Why Dixons Carphone PLC Is A Buy For Me

At the time of the Credit Crunch, there was story after story about the demise of the High Street. Company after company, from Woolworths to HMV and Zavvi, went bust. Thousands of jobs were lost, much of the High Street was derelict. Anyone who was unfortunate enough to have invested in High Street companies will have seen their investments trashed.

Fast forward to today and, dare I say it, there are signs the High Street is reviving and reinventing itself. Alongside the stalwarts like Next and Marks & Spencer, and new entrants such as SuperGroup and Burberry, there has always been a niche for companies selling electronic goods.

The High Street is now as cheap as the Internet

dixonscarphone1I used to buy all my electronic goods from Amazon. But I noticed that I am buying more products from the High Street. I bought my laptop and computer from Dixons, the company behind the Currys & PC World brands. I bought my mobile contracts from Carphone Warehouse.

Like many other people, I’m realising that the cheapest prices are not necessarily available only on the internet. The High Street now offers some of the cheapest deals, plus it gives you the opportunity to see, touch and feel.

With hindsight, the Internet never actually meant the demise of the High Street. Instead, it challenged the High Street to reinvent itself, and provide a better, more competitive product offer and a more enjoyable customer experience.

Dixons and Carphone Warehouse emerged as winners from the great shakeout of recent years. There was a strong logic to their recent merger.

This company has turned itself around

Rather like Next in clothing and furniture retail, the two companies that merged to form Dixons Carphone (LSE: DC.) have built a seamless and intuitive experience from websites and apps to the High Street. From being a company in seemingly irreversible decline, Dixons isn now riding the wave of the tech revolution, and it set to increase turnover and profits year-on-year.

Idixonscarphone2n 2013 I tipped Dixons as a turnaround play. Today I see the newly-merged company as play on continued growth and recovery. And despite the recent growth, and the rise in the share price, the fundamentals are still not expensive. The 2015 P/E ratio is 16.3, falling to 13.8, with a dividend yield of 2%.

How much further could this company grow? Well, tech is one of the fastest growing areas in the global economy. In the future we are likely to be surrounded by a patina of tech, whether we are in the office, at home, on holiday or out jogging. If Dixons Carphone can establish itself as the clear retail leader in this world of ubiquitous tech, there is scope for a lot more growth yet.

Where we think the smart money is going now

After some astonishing returns in 2013, this year has so far been a much bumpier ride for investors. Banks have taken a hit, as have growth stocks. Overvalued companies such as ASOS and AO World have taken a tumble.

So where should you invest your money this year? Well, our investing experts at the Fool have written a free guide about where we think the smart money is headed.

Want to learn more? Well, just click here to get your free, no obligation copy!

Prabhat Sakya has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.