A FTSE 100 dividend growth stock I’d buy and hold all the way through to 2030

The Motley Fool
Two hands holding champagne glasses toasting each other with Paris in the background
Two hands holding champagne glasses toasting each other with Paris in the background

As a holder of several FTSE 100 stocks myself, I have to admit that I’m far from concerned by the share market sell-off that has continued into another week.

Share market investment has been proven time and again to be one of the most effective ways of putting your money to work over the long-term. And I have no intention of selling any of my blue-chip holdings for at least another decade.

A Footsie company that I haven’t bought into just yet is NMC Health (LSE: NMC). But given the strong probability that it should continue to thrive through the 2020s and beyond, I am seriously tempted to splash the cash on this healthcare star.

Forecasts bumped higher

Last time I covered NMC I mentioned the exceptional revenues possibilities created by its buzzing expansion drive across the United Arab Emirates, a strategy which is supplemented by clever acquisition action. And just this week the fruits of its programme were once again laid bare.

The firm said that it was revising up its forecasts for 2018 following a strong second half, and it now anticipates that revenues will rise 24% year-on-year, up 20 basis points from its prior projections. Consequently the hospital operator hiked its EBITDA guidance too, to $480m from $465m previously.

And this strong performance is expected to continue into next year, NMC predicting revenues rises of between 22% and 24% and EBITDA improvement in the range of 18% to 20%. The firm said that “2019 guidance will also point towards continuation of strong organic growth on the back of sustained ramp-up at key facilities, integration and expansion of acquired entities as well as strong operational performance.”

With the company pledging to continue opening new greenfield facilities and expanding its existing infrastructure next year too, there’s little reason to expect profits growth in the lucrative markets of the Middle East from continuing to charge beyond the medium term.

In the meantime, NMC still has its pedal to the metal and this week announced it had signed off on a $1.6bn joint venture with Saudi Arabia’s state-run Hassana Investment Company to create a network of medical facilities in the kingdom with up to 3,000 beds.

Dividends detonating

NMC has been minded to supercharge the annual dividend in recent years as earnings have swelled by double-digit percentages. So no-one should be surprised that, with City analysts expecting profits to rise an extra 35% this year and 31% in 2019, payouts are anticipated to keep detonating.

Last year’s 13p per share reward is projected to rise to 19.4p in 2018 and again to 25.7p in 2019. These figures yield 0.6% and 0.8% respectively, figures which are admittedly not that impressive. But the pace at which the business could continue to raise dividends over the next decade as its investments pay off should encourage income seekers to take a look.

The current share price weakness at the business leaves it dealing on a sub-1 PEG reading of 0.8. This, in my opinion, reinforces its appeal as one of the most appetising FTSE 100 dividend growth stocks out there.

You Really Could Make A Million

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. Simply click here for your free copy.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended NMC Health. 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.