Personal Group Holdings(LSE: PGH) found itself trekking lower in Tuesday business following the release of half-year trading numbers.
The stock was last 2% lower from Monday's close and trading at its cheapest since mid-July. However, there is little I can see from today's numbers that would cause me to sell up.
Personal Group advised that revenues ducked slightly between January and June, to £19.6m from £19.8m in the same 2016 period. This caused pre-tax profit from continuing operations to fall to £3m from £3.1m previously.
However, this bottom-line dip did not stop the employee services star from keeping its progressive dividend policy on track. It hiked the interim dividend to 11.35p per share, up 3.2% year-on-year, assisted in large part by its robust balance sheet -- cash and cash deposits clocked in at £16.5m at the half year, and there is no debt to speak of.
Past the worst?
Personal Group has been whacked by changes to employee benefit schemes last year, when the government altered the rules affecting workers' ability to sacrifice part of their wage for perks like company cars, giving certain tax advantages.
However, it appears to now be over the hump, and chief executive Mark Scanlon said: "We have seen a solid start to the year with the company performing in-line with management's expectations. We now have greater clarity regarding the outlook of the salary sacrifice market, which has enabled us to clarify our customer offering to deliver a better client experience."
The City expects the Milton Keynes business to endure another weighty earnings dip in 2017 caused by these aforementioned problems, and an 18% fall is currently predicted. But things are expected to start firing again from next year onwards, and a 7% bottom-line rise is currently predicted. These estimates leave the company dealing on an undemanding forward P/E ratio of 15.3 times.
And this positive long-term outlook is expected to keep Personal Group's generous dividend programme in business. Last year's 22p per share total dividend is anticipated to steam to 22.7p in the current period, resulting in a 6.1% yield. And the 23.2p reward forecast for 2018 shoves the yield to an electrifying 6.2%.
Tyman (LSE: TYMN) is another London-quoted stock I reckon could make investors hugely rich in the medium term and beyond. And my faith is backed up by bubbly broker projections.
The door and window manufacturer has been able to introduce handsome dividend hikes each and every year thanks to its rich record of earnings growth. And with analysts predicting further growth of 9% and 7% in 2017 and 2018, shareholder rewards are similarly expected to keep stomping skywards. Consequently Tyman changes hands on a scandalously-low prospective earnings multiple of 11.8 times.
Last year's 10.5p per share payment is expected to rise to 11.8p in 2017, and again to 12.7p in 2018. These figures create not-so-insignificant yields of 3.6% and 3.9% respectively. And these predictions are also pretty well protected, with dividend coverage registering at 2.3 times for this year and next.
Tyman saw revenues shoot 30% higher between January and June, to £260.4m, thanks to the positive impact of recent acquisitions and strong progress in international markets. I reckon there is plenty of reason for share pickers to give the construction star a long look right now.
Royston Wild has no position in any of the 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.