Pub owner and brewer Marston's (MARS) is toasting strong Christmas sales this morning as its shares rise 1.4% to 148.8p.

Like-for-like sales rose 2% in the 16 weeks ending 24 January,  but sales over the two-week festive period jumped 4.8%, including 12.5% growth on Christmas Day. That's what you call a 'Santa rally'.

The Pitcher & Piano chain-owner says operating margins are ahead of last year, which runs counter to what its peers have recently reported, such as Mitchell's & Butlers (MAB) margin slip revealed in November. Marston's profitability remains in line with expectations.

The group’s plan to open at least 25 new pub restaurants in the current financial year remains on track with eight openings expected in the first half.

MARSTON'S - Comparison Line Chart (Rebased to first)

In its brewing division group ale volumes are up 4% in the year to date with Hobgoblin, its biggest brand, up 10%.

The stock trades on a 2015 price to earnings ratio of 11 with an attractive 5% dividend yield.

N+1 Singer says this, combined with an earnings per share growth rate of 10%, means the stock is undervalued.

‘We also see the group as well-positioned to capitalise on an improving outlook for disposable income in the pocket of UK consumers,’ it says.

Issue Date: 27 Jan 2015