Britain has long been a destination of choice for people from all over the globe to come and study. And despite the obvious complications caused by the Brexit saga, the country’s popularity with foreign students is bigger than ever.
Latest data from the Universities and Colleges Admissions Service (UCAS), the body which handles applications for higher education in the UK, showed on Thursday that a record 75,380 overseas students (excluding those from the EU) have applied to study here, up 6% from the same point in 2017.
Meanwhile, those applying to study from inside the EU have increased 2% from the corresponding period last year, UCAS added, to 50,130 individuals.
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It is too early to say how application numbers from the latter group will alter in the years ahead, given the state of Brexit negotiations and how favourable conditions will end up being for EU nationals. But the latest figures suggest that aggregate demand for university places from those from abroad should remain strong.
Big, big yields
This backdrop makes the likes of Empiric Student Property (LSE: ESP) a great investment destination, in my opinion.
Mirroring the buoyant numbers from UCAS, the student accommodation provider declared in recent days that bookings for the 2018/19 academic year stood at 73% as of June 30, up from 63% at the same point last year. Empiric said that it’s now on track to hit full occupancy for the upcoming academic period.
With the business also stepping up efforts to slim down its cost base, it would appear to be in a strong position to generate solid profits growth in the medium term and probably beyond. While a 9% earnings slip is forecast for 2018, Empiric is predicted by City analysts to rebound with a 50% bottom line advance in 2019.
A bright profits outlook is also allowing the small-cap to continue doling out generous dividends. Rewards of 5p per share are forecast for both this year and next, meaning investors can drink in a bumper dividend yield of 5.5%.
Empiric’s forward P/E ratio of 26.1 times may be expensive on paper, though I reckon the rate at which overseas student numbers continue to grow makes the business worthy of this premium.
Great value. Terrific dividends
Investors seeking classic value plays may want to give Randall & Quilter Investment Holdings (LSE: RQIH) a look, instead.
Thanks to predictions of a 30% earnings jump in 2018, the insurance giant can be picked up on a forward P/E ratio of just 12.1 times — comfortably inside the value terrain of 15 times or below — as well as a corresponding sub-1 PEG reading of 0.4.
This is particularly cheap given that the AIM-quoted stock is in great shape to deliver strong and sustained profits growth, thanks to its robust new business pipeline (a 32% earnings improvement is anticipated for next year).
Reflecting this strong outlook, Randall & Quilter is predicted to fork out a 9.1p per share dividend this year, an estimate that yields 5.5%. And this readout leaps to 5.7% for next year due to the predicted 9.3p payment.
