Furthermore, a range of stocks could produce rising dividends over the long run. As such, their total returns could be highly impressive, which may increase your chances of becoming an ISA millionaire.

With that in mind, here are two mid-cap shares that seem to offer high potential returns in the long run.

Big Yellow Group

Self-storage specialist Big Yellow Group (LSE: BYG) released an encouraging update on Friday. Trading in the first quarter of its financial year was positive, with like-for-like occupancy moving to 85.1% from 83.3% in June 2018. This means that the company is on track to meet its objective of 90% like-for-like occupancy over the medium term.

With a pipeline of 13 potential stores that comprise around 19% of the company’s current maximum lettable area, it could generate improving financial performance in the long run. Although demand may weaken to some degree during the Brexit process, the company’s price-to-book (P/B) ratio of 1.5 suggests that this has been accounted for by investors.

Since Big Yellow Group has been able to deliver a rise in dividends per share of 53% during the last five years, its 3.5% dividend yield may become increasingly attractive over the long run.

Although there may be higher-yielding dividend stocks available elsewhere, the company’s potential to generate capital growth and an increasing bottom line could mean that its total return is higher than for many of its index peers. As such, now could be the right time to buy it for the long term.

easyJet

easyJet’s (LSE: EZJ) trading update released this week showed that the budget airline is on track to meet expectations for the full year. The company is, of course, facing challenging operating conditions that have contributed to weak investor sentiment. This has led to a falling share price, which saw it demoted from the FTSE 100 to the FTSE 250 in June after six years in the large-cap index.

In the short term, the stock could face further pressure on its valuation. Challenges such as weak consumer confidence are set to continue, and could lead to an increasingly cautious stance from investors.

However, with the company having a solid track record of growth, it could be well-placed to increase its position in what is set to be a growing budget airline sector over the long run.

Since easyJet has a dividend yield of 6.5% that is covered twice by profit, its income prospects seem to be bright. Meanwhile a price-to-earnings (P/E) ratio of 7.7 could mean that it offers a margin of safety which provides scope for an upward re-rating over the long run.

The post Looking to become an ISA millionaire? I’d buy these 2 FTSE 250 dividend growth stocks appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of easyJet. 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.

So serious is the latest round of legal changes that Charles Clarke, chairman of the Eastern Landlords Association, proclaimed in local newspaper the Eastern Daily Press that “it’s another nail in the coffin for the buy-to-let industry. Landlords face a big dilemma, costs can run into the thousands and as a result several people have already sold up as they’ve had enough.”

And the move threatens to impact individuals with small property portfolios in particular, Clarke claiming that “if you’ve got one or two properties and aren’t running a company, the work is going to be too expensive for many people and a real trauma.”

A pukka property play

With buy-to-let becoming more expensive and increasingly complex, it’s a sector that’s best avoided, in my opinion. If you’re looking to get exposure to the property market, why not do this by investing in the stock market?

Take Big Yellow Group (LSE: BYG), for example. It’s a real estate investment trust (REIT) that’s going from strength to strength because Britons can’t stop buying and/or won’t throw out their old junk, and as a consequence don’t have enough space to store all of their possessions.

Despite the impact that the challenging economic and political environment is having on consumer spending power, this blend means that demand for Big Yellow’s self-storage pens continues to rise. In the three months to December like-for-like revenues rose by a healthy 6.4% to £31.5m, while underlying closing occupancy as of the end of 2018 rose by 2.4 percentage points year-on-year to 82.1%.

The trading outlook for the FTSE 250 firm can be considered pretty compelling and this is encouraging the business to pursue a programme of aggressive expansion. In the last quarter it received planning consents to develop its Battersea site and to build a new facility in Bracknell, while construction at its new stores in Manchester and Camberwell should start in summer 2019 and 2020 respectively.

A true income star

If you’re a dividend hunter then Big Yellow is a particularly-attractive pick right now too.

Under REIT rules, the company is expected to distribute at least nine-tenths of profits to shareholders in the form of dividends, and with earnings expected to rise by high single-digits through to the close of next year at least, these payouts are expected to keep rising at at a fair lick. A 35.6p per share dividend is predicted by City analysts for this year and a 38.2p reward for next year, figures that yield a chubby 3.6% and 3.8% respectively.

