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Dicker Data: The ASX’s hottest growth rocket?

The Dicker Data Ltd (ASX: DDR) share price printed a new record high of $4.45 today as the dividend machine continues to deliver investors some strong capital growth as well.

Of course it didn’t literally print a new high, but it’s the company’s distribution of common office equipment such as printers, computers, hard drives and keyboards on behalf of global giants like Hewlett Packard and Microsoft that has been its bread and butter over the years.

It also has a couple of powerful tailwinds as generally more and more businesses of every size are moving parts of their operations online and increasing the demand for IT hardware to support this structural shift.

Moreover, the shift online is generating more demand for cloud services that also requires hardware or the physical infrastructure that allows the storage of data online from the data-generating client through to the physical data centre operator.


It’s also a thin margin business which of course does not speak well of its economics, but on a glass half full basis it does provide something of a moat as potential competitors will find it hard to produce free cash flow given the tough economics.

Dicker Data shares are now up 56% over the last 12 months while paying out additional 20.2 cents per share in fully franked dividends.

It should pay out at least 21 cents in dividends over the next 12 months to mean it offers a reasonably conservatively estimated forward yield of 4.7% over the next 12 months.

You can’t argue with that for a business that is also forecasting double digit growth in revenue and profit over fiscal 2019.

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Motley Fool contributor Tom Richardson owns shares of Dicker Data Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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