When it comes to buying shares, I like to buy a combination of income and growth stocks. For me, dividends are just as important as capital appreciation.
So here are my three best shares to buy now for growth.
Next (LSE: NXT) is a retailer that has fared well during pandemic and a stock that I’d buy. Its diverse product offering as well as online sales have help the company during the coronavirus crisis. What I like about about the firm is that its e-commerce provides it with a long-term scalable solution especially if there’s another lockdown.
It’s reassuring when a company announces that it will be paying a special dividend. And that’s exactly what Next did last month in its trading update.
It’s going to pay shareholders a special dividend of 110p in September. What’s more, it expects to distribute surplus cash generated as a second dividend at the end of January 2022.
There’s no guarantee that this will happen. And it depends on whether Next can still deliver strong performance. The shares are also expensive and trade on a price-to-earnings (P/E) ratio of 36 times.
The data firm
Experian (LSE: EXPN) is another of my best shares to buy now for growth. It’s fast becoming a data driven firm. And let me be frank, data is like gold nowadays. Now that economies and companies are recovering from the pandemic, this should boost the need for Experian’s services.
What I like about this company is that in its recent trading update, it deliver strong growth. Also it raised forward guidance. This is always a sign to me that a firm is doing well if it raises forecasts.
It now expects full-year revenue growth of 13%-15%, of which 9%-11% is expected to be organic. The fact that a large portion of this is organic means that Experian is doing something right and there’s a high demand for its offering.
What it also means is that if sales have increased, it’s likely that profits will rise too. Of course, that’s just me speculating but I’ll be watching this space.
The stock isn’t cheap. It trades on a P/E of 42 times, which may put some investors off.
The investment trust
Scottish Mortgage (LSE: SMT) is a investment trust that I’ve been bullish on for some time. The main reason for this is due to its long-term track record. There’s one thing saying something and it’s another doing it. And SMT has proven that it not only can talk-the-talk but it can walk-the-walk too.
I like that it has a portfolio of both public and private tech companies. And it has successfully identified many unlisted firms that have gone on to list on the stock market. This clearly hasn’t been achieved by fluke but by the investment expertise of the fund managers.
The trust is currently trading at almost 3% discount to its net asset value or NAV. So I’d make the most of this opportunity and snap up some shares.
The portfolio has a heavy tech bias. Earlier this year there was a sell-off in the sector and hence SMT shares were hit. This could happen again.
But I reckon SMT is a great way to get exposure to a global portfolio of public and private companies. Hence I’d buy now.
Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028 — more 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.
Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Next. The Motley Fool UK has recommended Experian. 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.