Which dividend dynamo should you buy after today's news?

PayPoint
PayPoint

Shares in pub giant Marston's(LSE: MARS) trended modestly lower in Thursday business as the market failed to toast the firm's bubbly preliminaries.

///>

Marston's advised that underlying revenues rose 7% in the year to October 1, to £905.8m, a result that fired underlying pre-tax profit to £98m, also a 7% year-on-year improvement.

Investor appetite for the stock has dipped in the wake of June's Brexit referendum. But Marston's has defied the doom and gloom many predicted despite the country having to face up to an uncertain economic future.

Indeed, chief executive Ralph Findlay commented that "trading has been solid in the first few weeks of the new financial year and we have seen no discernible change to the trends experienced in 2016."

Marston's has its ongoing restructuring plan to thank for its hot bottom-line growth, the brewer advising that average profit per pub leapt 8% in fiscal 2016, up 50% from 2012. And the board plans to open another 20 new pub-restaurants in the current period alone, giving its earnings outlook a further shot in the arm.

These strong results prompted Marston's to lift the full-year dividend to 7.3p per share, up 4.4% from the 7p rewarded afforded in 2015.

And the City doesn't expect this uptrend to end any time soon -- a payout of 7.6p per share is forecast for the year to September 2017, underpinned by an expected 3% earnings bounce. This figure yields a smashing 5.6% and is covered 1.9 times by predicted earnings.

Tech star

But Marston's isn't the big yielder making news in Thursday trade. Indeed, payment systems specialist PayPoint (LSE: PAY) advised the market that although revenues dipped 1.1% during April-September to £101.7m, adjusted operating profit climbed 15.6% in the period, to £24.7m.

While the top line may have lagged during the half year, PayPoint is confident that its transformation package should drive revenues higher looking ahead. Chief executive Dominic Taylor commented that "this year is proving to be pivotal as we change the focus of the organisation towards our retailers."

PayPoint successfully rolled out its Paypoint One terminal in September following successful trials, and the company is looking to have 4,000 of the machines up and running by the end of the fiscal year. Moreover, the payments giant also has high hopes for its EPOS technology on the high street.

The number crunchers certainly buy into PayPoint's growth story, and earnings growth of 8% is forecast for the year to March 2017. Forecasts consequently point to increasingly-chunky dividends coming down the line with a 55.1p per share reward estimated for the current period, up from 42.4p in 2016 and yielding 5.5%.

For those seeking more security, Marston's may be the preferable dividend pick however, its dividend cover being better than a reading of 1.1 times over at PayPoint.

Having said that, I reckon both companies' hot growth prospects should deliver market-beating dividends long into the future.

These tips could make you a fortune

But whether or not you share my bullish take on PayPoint and Marston's, I strongly recommend you check out this special Fool report that could help you become a stock market genius.

Our 10 Steps To Making A Million In The Market report reveals a flurry of wise investment themes and strategies to help investors avoid heavy losses and make a fortune from their investments.

Click here to enjoy this exclusive wealth report. It's 100% free and comes with no obligation.

Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of PayPoint. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Advertisement