And I wouldn’t bet against profits and thus dividends continuing to surge many years into the future, and consequently believe it’s a much better investment than playing the buy-to-let market.

The post Buy-to-let costs are increasing! I’d rather buy this big-yielding property stock appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares 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.

Today, I’m looking to build on this by discussing three shares from Britain’s second-tier index that offer strong earnings potential as well as big dividend yields. The first of these is Big Yellow Group (LSE: BYG), the self-storage provider predicted to pay big rewards as citizens’ insatiable quest for additional space to hold their valuables — as well as, let’s face it, junk — drives trade.

This phenomenon was underlined by January’s financial update in which Big Yellow reported a 2.4% year-on-year improvement in closing like-for-like occupancy as of the end of December, to 82.1%. This, in turn, helped underlying revenues for the last quarter jump 6.4% to £31.5m.

And the company, through its perky acquisition and construction programmes (the latter of which has seen it recently break ground on new sites in Manchester and Camberwell) is creating the backdrop for sustained profits growth in the years ahead.

A bright earnings outlook means that City brokers are predicting dividend increases, to 36p per share in the 12 months to March 2019, and to 38.3p in fiscal 2020. Consequently, Big Yellow carries chubby 3.7% and 4% yields for these respective periods.

Box clever

Tritax Big Box (LSE: BBOX) is another storage expert I’m tipping for great things. In this case, the holding of retail products before they’re stuck on trucks and transported to shops, or straight to the customer.

The company offers space to blue-chip customers including the likes of Amazon, giving it the long-term security to keep growing rental revenues and to ride out temporary blips in the domestic economy, such as now. As a result, 100% of its property portfolio is currently let or pre-let, and this stability is encouraging it to keep on expanding (it acquired eight new ‘big box’ sites in 2018 alone).

Reflecting this bright outlook, the number crunchers expect Tritax to deliver steady earnings expansion through to the end of next year at least, meaning dividends are expected to keep rising too. Thus payments of 7p and 7.3p per share are estimated for 2019 and 2020, respectively, figures that yield a stunning 5% and 5.2%.

The biggest yields of all!

The stars appear aligned for Polymetal International (LSE: POLY) to also keep paying market-mashing dividends, because of the great gold price outlook that City brokers expect to underpin double-digit percentage profits growth this year and next.

For 2019, a total 42.6p per share dividend is expected, translating through to a jumbo 5% yield. And next year, a 47.7p reward is being touted, thus nudging the yield to a titanic 5.6%.

These perky profits forecasts are supported by Polymetal’s surging production too. An anticipated 1.55m ounces for last year is predicted to rise to 1.7m this year, and to 1.8m in 2020. And the quality of its assets like Nezhda in Russia — a complex at which the gold digger upgraded its reserve estimates in November — convince me that profits, and subsequently dividends, can keep tearing higher beyond the medium term.

The post Dividend alert! 3 FTSE 250 dividend stocks I’d buy and hold for the next decade appeared first on The Twelfth Magpie.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Tritax Big Box REIT. 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.

I’ve been talking up self-storage specialist Big Yellow Group (LSE: BYG) for years now.

It’s true that the political and economic troubles created by Brexit mean that Britons are becoming more and more careful with their money, but in this day and age, extra storage space appears to be a necessity rather than a luxury, a reflection of our growing hoarding culture and smaller and smaller living spaces for millennials.

Big Yellow proved all of this with its latest set of financials released yesterday.

The FTSE 250 firm said that a lower revaluation gain in the six months to September caused pre-tax profit to fall 22% year-on-year to £61.4m. This was the only blot on an otherwise robust set of numbers in which the firm declared that like-for-like revenues rose 7% to £62m, driven by an improvement in occupancy (which rose 1.5% on a like-for-like basis to 84.9%) as well as increased rental rates.

As a consequence, the storage star had the confidence to lift the interim dividend 9% on-year to 16.7p per share. A 16% improvement in operating cash flow, to £34.6m, must have gone some way to facilitating such a bulky payout increase.

Expanding to thrive

Big Yellow also provided an update on its expansion and development strategy which it is “aggressively” pursuing, and it currently has 11 sites in the pipeline as it builds its store network, predominantly in the economically-stronger regions of London and the South East.

