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Recruitment business Pagegroup (LSE: PAGE) might not be the first company you think of when it comes to income and growth champions, but that’s exactly what the business is.

Over the past five years, this recruiter has reported average earnings per share growth of nearly 18% per annum and the dividend has surged from 10.5p to 22.3p (based on City estimates for 2019). 

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It doesn’t look as if growth is going to slow down any time soon. Today the company recorded an 11.4% increase in half-year operating profit as it benefits from rising demand for its services around the world. 

Global diversification

Page’s global diversification has been a huge positive for the business over the past five years. As hiring growth has slowed in its most challenging markets, the company has switched resources to faster-growing markets, such as the US.

Indeed, commenting on today’s results, CFO Kelvin Stagg said that while “fee earner headcount fell by 81,” or 1.3%, during the first six months of the financial year, headcount fell mainly in markets that were “more challenging, such as Greater China and the UK.” Meanwhile, Stagg reported that the company continues “to invest in markets where we saw the greatest growth, such as the US and India.” 

This is all part of Page’s long-term plan to increase its headcount to 10,000 employees (up from around 6,000 at present) and grow sales to £1bn with £250m of operating profit. For the first half of the year, group operating profit increased by 11.4% to £75.6m with a 12.5% increase in reported rates. 

What’s most impressive about this business is its cash generation. Page ended June with net cash on the balance sheet of just under £82m. Management is looking to return a chunk of this cash to investors.

Today it has announced a special dividend of 12.73p per share, on top of its regular distribution (which is also rising 4.9%) of 4.3p — the fifth consecutive year of special dividends.

The total distribution amounts to a cash return to shareholders of £54.9m, or 17p per share. For the full-year, analysts believe the company’s dividend will total 22.8p including a final year-end payout, which translates into a potential dividend yield of 5.2%. 

Double your money

If Page is not for you, then another stock I believe could be an excellent investment for your portfolio today is financial services group CYBG (LSE: CYBG)

After acquiring the Virgin Money brand last year, analysts are expecting CYBG to report a substantial profit of 24.4p per share for 2019 which, if achieved, would put the stock on a forward P/E of 6.2. Analysts also believe that the company has the potential to double its dividend payout for the year to 6.4p, giving a dividend yield of 4.3% at the current price. 

These metrics are extremely attractive, and it only gets better. As well as trading at a mid single-digit P/E ratio, shares in CYBG are also dealing at a price-to-tangible-book-value of less than 50%. This might be appropriate if the bank was losing money, but with analysts expecting a net profit of £342m for 2019, rising to £358m for 2020, it does not make any sense at all.

These metrics imply that the stock has the potential to double from current levels, and with a dividend yield of 4.3% on offer, investors will be paid to wait for the turnaround. 

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Rupert Hargreaves owns no share 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.

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