Shares of TPG Telecom (ASX: TPM) have rocketed up over 90% in the last 12 months, compared to just a 17% return in the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO).
Organic subscriber growth is driving the company's sales and profits higher. For the most recent half year, revenue increased 10%, net profits grew 41% and earnings per share grew 39% over the previous corresponding period.
And there may still be further growth ahead, as more consumers demand generous internet packages and TPG is able to cross-sell mobile packages to this customer base as well. In reporting its half year results, the company raised total earnings guidance to between $285 million and $290 million, from between $263 million and $273 million.
Shares of TPG are now trading for around 23 times earnings, or on an EV to EBITDA basis of about 10. For investors seeking an organic growth story amid a sea of earnings downgrades and a slowing domestic economy, TPG stands out.
Yet there's another way to gain exposure to TPG Telecom. Longstanding and widely respected conglomerate Washington H. Soul Pattinson (ASX: SOL) holds around 27% of the telecom company in addition to its other holdings, from coal company New Hope (ASX: NHC) to pharmacy supplier Australian Pharmaceuticals Industries (ASX: API).
Thus interested investors could choose to invest directly in TPG — or opt for a more diversified business.
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Motley Fool contributor Catherine Baab-Muguira owns no shares in the companies mentioned in this article.