3 Growth Stocks With Growing Dividends

By: Tristan Harrison

Every investor should be looking for businesses that are going to grow over the long-term.

The best time to buy growth stocks is when the share price has temporarily dipped. Although the below shares don’t have huge yields, I think the dividends will grow at a pleasing pace as well as the businesses themselves.

Here are three growth stocks that I’m thinking about buying shares in:

Greencross Limited, ASX: GXL

Greencross is the pet market leader in Australia with its Petbarn stores and Greencross Vets.

Sentiment about the business has been negative in recent weeks due to Amazon’s impending arrival but I think the business can succeed without much worry. Its co-location strategy of putting a vet inside a Petbarn is a great idea.

It could also wipe the floor with the retail competition as its own online sales are increasing at a fast pace every year.

Greencross is currently trading at 15x FY17’s estimated earnings with a grossed-up dividend yield of 4.38%.

Domino’s Pizza Enterprises Ltd, ASX: DMP

The pizza mogul business has seen its share price drop from $80 down to $54. A combination of allegedly underpaid wages and high valuation have seen the market push the price down.

I think Domino’s has a great long-term future as it’s looking to expand its store count in Australia, New Zealand, Japan, Germany, Netherlands and Belgium. The same store sales have also been growing at a really impressive rate.

Domino’s is currently trading at 39x FY17’s estimated earnings with a partially franked dividend yield of 1.62%. This isn’t cheap, but in a few years the current price could be well worth the money.

Seek Limited, ASX: SEK

Seek is the job portal leader in Australia. It also has a large presence in Asia with Seek Asia and Zhaopin.

The Asian market has huge potential for Seek as more of the employment cycle is carried out online. China has a huge population for Seek to tap into.

The business is more susceptible to recessions due to the nature of its earnings being related to how many jobs are listed. However, I think a recession could be a great time to buy Seek shares.

Seek is currently trading at 30x FY17’s estimated earnings with a grossed-up dividend yield of 3.45%.

Foolish takeaway

I think all three businesses would be great options for an investor looking growth and a bit of income.

For income seekers, I think Greencross is a very attractive option at the current price. For capital growth, I think Domino’s could be a great long-term buy and hold over the next five years.

For more growth shares with pleasing dividends, you should read all about these stocks.

**JUST ANNOUNCED** Free Report: Top ASX dividend stock for 2017-18

You probably don’t know this market leader, but it’s making waves in Asia and already boasts a term-deposit-crushing dividend of almost 5%. A debt free balance sheet and dominant market position at home and abroad mean this company offers investors income and some real-deal growth potential.

Simply click here to grab your free copy of this up-to-the-minute research report right now.

Returns as of 6/22/17. Motley Fool contributor Tristan Harrison owns shares of Greencross Limited. The Motley Fool Australia owns shares of Greencross 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 Bruce Jackson.

By submitting your email address, you consent to receiving our free product Motley Fool Take Stock, and other products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms of Service.

© 2009 - 2017 The Motley Fool Australia Pty Ltd. All rights reserved.