2 growth and income stocks I'd buy right now
I think FTSE 250 company Computacenter(LSE: CCC) has a good chance of being a decent investment over the coming years if you are looking for a growing dividend and a rising share price.
The firm provides information technology infrastructure services in the UK, Germany, France and Belgium and business has been stable and growing. I first noticed Computacenter around 2011 and saw that it was producing consistent annual gains in earnings and a steady increase in revenues most years. Over the last four years alone the dividend has gone up 45% and the share price has risen 60%.
Ahead of expectations again
In today's pre-close trading update for the trading year to 31 December, the directors said they anticipate that adjusted pre-tax results for the year will be ahead of their most-recent expectations. They pointed out that they upgraded their expectations "a number of times" throughout 2017, which means it's even more impressive that the firm's performance is beating predictions now.
Revenue in constant currency for the year increased 12% compared to the previous year with all trading regions and all of the firm's sectors rising. There's strong evidence that Computacenter is generating decent profits from this turnover with the net cash figure of just over £191m, which is more than 30% higher than a year ago. However, because extended credit terms with one of the company's major suppliers will end and revert to standard credit terms, the net cash position will shrink by just over £27m going forward.
The directors expect the positive momentum to continue during 2018 but said that a number of one-off costs and investments will likely "hold back the enhancement of profitability." However, 2019 looks set to be a good year for advances in earnings. I would see any weakness in the share price or any period of sideways movement that may result from this news as a good opportunity to invest in Computacenter.
Hitting the spot with customers
If you are looking for something a little more adventurous, you may be interested in today's trading update from Revolution Bars Group(LSE: RBG), which resides in the FTSE Fledgling index and has a market capitalisation of just over £86m. The big attraction of smaller firms is that the shares can move quickly and that little companies can grow into larger companies if things go well. Balancing that attraction is the higher risk that tends to come with smaller firms.
Revolution Bars operates 72 premium bars in the UK, branded Revolution and Revolucion de Cuba. For the 26 weeks to 30 December, which includes the important Christmas and New Year trading period, sales were almost 11% higher and like-for-like growth in revenue over the key Christmas trading period came in almost 6% higher than a year ago.
The directors said this is the fifth consecutive year that the firm has enjoyed record sales in the festive period, which I reckon suggests the firm's offering clicks with customers. Meanwhile, it has a good record of raising its dividend every year and I think it would be well worth your time researching the investment opportunity.
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Kevin Godbold 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.