The Motley Fool

One growth stock I’d buy and hold for the next decade

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

I have long been a big fan of Acal (LSE: ACL) and, although the market has remained unmoved in Tuesday business, the company’s latest trading statement today has firmed up my bullish view.

The electronics builder and distributor — which from today will be known as discoverIE Group — announced that revenues detonated 21% during the six months to September, to £190.2m, a result that pushed underlying pre-tax profit to £10.4m, up 42%.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

And discoverIE, boosted by a solid order book, is confident that it can continue making progress in the near term and beyond. Chief executive Nick Jefferies commented: “The second half has started well and we are on track to deliver full-year performance in line with our expectations, supported by a record order book of £111m.

“Together with an increase in new project design wins of over 30%, with an estimated lifetime sales value of over £90m, we are well positioned for continued growth.”

Meanwhile, discoverIE’s multi-year programme to boost margins by expanding its Design and Manufacturing arm is also delivering the goods. The company saw its underlying operating margin increased by 60 basis points, to 6.2%, during the first half.

Brilliant forecasts

It should come as little shock, therefore, that City analysts expect discoverIE to continue growing earnings at a terrific rate.

In the year to March 2018 a 10% bottom-line improvement is anticipated. And the good news does not end here, a further 8% advance predicted for the following year.

These current forecasts make the small-cap a brilliant value pick too. On top of carrying a forward P/E ratio of 14.4 times, it also boasts a corresponding PEG multiple of just 1.4.

What’s more, today’s release underlined the fact that discoverIE is a growth dividend share that investors should take notice of — the business hiked the interim dividend 8% year-on-year to 2.65p per share on the back of its strong results.

In fiscal 2018 the total dividend is expected to increase to 9.3p per share from 8.5p previously, City analysts are predicting, meaning that discoverIE sports a chunky 2.9% yield. And the yield steps to 3.1% for next year thanks to an anticipated 9.8p reward.

Another growth hero

I also believe that 4Imprint Group  (LSE: FOUR) is a share that growth and dividend hunters should seriously consider today.

Supported by an anticipated 9% bottom-line advance in 2017, the company is expected to lift the dividend from 41.82p per share last year to 44.1 cents, resulting in a handy 2.4% yield.

And with earnings anticipated to improve 10% next year, 4Imprint is expected to raise the dividend again, to 48.5 cents, nudging the yield to 2.7%.

Thanks to its broad exposure to North America — a region that produces 97% of group profits — the promotional products manufacturer can look forward to strong and sustained sales growth, in my opinion. That’s even if toughening trading conditions in the UK weigh on its performance at home looking ahead. It said that it had achieved “further encouraging organic revenue growth in both its North American and UK-based operations” in the four months to the beginning of November.

Given its proven knack of attracting new customers across the globe, not to mention its record of keeping its existing clients happy, I believe 4Imprint is a knockout growth share worthy of a toppy forward P/E rating of 22.3 times.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Royston Wild 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.