2 hot growth stocks with brilliant income potential

Infrastructure services play Costain Group (LSE: COST) was basically unmoved in Tuesday trading despite the release of excellent trading details. The stock was last 0.5% lower from the start-of-week close.

Costain advised that "trading during the first half has again been strong and the group is on course to deliver results for the year in line with the board's expectations."

The company's order book clocked in at a robust £3.7bn at the end of June, more than nine-tenths of which comprises repeat orders, "reflecting the strength of Costain's long-term relationships with its customers." And the Maidenhead business advised that it has a preferred bidder position of over £400m while tendering levels remain high.

And I believe the many billions of pounds being spent on Britain's energy, water and transport infrastructure should keep business bubbling higher at Costain.

Great dividend growth

The City certainly expects it to keep delivering robust earnings growth, in the medium term at least, and rises of 10% and 7% are pencilled-in for 2017 and 2018 respectively.

And these perky projections, allied with Costain's muscular balance sheet (net cash rose to £80bn as of the end of June from £69.2m a year earlier), are expected to keep dividends rising at a strong pace.

For this year a 14.7p per share dividend is expected, up from 12.7p in 2016 and yielding a handy 3.2%. And the yield jumps to 3.6% for 2018 thanks to predictions of a 16.2p reward.

Costain's share price has drifted lower more recently, the stock retreating from recent peaks around 490p per share. But I reckon it's only a matter of time before the small-cap resumes its upward trek and pounds to new record highs.

Cash splasher

I believe Ashtead Group(LSE: AHT) is also in great shape to keep dividends on an upward bent, enthusiasm which is also shared by the Square Mile's army of number crunchers.

Supported by another mighty earnings rise in the year to April 2018 (a 15% advance is currently predicted), it is expected to lift the dividend to 30.3p per share from 27.5p in fiscal 2017.

This projection yields a handy-if-unspectacular 1.9%. And with Ashtead's profits expected to rise 9% next year, another meaty dividend increase is predicted by the City -- indeed, a 34.1p payout is currently anticipated, nudging the yield to 2.2%.

Ashtead continues to benefit from robust market conditions, and underlying rental revenues galloped 13% higher in the 12 months to April 2017, the firm announced last month, to £2.9bn.

The FTSE 100 star is also investing heavily in the business to harness changing market trends, such as the need for more flexible rental services. Indeed, it spent more than £400m on acquisitions last year and a further £1.1bn on capital expenditure. And the firm expects a similar capex bill in fiscal 2018 as its growth programme continues.

And I am convinced that these actions should keep Ashtead's earnings, and dividends, skating higher in the years ahead.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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