Travis Perkins(LSE: TPK) is the UKs leadingtimber and builders merchant, so the company is well placed to benefit from the countrys current home building boom.
However, Travis Perkins has some problems. In particular, some parts of the business seemhighly inefficient and this is something management is trying to fix.
Indeed, the company has recently embarked on a sort of self-help plan, to streamline the business and remove inefficiencies. Analysts believe that this programme will help improve cash flow across the group. According to Cityanalysts,Travis Perkins business model has plenty of room for improvement.
An improved cash flow should help Travis pay down debt, strengthen its balance sheet and hike the dividend payout. City forecasts predict Travis will hike its dividend payout by 9% per annum for the next two years. The companys earnings per share are expected to expand at an annual percentage rate in the low teens.
Travis currently trades at a forward P/E of 15.9 and supports a yield of 2.2%.
Growth through acquisitions
Over the past few decades,Glencore(LSE: GLEN) has built itself up to be one of the worlds largest miners and it has done this by buying low and selling high.
The company is famous for its ability to acquire competitors at or near the bottom of the market at a rock-bottom price. And with this being the case, the present market is the perfect hunting ground for Glencore.
Its been rumoured that Glencore could be weighing up a bid for mining giantRio Tinto, which would transform Glencores operations overnight.
Nevertheless, as of yet no deal has been unveiled but for long-term holders, buying Glencore at present levels could yieldimpressive results. The company currently trades just above a multi-year low, but according to City figures, next year Glencores earnings are set to jump 56%.
On thisbasis,the company is trading at a forward P/E of 12.2 and is set to support a dividend yield of 5% next year. Of course, if Glencore does go on a buying spree then these figures will be rapidly revised upwards.
Just like Travis Perkins,Kingfisher(LSE: KGF) plans to unlock value through a restructuring plan.
As it turns out, a strategic review commissioned by Kingfishers new CEO found that in certain areas, Kingfisher was grossly inefficient. For example, the Kingfisher group has five main operating companies with39,000 products across the group. But, only around 7,000 products are sold at each operating company.
StreamliningKingfishers product offering is just one of the strategic initiativesmanagement has planned for the company to help cut costs and boost profits.
Kingfisher currently trades at a forward P/E of 16 and supports a dividend yield of 2.9%. City analysts currently expect the companys earnings per share to expand by 9% during 2017 and a further 9% during 2018. Based on this projected growth Kingfishers shares are worth paying a premium for.
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