Two high-growth dividend stocks I'm considering today

Global professional services provider FDM Group(LSE: FDM) has a record of generating outstanding returns for investors, and it looks as if this trend is set to continue. Indeed, over the past three years, earnings per share have doubled and during the period shares in the company have added nearly 200% excluding dividends.

Today FDM issued a trading update stating "group's performance for the year to 31st December 2017 will be ahead of its previous expectations." Revenues for the period are now projected to expand 23% to £233m thanks to an increase in the number of "Mounties" placed on client sites of 17% to 3,170.

FDM's 'Mounties' are its own permanent IT and business consultants, which it trains and then sends out to work with businesses.

Global growth

FDM saw double-digit demand for its services all over the world during 2017 with the most substantial increase in Mounties deployed being in the Asia Pacific region. Here, the number of consultants placed rose 30% year-on-year, although, with only 306 Mounties in Asia, there's still plenty of room for the group to grow. For comparison, at the end of the year, the firm had 1,744 consultants deployed in the UK.

Building its presence in Asia seems to be one of the critical objectives for FDM in 2018. Commenting on today's trading update, CEO Rod Flavell declared "2018 will see the Group continue to invest to deliver long-term, sustainable growth, increasing capacity in existing territories while also building its presence in some of its more nascent territories." This expansion should underpin further earnings and dividend growth.

City analysts are already expecting big things from the company. Earnings per share are expected to grow 21% for 2017 and then 10% for 2018. This earnings growth is expected to underpin an astonishing 24% increase in the group's dividend payout to investors over the next two years. Even though FDM only yields 2.8% at present, its record of dividend growth is enough to qualify it as a dividend champion as over the past four years the payout has grown 200%. With no debt and earnings expanding rapidly, it looks as if this growth is set to continue.

Zero to hero in five years

Another dividend champion you should consider for your portfolio is Howden Joinery(LSE: HWDN). A kitchen and building supplier that only sells to the trade, Howden has an exciting business model.

Each of the company's depots is run as an individual fiefdom where depot managers receive a share of the depot profit, which can be a life-changing sum. Using this model, the firm has been able to grow steadily over the past six years without succumbing to over-expansion or price wars with competitors. Since 2014, earnings per share have increased at a compound annual rate of 17.5%.

Over the same period, the company's dividend payout has exploded from 0.5p per share to an estimated 11.3p for 2017. As the payout is covered just under three times by earnings, and as there's approximately £225m of cash on Howden's balance sheet, it looks as if this distribution is secure for the foreseeable future.

Unfortunately, the stock only yields 2.7%, which is around 1% below the FTSE 100 average. Nevertheless, the lower yield is worth it for the security of the payout. What's more, as Howden continues to grow earnings, the payout should rise further. According to my figures, 10% per annum payout growth implies a yield of 4.1% by 2023.

Investing in income growth

The best dividend growth stocks are those companies that have a long runway for earnings growth in front of them, that's why I like Howden's and FDM. Another future dividend champion is revealed in this free report from the Motley Fool.

This growth stock has already achieved an impressive record of earnings investors, and our analysts believe that it's only just getting started. As earnings have expanded, the dividend payout has doubled over the past five years.

Our analysts are so excited about the firm's outlook that they've labelled it one of the market's top small-caps!

Click here to download the free, no obligation report today on this unrivalled opportuntiy today.

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Howden Joinery Group. 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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