once again, compared to the earnings growth rate this multiple seems to undervalue the business. As revenues grow, analysts also believe management will initiate a dividend payout of 5.6p per share for 2017 and 6.4p per share for 2018, giving a current dividend yield of 3.9% for 2018 at current prices.

Whereas Clipper is a more specialist retail logistics provider, Eddie Stobart provides a broader range of transportation services for clients and therefore, the company might be a better buy if Brexit uncertainty hits the UK consumer. Stobart won't escape unscathed from such a downturn, but the company's diversification across the rail, warehousing and trucking industries helps mitigate consumer exposure.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended ASOS. 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.

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