3 bargain shares that could help you retire rich

Royston Wild looks at three British stocks that could deliver barnstorming returns in the years ahead.

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A cautious advisory over trading conditions in 2017 has seen investor appetite for WPP (LSE: WPP) take a whack in recent sessions.

The stock dipped to three-month lows in early March and away from record peaks after warning that “continued tepid economic growth and recent weaker comparative net new business trends” will likely cause like-for-like revenue and net sales to rise around 2% this year.

By comparison, underlying revenues and net sales growth clocked in at 3% and 3.1% in the ad giant’s record-breaking 2016.

But I believe this weakness represents a great opportunity for long-term investors to stock up as, despite current weakness, WPP’s improving presence across developed and emerging economies should help offset current troubles in its key US and UK markets and deliver exceptional long-term returns.

Indeed, WPP saw aggregated revenues at constant currencies from Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe explode 11.6%, underlining the vast potential of these hot growth markets. And the marketing mammoth remains hungry for bolt-on acquisitions in key segments to keep revenues heading steadily higher.

The City certainly expects such measures to keep earnings rattling higher in spite of current trading turbulence, and anticipate healthy earnings expansion of 11% and 9% in 2017 and 2018 respectively.

These result in P/E ratios of just 13.4 times and 12.3 times, well below the FTSE 100 prospective average of 15 times. And WPP is predicted to keep powering dividends higher too, resulting in chunky dividend yields of 3.7% for this year and 4.1% for 2018.

I reckon WPP offers oodles of upside at current share prices.

Boxing clever

Healthy acquisition appetite has also built box-maker DS Smith (LSE: SMDS) into a major supplier to fast-moving consumer goods (FMCG) firms across the continent, and consequently a great growth stock.

Indeed, the business snapped up Cero of the UK and Denmark’s Deku-Pack during the first half of the current fiscal year to keep driving sales and building scale to service its customers. And DS Smith is also investing huge sums in the e-commerce arena, a strategy that should yield exceptional results as the online shopping sphere steadily grows.

The Square Mile expects DS Smith to report a 15% earnings rise in the period to April 2017. And an extra 7% advance is pencilled-in for fiscal 2018.

These projections create handsome P/E ratings of 14.1 times and 13.2 times respectively. And DS Smith also chucks up handy dividend yields — these register at 3.2% for this year and 3.5% for 2018.

Riding the crest of a wave

The prospect of Britain’s housing crunch persisting well into the future also makes me bullish over Crest Nicholson’s (LSE: CRST) investment potential.

The City shares my optimistic take, and earnings at the housebuilder are anticipated to rise 9% and 10% in the years to October 2017 and 2018 alone. These numbers create P/E ratios of a mere 8.4 times and 7.8 times.

And Crest Nicholson is expected to remain a lucrative pick for dividend seekers — yields of 6% and 6.8% are present for this year and next and smash the British big-cap forward average of 3.5%.

With the government still to properly address the country’s homes shortage to meet rampant buyer demand, I believe Crest Nicholson is in great shape to keep doling out brilliant returns.

RISK WARNING: 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. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Where we promote an affiliate partner’s brokerage products, these are focused on the trading of readily releasable securities.

Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended DS Smith. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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