Sunday share tips: Card Factory, Direct Line, Epwin Group

Shares in Card Factory are worth buying, said the Sunday Times' Inside the City column. Although its longstanding boss is about to retire and be replaced by discounter B&M's Karen Hubbard, she joins a company whose business model generates fistfuls of cash from an amazingly cheap offering. As Card Factory, unlike its rivals, makes almost all its own cards even the ones it sells for under 50p make a profit.

Analysts at Liberum capital said Card Factory's integrated production facilities create a significant advantage over competitors and predict the company has the potential to bestow £400m in dividend payouts between now and 2023. At the half-year stage for example it paid a 15p per share special dividend on top of a 2.5p interim payout and is expected to increase last year's 4.5p final dividend. Hubbard will be expected to continue the plan to increase the store count 50% from the current 800 in the coming years and not do too much to upset the perfect balance.

Direct Line shares are a 'hold' for Questor in the Sunday Telegraph partly due to its fairly robust income reputation in its few years since splitting off from RBS. Storms and ensuing floods in the north of the UK over the winter will cost the insurer's commercial arm £140m while its car and household insurance businesses have remained in the black to help full year results beat forecasts. There are several issues in the sector to ponder with Direct Line, not least the seemingly increasingly stormy weather.

The state-backed Flood Re scheme will go live on 4 April, to which all insurers contribute but are due to benefit from a rise in potential customers and access to shared data on risky areas. An increase in the insurance premium tax from 6% to 10% by the coming October will see proceeds used to improve flood defences, with insurers expected to shift the cost on to customers. Another factor is about about how to cater for financially squeezed younger drivers, but Direct Line has recruited young YouTube star Alfie Deyes to highlight its telematics-based insurance offering, which is among the most popular in the country.

Epwin Group is a long term 'buy' for Midas in the Mail on Sunday. AIM-listed Epwin supplies plastic products such as door frames, decking, guttering, even chimneys and other fittings for houses. Although a plastic chimney seems strange, Epwin has ridden the back of improving plastics technology which requires less maintenance and are often cheaper. But unlike their traditional brick counterparts they need replacing every 15-20 years, which creates a happy cycle for companies like Epwin.

While the replacement cycle has not moved as fast as some hopes, the cash-rich company has been buying rivals that specialise in other areas such as wood-plastic composites, and fibreglass dormers and roofing. Management are pursuing a steady style of growth, though if forthcoming annual results deliver the forecast 10% profits growth that's far from slouching, with a dividend of 6.6p also expected as part of a rewarding pay-out policy.

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