Forget the FTSE 100! These 2 dividend growth stocks could help you retire rich

Royston Wild picks out two great dividend growth shares from outside the FTSE 100 (INDEXFTSE: UKX).

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In a recent article I took a look at two brilliant FTSE 100 shares that could help you to retire on a fortune.

Sure, their yields weren’t the biggest on the market, but the rate at which they’re likely to continue raising the payout still makes them great bets for income chasers.

There are plenty more dividend heroes to pick from among London-listed shares, of course. This article digs out another couple that look set to keep hiking payouts at an eye-popping rate, National Express Group (LSE: NEX) and Robert Walters (LSE: RWA).

Untroubled Walters

I’ve previously touched upon the exceptional revenues opportunities that Robert Walters’ pan-global presence is affording, a factor that was apparent in the recruiter’s latest set of financials.

The company sources almost three quarters of net fees from foreign shores, providing the sort of diversity essential for reliable earnings and thus dividend growth. And the AIM-quoted business continues to deliver brilliant growth across its territories, and particularly so in Europe where net fee income galloped 26% at constant currencies during the first half of 2018, to £48.9m.

What’s more, while conditions remain tough for many of its competitors in the UK, Robert Walters continues to go from strength to strength. In this territory, net fee income rose 9% to £52.6m between January and June, and expansion via a new office opened in Leeds underlines the company’s confidence in its home territory.

Reflecting its impressive performance, the City expects it to report earnings growth of 6% in 2018 and 9% next year, meaning that dividends are predicted to rise to 13.9p this year from 12.05p in 2017, and to 15.4p in 2019. Consequently yields stand at a handy (if unspectacular) 1.8% and 2% respectively.

Bus in stunning returns

Robert Walters deals on a forward P/E ratio of 17.1 times, sitting just above the widely-considered value territory of 15 times and below. While I believe the staffing giant demands a slightly-toppy rating, those seeking classic value may want to visit FTSE 250 share National Express instead.

Its long record of earnings growth is expected to continue with an 11% rise in 2018, meaning it deals on a prospective P/E ratio of 12.5 times. What’s more, with profits anticipated to keep rising beyond the near term — a 6% profits advance is estimated for 2019 — dividends should continue their upward movement, or at least according to the number crunchers.

A 14.9p per share reward is anticipated for 2018, up from 13.51p last year and yielding 3.7%. Next year a 16.1p payout is expected, yielding a fatty 4%. And if latest trading details are anything to go by, the stage would appear set for further chunky dividend expansion.

The coach operator punched record pre-tax profits for the January-June period of £80.1m, up 24% year-on-year. North America once again proved to be the engine room for National  Express, where revenue growth came within a whisker of hitting double-digit percentages. And I am confident its diversification into exciting growth territories, helped by ongoing acquisition activity, should keep group profits chugging higher long into the future.

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.

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.

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