3 unknown but amazing dividend growth stocks I’d buy now and hold for a decade
In a recent article I ran the rule over three exceptional FTSE 100 dividend shares that I’d buy today and hang on to for the next 10 years.
For this piece I’ve picked out a cluster of lesser-known shares whose long-term outlook remains just as compelling. Take a look, they could make you a fortune!
Insurance services star
Small-cap Charles Taylor’s (LSE: CTR) latest financials released this month may have prompted fresh selling, but I believe that market-makers may have been a bit hasty in their actions.
Sure, news of a 95% pre-tax profit drop from January to June was a shocker, but this was a reflection of one-off costs including charges relating to acquisitions and office moves. I’m more interested in the announcement that revenues blasted 21% higher to £123.4m in the first half, a result that shoved adjusted profit before tax 10% higher to £8.5m.
The result was encouraging enough to prompt Charles Taylor, which provides professional services to the insurance industry, to raise the interim dividend to 3.48p per share. City analysts think that the full-year dividend will rise to 11.7p per share, a figure that yields a fatty 4.7%. With the business strengthening through M&A to bolster its global footprint, I am confident that dividends should keep on barging higher along with profits.
Build a fortune
Building materials giant Costain Group (LSE: COST) is also a business that has been lifting dividends at quite a pace in recent weeks.
The infrastructure specialist raised the half-time dividend by 8% on the back of August’s sunny financial update, to 5.15p per share. Revenues ducked 12% between January and June to £772.9m on the back of “a lower level of large capital project activity” at its Infrastructure division. But this could not stop underlying pre-tax profit rising 17% to £21.4m to reflect the work Costain is undertaking to boost margins.
Investors need not worry about the sales drop-off in the first half either because its order book remains strong. According to the small-cap it boasted a “higher quality order book” of £3.7bn as of June, nine-tenths of which related to repeat business.
City brokers believe Costain will have the strength to raise the dividend to 15.5p per share this year. And this results in an inflation-mashing 3.7% yield.
A clear view
Tyman (LSE: TYMN) has proved to be a dream for investors seeking dividend growth in recent years, the manufacturer of door and window parts having almost doubled the annual payment during the past half a decade.
I’m confident that its major exposure to the strong trading territories of North America and Europe, allied to its growing footprint in the emerging markets of Asia and Africa should keep both profits and dividends growing at quite a rate as well.
And City brokers share my optimistic take, an anticipated 12p per share reward yielding a not-too-shabby 3.4%. With Tyman also having the financial strength to embark on additional earnings-boosting acquisitions I am confident that the small-cap should also prove a lucrative investment in the years to come. Just this month its SchlegelGiesse arm splashed out on Italian door-and-window-handles-and-accessories manufacturer Reguitti, along with its sister brands Tropex Design and Jatec, to boost its product portfolio still further.
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Royston Wild has no position in any of the 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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