2 small-cap growth stocks that could make you fabulously rich

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Games Workshop

I've always been wary of the familiar tale of popular growth stocks in their early days. You know, when everyone jumps aboard and pushes up the shares, and then overpriced ones collapse later when cold financial reality sets in.

It looks like the first part of that has already happened to Veltyco Group(LSE: VLTY), whose shares have quadrupled in the past 12 months -- but are they expensive now?

Veltyco, which is in the business of marketing for the online gaming, lottery and binary option businesses, only came to market in June 2016.

At the time, it was already profitable -- but only just, with a mere £60,000 pre-tax profit reported by December 2016. So it's understandable if investors were wary at that early stage.

Cracking results

But first-half results were seriously impressive, after revenues tripled to EUR6.4m and beat the entire previous year, and EBITDA five-bagged to EUR3.8m (which was 80% up on the whole of 2016).

At this stage I think we're looking at a potential cash cow, with the company reporting interim net cash of EUR1.3m and telling us it's considering paying a maiden dividend in 2018, depending on how 2017 full-year results turn out.

And that share price... it picked up 10% in morning trading Wednesday after Veltyco revealed a new partnership with video game competition site Esports.com, and said it has taken a small stake in the company too.

With the shares at 94p, as I write, what about valuation?

Even after such a meteoric rise, full-year forecasts are so strong we're still only looking at a forward P/E of around 12, dropping to 11.6 on 2018 expectations.

I can only see further growth here.

Finally got it right?

After years of volatility and no overall price gain in nearly 20 years, shares in Games Workshop Group(LSE: GAW) have taken off like a rocket over the last year -- they've more than trebled in value in 12 months to 2,030p.

After a gradual climb, June's trading update ahead of full-year results inspired a spike, and since then it's just been up and up. In the end, the year to May 2017 saw a 127% rise in pre-tax profit coupled with an 84% hike in operating cash generation.

Earnings per share more than doubled to 95.1p, and the dividend was lifted by 85% to 74p per share.

Chief executive Kevin Rountree described the year as a "fun and exciting" one, suggesting that "prospects for the business are good" -- and at least the second part of that seems modest.

Strong margins

A sales boost from the fall in sterling has certainly helped, as most of the company's sales are overseas, but I see another long-term cash cow here too. Games Workshop's margins are high, with a very impressive gross margin of 72.4% for 2017, and it really doesn't require a lot of capital expenditure to keep it going.

And though it's taken a long time for the share price to get moving, the company has been paying out handsome dividends for years.

This year is already off to a good start, with Q1 sales and profits "well above the same period in the prior year" and the firm telling us we should be seeing expectations-busting results this year.

Forecast dividends of 100p would provide a yield of 4.9% with the shares on a P/E of 15, and that looks good to me.

A million by retirement

Shares like these two tucked away in your SIPP give you the hope of enjoying growth and dividends for years to come after you retire, and there are more top shares out there that can do the same.

The Motley Fool's experts have scoured the FTSE 100 to bring you their very best picks, and they've settled on five top choices which they reckon are capable of bringing in the retirement cash.

You can read their analysis in this totally FREE report. All you need to to is CLICK HERE and your copy will be sent direct to your email inbox.

Alan Oscroft 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.