So City analysts are expecting the business to roar back from a predicted 51% earnings duck in the year to March 2019 with an 8% rise in the following period. And thanks to its buzzing expansion programme I’m tipping Big Yellow to remain a strong profits creator and thus decent dividend raiser as well.

In the meantime the number crunchers are forecasting a 33p per share dividend for fiscal 2019, up from 30.8p last year and yielding an inflation-shredding 3.5%. And next year a 35.8p reward is anticipated, driving the yield to an even better 3.8%.

A prospective P/E multiple of 22.5 times may make Big Yellow an expensive pick on paper, but I believe that its exciting growth strategy, not  to mention its resilience in challenging conditions, makes it worthy of such a premium.

11% yields

If you’re looking for stunning value then Bovis Homes Group (LSE: BVS), which closed at its cheapest for 18 months just yesterday, is a great income share to pick up today.

At current prices the homebuilder changes hands on a forward P/E ratio of just 9.5 times, a figure which suggests to me that the market is far too bearish right now. Sure, the uncertain economic outlook may be pressuring homes demand right now, but in my opinion the UK’s housing shortage should keep earnings at the likes of Bovis on an upward path. And this was underlined by its news that it is “fully sold for this year” and that it is still targeting “a record year of profits for 2018.”

City brokers share my optimism and are predicting earnings expansion of 42% in 2018 and 15% next year. These bright forecasts also support anticipated dividends of 101.9p per share this year and 103.5p next year, figures that yield a stunning 11.1% and 11.3% respectively.

All things considered, Bovis provides plenty for investors to get their teeth into. I’d be happy to buy it now and hold it long into the future.

The post 2 FTSE 250 dividend stocks I’d happily buy today and hold forever (like this 11% yielder) appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares 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.

However, saving for retirement isn’t easy. A lot can change in 50 years, and finding the companies today, that will still be around decades from now is difficult.

Still, a long-term buy-and-hold strategy is worth pursuing because it can pay off in a big way if you get it right. Here are three companies that I believe will still be around in 2068.

Consumer goods

Dairy Crest Group (LSE: DCG) tops my list because this business has already been operating for nearly 40 years, although in one way or another, the company, which was the marketing arm of the UK’s Milk Marketing Board, has been around since 1933.

I believe this is just the start of the Dairy Crest story. The firm’s Cathedral City brand is one of the most popular consumer brands in the UK, and sales are growing. Meanwhile, the company’s cooking spray and infant formula business provides an excellent hedge against volatile milk prices. 

Dairy Crest has a stable of products that are change-resistant. As long as people keep eating cheese, cooking food and feeding babies, Dairy Crest should continue to prosper. The shares yield 4.9% and change hands at 12.8 times forward earnings.

Death and taxes

They say there are only two certainties in life: death and taxes. So if you’re looking for a long-term buy, investing in one of these trends certainly makes a lot of sense.

Dignity (LSE: DTY) is an excellent play on the former. The largest, and only publicly listed, funeral provider in the UK, Dignity offers size and scale that no other company can match.

The firm is currently trying to cope with a wave of bad publicity regarding its pricing policies but management has acted to stem the issues. It introduced a low-cost alternative and is planning to invest £50m over the next three years to deliver £8m of annualised additional underlying operating profit by 2021. Despite having already rolled out the lower price options to customers, Dignity’s revenues rose during the first half. 

As long as the company does not overstretch itself, Dignity should continue to produce returns for investors for decades to come. Trading on a forward P/E of 14 and yielding 2.4%, the stock does not look too pricey either.

Self-storage

My final buy for the next five decades is self-storage company Big Yellow Group (LSE: BYG).

Big Yellow has built a robust business model. Properties are located in highly attractive positions, specifically in urban areas with excellent transport connections. They’re also large billboards for the business, which cuts down on marketing costs.

What I like about this business is its property estate. The company has 57 Big Yellow self-storage centres, on which it owns the freehold across London, the South East and large metropolitan cities. This works out at around 78% of its property portfolio.

These properties are an insurance policy for the group. If the self-storage business does not work out, Big Yellow can always sell or let its properties to developers or other companies. With most of the portfolio located in built-up areas, demand will be high. I’m confident the firm will be around, in one form or another 50 years from now. It currently yields 3.7%.

