An income stock I would snap up in a heartbeat when I have the investable cash to do so is Computacenter (LSE: CCC). I also want to know if the stock could continue its impressive growth trajectory. Let’s take a look!
IT solutions provider
Computacenter is one of the leading providers of IT infrastructure in Europe. It helps organisations source and implement technology. This includes software, hardware, infrastructure integration, and managed services. It does this with the aims of helping businesses perform more efficiently and staying ahead of the tech curve.
Let’s start by taking a look at Computacenter’s share price. It’s up 35% over a 12-month period from 2,020p at this time last year to current levels of 2,738p as I write.
More growth and payouts to come?
As an income stock, Computacenter looks like an excellent option to me. A great track record of performance as well as rock-solid relationships with customers and technology businesses alike have helped the business grow and its shares and returns continue upwards.
Earlier this month, Computacenter released an interim update. In it, the firm said its on track to grow its earnings per share for the 19th year in a row.
A dividend yield of 2.5% is attractive enough, although it is worth remembering that dividends are never guaranteed. A price-to-earnings ratio of 15 makes the shares look decent value for money. I firmly believe sometimes its makes sense to pay a premium for a quality business.
Could the business continue this impressive growth trajectory though? I certainly think so. For example, Computacenter has a great footprint and some excellent customer relationships. The tech boom in recent years has helped the business. Plus, a potential artificial intelligence (AI) boom could help the business soar further too. Performance and payouts could be boosted. This is a key area for growth, in my opinion.
A risk that I must note is that IT spending can be dented by economic volatility. At present, soaring costs for businesses may mean that they review non-essential spending to upgrade or update IT infrastructure. However, it is worth noting that some form of IT spending, even to maintain existing tech, is necessary.
Another issue to bear in mind is that many firms like Computacenter benefited from the surge in people working from home in recent years, prompted by the pandemic. With this spending now a thing of the past, could performance and payouts be dented? I’ll keep checking performance updates but other avenues seem to be keeping the firm’s performance consistent.
I wish I’d invested earlier!
This is one of those instances where I wish I had a crystal ball. If I did, I would have purchased Computacenter shares a long time ago.
However, I still reckon there’s growth on the cards for the technology provider in the years to come. I especially expect the business to do even better than it is now once market volatility cools.
