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2 growth stocks I’d hold for the next decade

What I like about Victrex (LSE: VCT) is its record of good trading leading to steady earnings and dividend increases. The company is doing well, and today’s full-year results continue the story with constant currency revenue lifting 3% compared to a year ago and earnings per share shooting up 20%.

The directors expressed their confidence in the outlook by pushing up the regular dividend 15% and by paying a special dividend of 68p. Together, these payments put this year’s dividend haul for investors around 160% higher than last year – excellent work!

Strong pipeline to drive growth

The company provides high performance polymer solutions for the automotive, aerospace, energy, manufacturing, engineering, electronics and medical markets. The year saw core business growth “fully offsetting” what turned out to be asignificant reduction” in consumer electronics volumes. But the directors were expecting consumer electronics business to retreat, and the fact that revenue and earnings grew anyway highlights the strength of the firm’s diversified business model, I reckon.

Chief executive Jakob Sigurdsson tells us that a strong pipeline of new products will drive the firm’s ambition to generate 10% to 20% of additional sales over the medium term. He reckons that the directors’ strategy regarding polymer and parts “is already differentiating Victrex in a competitive market,” and that the firm is also “closing in” on a major OEM agreement in its dental division.

There’s a lot happening to keep growth on the agenda. The year saw one bolt-on acquisition, the establishment of a joint venture to develop differentiated aerospace products, and the opening of £10m polymer innovation centre to support prototyping and new polymer grades. The company plans to continue to focus on partnerships, alliances and acquisition opportunities, Mr Sigurdsson says, “to help accelerate our growth programmes.”

An appealing sector

Meanwhile, Consort Medical (LSE: CSRT) delivered its interim results today showing another steady performance. Constant currency revenue came in 4.2% higher than a year ago and adjusted basic earnings per share pushed up 2.6%. The directors slapped 5% on the interim dividend.

The firm operates in an appealing sector describing itself as a one-stop developer and manufacturer of drugs and premium drug delivery devices. I don’t think drugs will ever go out of fashion, so constant demand for the service seems assured as long as Consort remains competitive. A “strong” development pipeline looks set to keep the firm moving forward with organic growth, although chief executive Jon Glenn reckons that if an acquisition opportunity looks capable of providing the firm access to new geographic markets and complementary technologies, the directors will consider it.

A good return with more to come

More of the same from this reliable-looking company would be a good thing. Over five years the dividend has increased around 25% and the share price is up around 65%. Investors holding the shares have been rewarded for their patience and I reckon similar patience could pay off going forward too.

Although operating in different sectors, both Consort Medical and Victrex have long records of good trading and earnings growth, which look set to continue. Valuations are full and fair, but playing the long game and holding investments for the next decade in these two could pay off if the world’s economies hold up.

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Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has recommended Victrex. 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.