2 growth bargains I’d buy and hold for 25 years

Royston Wild looks at two stocks expected to deliver delicious earnings growth now and in the future.

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They say that no investment portfolio is complete without some exposure to gold.

The store-of-value metal is a great hedge in times of political and economic turbulence, providing some security when everything else may be going to hell in a handcart.

But while the idea of buying up bars and coins may turn many investors off (particularly as no dividends are offered up), there are plenty of great companies you can invest in to get exposure to the gold price. And I reckon Polymetal International (LSE: POLY) is one such brilliant business, particularly as it is also busy hiking production to help ensure steady earnings growth.

A terrific all-rounder

The Russia-focused miner announced on Monday that it produced a record quarterly amount of 470,000 gold equivalent ounces during July-September, up 26% year-on-year. As a result, Polymetal said that it remains on track to meet its 1.4m-ounce target for the full year.

With gold prices predicted by City brokers to remain pretty robust, and Polymetal throwing the kitchen sink at boosting production, earnings are expected to continue chugging northwards in the medium term at least. Bottom-line rises of 6% and 14% are forecast for 2017 and 2018 respectively.

Despite these perky projections however, Polymetal can still be picked up for a song, the company dealing on a prospective P/E ratio of just 12.7 times, no little distance below the widely-accepted value benchmark of 15 times.

And the gold digger provides plenty for dividend seekers to get excited about too. Having got its progressive dividend policy up and running again from last year, the business is predicted to pay a reward of 44 US cents per share, up from 27 cents in 2016 and yielding a pretty-decent 3.6%. And the 58-cent dividend anticipated for next year yielding a formidable 4.8%.

I reckon Polymetal could prove an excellent wealth generator in the years ahead.

Safe as houses

Telford Homes (LSE: TEF) is another share I am expecting to keep both growth and income investors happy long into the future.

Latest housing market numbers from Rightmove showed the average house price in the UK moved 1.1% higher in October, the biggest monthly rise since 2014. Although buying activity has fallen off more recently, it noted that a shortage of available properties is keeping prices afloat.

Telford Homes itself, which operates in and around the capital, noted last week that “there remains an ongoing and acute need for more homes to be built across London.” And this chronic shortage in new housing is unlikely to be resolved any time soon, certainly in my opinion.

Against this backcloth, City analysts are tipping earnings at Telford to keep pumping higher. A 29% improvement is predicted for the year ending March 2018, and an extra 18% rise is anticipated for fiscal 2019.

These estimates make the homebuilder stunning value for money too — the firm carries a forward P/E ratio of 8.4 times as well as a corresponding sub-1 PEG reading of 0.3.

With predicted dividends of 17p per share for this year and 18.9p for next year yielding 4.3% and 4.7% respectively, I reckon Telford Homes is a brilliant pick for those looking to supercharge their stocks portfolios.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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.

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