I often focus on buying dividend shares to boost my income. But growth stocks are also a great catalyst for building wealth.
I want to add more to my portfolio in the coming months. As a result, I’ve been scouring the UK for potential buys. These two stand out to me. I think they’re top-quality stocks that investors could consider buying today.
Ashtead Group
I recently added Ashtead Group (LSE: AHT) to my watchlist. The FTSE 100 constituent is a construction rental company. In the last 20 years, when the FTSE 100 has risen 82.9%, Ashtead stock’s up 24,884.9%! Wow!
While listed in the UK, the business generates 90% of its revenues from the US. Therefore, it has benefitted from an uptick in infrastructure spending in the last few years fuelled by the Biden administration’s $1trn bill aimed at rebuilding the country’s infrastructure.
That said, the firm’s suffered in recent months as growth across the pond slows. What’s more, delays in interest rate cuts will harm near-term earnings growth. It also has some debt on its balance sheet.
However, analysts are still pencilling in a 6% rise in profits for the upcoming year and 16% by 2026.
At 1.4%, its dividend yield is far from the highest out there. But in the last decade, it’s increased at an annual compound rate of over 21%. A track record like that is nothing to be sniffed at. What’s even better, I can pick up shares trading on around 15 times forward earnings. That looks like good value to me.
Games Workshop
Next up is FTSE 250 constituent Games Workshop (LSE: GAW). I already own shares in the miniature wargames giant, but I’m still incredibly keen to pick up some more.
Like Ashtead, it has far outperformed its wider index over the last two decades. Where the FTSE 250 is up 239.5% across that period, Games Workshop’s soared 1,412.9%.
I like the business due to its leading position in the industry. This has given it a moat. I’m also excited by the moves it has made to build out the licensing side of its business.
In December, it officially signed a deal with Amazon to turn its Warhammer 40,000 universe into films and a television series. That’ll provide the business with plenty of exposure to new customers.
The business has an incredibly strong balance sheet, with zero debt. And like Ashtead, there’s also the opportunity to make some passive income with Games Workshop shares. They yield 4.2%, higher than the FTSE 250 average (3.2%).
The stock does look on the expensive side, trading at 23.6 times earnings. Given the tough economic conditions, it’s also susceptible to a slowdown in spending. So some volatility should be expected with its share price.
But over the years it has proven its resilience. Even during the current cost-of-living crisis, it’s continued to grow its top line. For the first half of this year, revenue jumped 9.3% to £247.7m. Given its dominant position, I think it’s well-placed to keep performing strongly in the times ahead.
