Vocus Communications Limited rings in record results: Is it too late to buy?

What: Vocus Communications Limited (ASX: VOC) shares rose 22 cents or 4.1% early in today’s session after the telecommunications group delivered yet another record result for its year ending 30 June 2014. The company managed to grow underlying net profit after tax (NPAT) by 53% to $13.6 million which was bolstered by a 38% rise in revenue to $92.3 million.

So What: Pleasingly, Vocus’ growth primarily came organically over the course of FY14. Its Fibre & Ethernet division performed particularly strongly with revenue from the segment up 87%, while its Internet division also grew revenue by 39%. Although the yield recognised in its Internet division has declined considerably over the last five years, it has been more than offset by traffic growth which rose a further 77% in FY14.

Data centre revenue also rose to $18.6 million (up from $15.6 million in FY13) as a result of its January 2013 acquisition of Newcastle-based Ipera Communications for $9.8 million. This division should receive yet another boost over FY15 thanks to its more recent acquisition of the Bentley data centre in Perth from ASX-listed IT solutions provider ASG Group Limited (ASX: ASZ).

Now What: Vocus’ shares have delivered an incredible 815% gain for shareholders since mid-2010, and it looks as though there is still plenty of room left for it to grow. For instance, it has recently entered into an agreement to acquire New Zealand’s FX Networks in an attempt to replicate its Australian growth in NZ which should have a significant impact on earnings in the coming years.

However, Vocus is lacking one thing that every Aussie investor cherishes – a juicy dividend yield. Although its strong results allowed it to increase its total dividend to 1.8 cents fully franked, that only gives the company a yield of 0.3%!

As such, there is another ASX stock with strong growth prospects I believe investors could love even more than Vocus. In fact, it recently increased its dividend and now yields 5.1% grossed up! To discover the name and code of this stock, simply click here now and you'll receive our valuable investing report titled "The Motley Fool's Top Stock for 2014." It's FREE!

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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