Share pickers have been piling back into Laird(LSE: LRD) of late as hopes that its turnaround strategy is delivering the goods have risen.
The electronics manufacturer had moved higher in the lead-up to today's third quarter results and, with trading numbers surprising to the upside, the stock value popped back through 160p to trade at its highest since March. It is currently 4% higher on the day.
The London business announced that revenue for the third quarter continued the "much improved" performance seen in the first half of 2017. Sales shot 19% higher during January-June, to £245m, or 16% on a constant currencies basis.
While third quarter numbers benefitted from the earlier timing of public holidays in Europe and Asia, the improving underlying performance across core divisions was still apparent. At Performance Materials, organic sales detonated 13%, while at Connected Vehicle Solutions and Wireless and Thermal Systems they improved 20% and 17% respectively.
As a result Laird advised that full-year underlying profit before tax will register at the top end of market expectations.
Monster dividend growth ahead?
Laird has had to take the hatchet to dividends more recently due to previous trading troubles and its stretched balance sheet, the firm binning a final dividend for 2016, resulting in a full-year payment of 4.53p per share (down from 13p in the prior period).
And City analysts are predicting another drop this year, to 3.1p. This results in a handy-if-hardly-spectacular 2.1% yield.
But the dividend picture improves significantly from next year as Laird's recovery strategy beds-in, the total dividend predicted to leap to 4p, shoving the yield to 2.8%.
City analysts are expecting earnings to slide 6% in 2017, although this would mark a significant improvement from the 38% fall posted last year. And Laird is expected to get earnings moving back in the right direction from next year, a 10% rise currently forecast for 2018.
Given the terrific sales momentum that Laird is now experiencing, I reckon it is worthy of a slightly-toppy prospective P/E ratio of 16.2 times
Standard Life Aberdeen (LSE: SLA) is another dividend star I reckon is dealing far too cheaply at the present star.
It isn't hard to see why investors have failed to pile into the business of late given the trading difficulties Standard Life has endured more recently (it racked up net outflows of £3.7bn during January-July). But I am convinced the long-term earnings outlook remains incredibly exciting.
The merger of Standard Life and Aberdeen Asset Management earlier this month has created a financial giant with significant scale, a better revenues mix and terrific cross-selling possibilities, while the tie-up also cooks up plenty of cost synergies.
As a consequence, the FTSE 100 beauty is expected to see earnings pound 58% higher in 2017, or so say City analysts, and it is predicted to follow this up with an 8% bottom-line improvement next year.
Despite predictions of strong and sustained profits jumps, however, the market seems to be undervaluing the business in my opinion -- Standard Life Aberdeen carries a forward P/E ratio of just 14.8 times as well as a corresponding sub-1 PEG reading of 0.3.
Moreover, these perky predictions, in addition to the company's robust cash position, also translate into expectations of meaty yields. The 21.6p per share reward predicted for this year yields a splendid 4.9%, while 2018's expected payout of 23p yields a knockout 5.2%.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Standard Life Aberdeen. 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.