One 6% FTSE 100 dividend stock and one growth stock I'd buy and hold right now

When I last wrote about cosmetics supplier Warpaint London (LSE: W7L) in September, at the time of its interim results, the shares had plunged around 14% on the day and I said the financial figures were "a little disappointing." At the time I was worried about cash inflow, which was well down on the figure the year before.

Strong trading

I'm not worried about today's full-year results though. Adjusted revenue came in 15.6% higher than the year before at just over £31m and adjusted earnings per share rose 8%. The all-important cash-flow figure was 73% up on last year's, with the firm generating £5.2m from operating activities.

In November, Warpaint paid £18.2m to acquire Retra Holdings Ltd, a UK colour cosmetics business with a "significant focus on the gifting market." Meanwhile, the core W7 brand achieved sales in the UK over than 17% higher than the year before and almost 17% higher internationally. Chairman Clive Garston said, "we continue to focus heavily on building brand awareness, both in the UK and in overseas markets." Judging by the sales figures, the strategy is working.

City analysts following the firm expect robust earnings growth with an increase of 28% in 2018 and 23% in 2019. The current valuation looks undemanding for such growth. At a share price of 192p, the forward price-to-earnings (P/E) ratio for 2019 sits around 12 and the forward dividend yield just above 3.4%. Those predicted earnings should cover the payment around two-and-a-half times.

Good value and a positive outlook

The outlook is positive and there's every chance that the firm will move forward with its national and international expansion in the years to come. The only small cloud I can see is the company's vulnerability to cyclical influences in the wider macro-economy. That said, many cyclical firms are flying right now, so I'd seriously consider adding Warpaint London to my portfolio alongside a large dividend payer such as FTSE 100 firm Legal & General Group (LSE: LGEN).

Good trading in the firm's life assurance, long-term savings, investment management and general insurance business has enabled the directors to push up the dividend by 65% or so over the last four years and that progress looks set to continue. Back in March, in the full-year results report, chief executive Nigel Wilson said: "We remain confident that our unique business model, strong management team, collaborative culture, and strategic focus can deliver further growth in 2018 and beyond."

Yet even with such strong trading and a positive outlook, it's hard to make a case for the stock being expensive. The recent share price of 277p throws out a forward P/E rating for 2019 just below 10 and the forward dividend yield is almost 6.3%. Forward earnings should cover the payment around 1.6 times.

Legal & General is a big holding in well-known fund manager Neil Woodford's equity income fund and the stock seems to be part of his bullish approach to cyclical outfits with big exposures to the UK market. I think the firm would sit well in a portfolio alongside Warpaint London, and both firms could go on to deliver useful total investment returns in the years to come.

Buy-And-Hold Investing

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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.

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