A largely-unbroken record of profits growth over at Associated British Foods(LSE: ABF) has allowed the FTSE 100 colossus to have the confidence to lift dividends at a healthy pace over the past five years.
And with City analysts anticipating further bottom-line progression, the Primark owner's progressive payout looks like it has more in the tank. Helped by an anticipated 6% profits increase in the year to September 2018, it is predicted to lift the dividend to 44.3p per share from 41p in fiscal 2017.
And next year a 48.4p reward is predicted, supported by an estimated 9% earnings rise.
Consequent yields of 1.6% and 1.8% for 2018 and 2019 respectively may not immediately impress. Nor may an elevated forward P/E ratio of 20.4 times. But in my opinion, the prospect of strong and sustained earnings, and dividend growth, still makes it a very attractive investment destination.
As I have commented before, I believe ambitious expansion of the Primark brand provides plenty of reason to get excited as bargain-loving shoppers across Europe and now North America flock through the doors. This is particularly the case in the UK where volumes continue to surge and should keep on keeping on as economic conditions become evertougher.
Grab a slice of the action
Now Just Eat (LSE: JE) may appear a strange selection for this article, given that it is still to fork out a maiden dividend.
But all that could be about to change, or so say the City boffins. A first dividend of 0.6p per share is forecast for 2018, and a second of a much-improved 1.7p predicted for next year.
Subsequent yields of 0.1% and 0.2% aren't much to write home about. But the pace at which Just Eat looks likely to keep growing earnings -- further double-digit-percentage rises of 11% and 31% are forecast for 2018 and 2019 respectively -- means I'm expecting dividends to continue swelling at a stratospheric rate.
What's more, despite the vast amounts the Footsie firm is having to shell out to keep improving its technologies (and potentially more M&A action down the line), the takeaway platform provider's stunning cash generation facilitates predictions of strong payout growth in the future. Net operating cash flow leapt 72% in 2017 to £167m.
Just Eat's latest trading update this month certainly convinced me of its exceptional investment case. Group orders popped 32% higher during January-March to total 51.6m, and this helped revenues sprint 49% higher to £177.4m.
And the business, helped by recent acquisition activity, is not only making strides in its core UK marketplace, where orders leapt 24% in quarter one, but also abroad. Orders by overseas customers jumped 46% in the last three-month period, and this international diversification gives earnings visibility that little extra boost.
Just Eat may carry a forward P/E ratio of 44.3 times, but I believe its exceptional growth prospects merit such a lofty rating.
Of course, picking the right shares and the strategy to be successful in the stock market isn't easy. But you can get ahead of the herd by reading the Motley Fool's FREE guide, "10 Steps To Making A Million In The Market".
The Motley Fool's experts show how a seven-figure-sum stock portfolio is within the reach of many ordinary investors in this straightforward step-by-step guide. There are no strings attached, simply click here for your free copy.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Associated British Foods and Just Eat. 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.