Building products supplier James Hardie Industries plc (ASX: JHX) has surged to a record high as management throws cash at shareholders on releasing its full year result.
Shares in James Hardie surged 10.7% to $16.85 in early trade on news that it will pay a special dividend of US22 cents on top of its regular final dividend of US27 cents a share.
If that is not enough, management will also buy back 5% of its shares on market.
There's plenty to like about what James Hardie had to say too with its 12% jump in adjusted net profit of $221.4 million for the year ended March 31 coming in ahead of the $216 million that analysts were expecting.
James Hardie believes that it will see ongoing growth in just about all its markets, including key regions of Europe and the US, which contribute to the bulk of its earnings.
What's also very pleasing is the earnings before interest and tax (EBIT) margin expansion to 22.4% from 21% for its US and Europe fibre cement business.
The stock may not look cheap after its 23% stellar run since January, but I think Jame Hardie still has some gas left in its tank to climb another 10% to 15%.
Assuming James Hardie can deliver 10% earnings per share growth for 2015-16 and the Australian dollar averages 79 US cents, the stock is trading on a price-earnings multiple of 23x.
However, I believe there is more upside for CSR Limited (ASX: CSR) following its better-than-expected full year report last week.
CSR has jumped 11% since I called it a buy, but it is still trading on a reasonable 13.3x P/E for 2015-16.
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