Grainger (LSE: GRI) stepped modestly higher in Wednesday business following the release of pre-close trading details, the FTSE 250 stock last up 1% on the day.
It declared: “We have delivered a strong trading performance in the second half of the year, with good results from sales and tightly controlled operational and finance costs.” As a result, it predicts adjusted earnings in the 12 months to September to rise to approximately £70m, from £53.1m a year ago.
Grainger noted that sales of vacant properties were around 2% ahead of the September 2016 year-end vacant possession value, and during the 11 months to August, like-for-like rental growth across its portfolio registered at 3.7%.
Meanwhile, its private rented portfolio has reported growth of 3.2%, while the firm has witnessed annualised rental growth of 4.4% in its regulated tenancy portfolio.
Safe as houses
Grainger has a pretty erratic earnings history, certainly in recent times, and City analysts aren’t exactly falling over themselves to declare a recent upturn in the company’s bottom line – a 35% decline is pencilled in for fiscal 2017.
Still, this isn’t expected to prove an obstacle to the residential landlord keeping its progressive dividend policy on track. Grainger has hiked dividends at a compound annual growth rate of 18.6% over the past five years, and is expected to lift the reward to 4.83p per share in the outgoing period, from 4.5p in 2016.
And supported by an expected 5% earnings rise in the forthcoming year, the company is anticipated to introduce another meaty dividend rise, to 5.73p. However, yields over at Grainger are not likely to get hearts racing right now. These clock in at 1.9% and 2.2% for 2017 and 2018, respectively.
However, while Grainger’s operations – like its dividend yields – may not be the most exciting, the company provides the sort of stability that all income chasers crave. And with its strategic shift towards the private rented sector impressing so far, and its cost-cutting programme also clicking through the gears (it is on course to hit its £27.5m overhead reduction goal for the outgoing year), I believe the FTSE 250 giant remains a hot investment destination.
I also reckon Charles Taylor (LSE: CTR) is a great selection for both growth and dividend chasers.
You see, with the professional services provider increasingly spreading its tentacles far and wide, revenues at the business continue to shoot skywards. Between January and June, these rose 36.1% year-on-year to £100.7m. Charles Taylor also remains busy on the acquisition trail to keep business rolling in; just this month it sucked up compensation insurance claims administrator Metro Risk Management of the US for a fee that could rise to £1.8m.
Although Charles Taylor is predicted to endure an 8% earnings dip in 2017, the small cap is expected to snap back with a 6% rise in 2018. And the company’s sunny long-term profits outlook is expected to keep driving dividends skywards over the next couple of years at least – the 10.5p per share reward of 2016 is predicted to pound to 11p this year, and to rise again to 11.7p next year.
As a result, yields clock in at a formidable 4% and 4.3% for this year and next.
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.