However, S&U manages risk in a disciplined manner, as you would expect of a company that dates to 1938 and can point to three generations of management by the founding family, which still has a major shareholding.
Moreover, the market for nearly new used cars continues to boom amid a shortage of new vehicles and Aspen is building a strong loan book and future pipeline even as it approves only a relatively small percentage of applications.
S&U is well placed to capitalise. The company can borrow up to £180m from its own lenders and with just £114m of those facilities already deployed the firm has a further £66m available for growth.
Finally, the stock’s valuation does catch the eye. The shares trade on less than 10 times historic and forecast earnings and offer a dividend yield, based on past divis, of more than 5pc.
Income seekers should note that S&U traditionally pays two interim dividends a year, one in November and one in March, followed by a final payment in July.
Stick with S&U.
Questor says: hold
Share price at close: £24.20
Update: AG Barr
According to last week’s full-year results, profits at soft drinks maker AG Barr now exceed pre-pandemic levels.
However, the share price does not and as the maker of Irn-Bru, Funkin and Rubicon drinks continues to generate cash and once more offers regular dividend payments, the shares appear to merit continuing support, even if we are still slightly in the red following our initial analysis of the stock in August 2019.
A forecast price-to-earnings ratio of 17 and a forecast yield of 2.8pc, based on consensus analysts’ forecasts, represent a premium and a discount respectively to the wider UK market.
But the company has a net cash pile of £68m, generates a high-teens percentage return on capital and nurtures the sort of popular brands that bring pricing power, a valuable characteristic at a time when galloping inflation is a major challenge for many companies.
Hold on to AG Barr.
Questor says: hold
Share price at close: 530p
Russ Mould is investment director at AJ Bell, the stockbroker
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