2 top growth shares for in-the-know investors

These two shares appear to offer reliable growth in an uncertain market.

| More on:

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.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The recent volatility in the FTSE 100 seems likely to continue over the medium term. Risks to global economic growth remain relatively high, with the threat of inflation and interest rate rises having the potential to hurt investor sentiment.

As such, many investors may wish to buy shares in companies that are able to offer relatively reliable growth prospects. They may not be the cheapest stocks around, but they could provide greater resilience and a more dependable outcome. With that in mind, here are two shares which could be worth a closer look.

Upbeat outlook

Reporting on Tuesday was specialist filtration and environmental technology company Porvair (LSE: PRV). The company has made a strong start to the 2018 financial year, achieving revenue growth of 9% in the four months to the end of March. Profitability is in line with previous expectations, while order books remain healthy, according to the update.

The acquisition of Rohaysys in December could act as a positive catalyst on the company’s future performance. Its buy brings robotic sample handling expertise, which enhances its bioscience sample preparation capabilities. Meanwhile, the acquisition of Keystone Filter in February could also have a positive impact on performance, with plans to move its operations to the Virginia plant on track.

With Porvair having delivered a rising bottom line in each of the last five years, it appears to offer a relatively resilient growth outlook. Further growth in its bottom line is forecast over the next two years and this could improve investor sentiment towards the stock. As such, now could be a good time to buy it, ahead of what may prove to be a volatile period for the FTSE 100.

Strong growth potential

Also offering investment potential within the chemicals industry is Johnson Matthey (LSE: JMAT). The company has a solid track record of growth, with its bottom line rising at an annualised rate of over 6% in the last five years. Additional growth is anticipated over the next two years, with the company’s bottom line due to increase by 9% this year and by a further 10% next year.

This improved rate of growth could help to justify a higher rating for the stock. Since it trades on a price-to-earnings growth (PEG) ratio of just 1.6, there seems to be significant capital growth potential ahead.

With Johnson Matthey’s dividend payout currently covered 2.7 times by profit, there seems to be significant scope for a rapid growth rate in dividends over the medium term. Therefore, while the stock currently has a dividend yield of just 2.4% at present, it could become a more enticing income play over the coming years.

This could add to its overall return and lead to a prosperous period for the company’s investors at a time when the wider index may experience a challenging period.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Peter Stephens owns shares of Johnson Matthey. The Motley Fool UK owns shares of Porvair. 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.

More on Investing Articles

Illustration of flames over a black background
Investing Articles

Here’s another top buy from the FTSE 250 I’m considering

Oliver Rodzianko considers this FTSE 250 company a stellar choice for his portfolio. It's on his growth watchlist; so let's…

Read more »

A young Asian woman holding up her index finger
Investing Articles

A “once in a lifetime” opportunity for Rolls-Royce shares?

One firm is hoping now is a “once in a lifetime” opportunity for UK nuclear companies. Our writer reveals whether…

Read more »

Young Black woman looking concerned while in front of her laptop
Investing Articles

The IAG share price is dirt cheap and profits are flying. So why am I worried?

After today's positive full-year results, I expected the International Consolidated Airlines Group (IAG) share price to be doing better than…

Read more »

Investing Articles

Is Tesla stock a steal below $200?

Tesla stock has fallen 19% so far in 2024. Currently hovering around $200, this Fool checks if now is the…

Read more »

Investing Articles

3 high-yield dividend stocks to consider for my passive income portfolio in 2024

I want to build a portfolio of dividend stocks that pay enough passive income to retire comfortably. Here are my…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Direct Line shares soar 25% on takeover bid!

Direct Line shares surged by a quarter on Wednesday, after receiving a takeover bid from a Belgian rival. But the…

Read more »

Investing Articles

Will it be too late to buy Nvidia stock in March?

NVIDIA stock is up more than 60% since the start of 2024. Our writer considers whether it might still be…

Read more »

Typical street lined with terraced houses and parked cars
Investing Articles

Why did Direct Line shares just soar 27%?

Direct Line shares have jumped more than a quarter in the course of today's trading session. Our writer explains why…

Read more »