The post 3 stocks that should pay you for the next 50 years appeared first on The Twelfth Magpie.

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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.

Bad Sports

Sports Direct is still up 45% over the year, against around 7% for the FTSE 100, so long-term investors can take this on the chin. However, it does suggest that Mike Ashley’s group may have slipped up. The controversial boss began building a stake in department store Debenhams in 2017, and now owns nearly 30% of the group. The result: an £85m hit following the collapse in the troubled retailer’s share price, down 70% on a year ago.

Debenhams is not the only strategic investment Sports Direct is pursuing, it also has a stake in House of Fraser, French Connection and Goals Soccer Centres, although to what end, nobody really knows.

Street life

Although Sports Direct’s revenues rose 3.5% to £3.36bn, this was mostly driven by recent US acquisitions, with sports retail sales falling 2% in its main UK market. There was some good news, with strong pre-capex free cash flow rising almost 27% to £326.2m, although net debt more than doubled to £397.1m, due to the purchase of its own shares, strategic investments and investment in property. The National Living Wage also hurt.

Sports Direct also has to contend with the UK retail blight, although that may work in its favour as high street competitors go to the wall. The England World Cup run may have boosted sales too. At a forecast valuation of 24.2 times earnings, you are paying a high price for buying into failure, although that does not deter Peter Stephens. There is no yield either, and earnings per share are forecast to fall another 11% in the year to 30 April 2019. All this and Mike Ashley too? Not for me.

Mellow Yellow

Self-storage specialist Big Yellow Group (LSE: BYG) has also shone over the last year its share price rising 22% in that time. It is shining today as well, up 1.5% after publishing an update for the first quarter to 30 June. 

The statement showed that its 74 Big Yellow stores increased like-for-like closing occupancy to 84.2%, an increase of 2.6 percentage points from 30 June. Its average achieved net rent per sq ft increased by 3.2% compared to the same quarter last year.

Store of value

The group’s like-for-like revenue increased by 7.6% on the same quarter last year, driven by a combination of growth in occupancy and rates. It is also pressing ahead with other developments, extending in Wandsworth and Wapping, constructing a landmark store in Manchester city centre, and submitting an application for a planned store at King’s Cross. 

CEO James Gibson reminded investors that it continues to follow a “more aggressive expansion strategy, largely through the acquisition of raw land”. A forecast yield of 3.4% makes this FTSE 250 stock  an attractive pick for income investors, despite its elevated valuation, currently 22.7 times earnings. Management is under fire for its executive pay practices, with Royal London Asset Management leading the charge. However, for me the future looks bright, the future looks Yellow.

The post These 2 top growth stocks have been thrashing the FTSE 100 appeared first on The Twelfth Magpie.

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harveyj has no position in any of the shares 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.

The two companies I’m looking at today reflect this dilemma. One offers a super-high 7.6% yield, but appears to have limited growth potential. The other yields less than 3.5%, but has doubled its profits in the last four years.

A growth business

More and more of us are living in rented or shared accommodation, driving strong demand for self-storage. Market-leader Big Yellow Group (LSE: BYG) said today that its adjusted pre-tax profits rose by 12% to £61.4m during the year to 31 March. Sales rose by 7% to £116.7m over the same period.

When profits rise faster than sales, it usually means that profit margins are increasing. One reason for this that occupancy rose from 78% to 81% last year, despite the firm adding new stores. The costs of operating a store are mostly fixed, regardless of how full it is. So increasing occupancy can give a big lift to profits.

In today’s results, executive chairman Nicholas Vetch confirmed that “higher levels of occupancy deliver more traction on pricing.” The company is targeting occupancy of 90%. Although it’s still some way from reaching this goal, I’m encouraged by the progress made last year.

More growth to come

Profits should keep rising if occupancy improves. But Mr Vetch is also targeting “the next phase of growth” and hopes to continue opening new stores around the UK to add to the company’s existing estate of 74 stores.

Ten development sites are already in the pipeline, and three have planning consent. The group also has a 20% stake in the Armadillo Self Storage group, which operates 22 stores.

Big Yellow’s share price has risen by 130% over the last five years. Analysts expect earnings to rise by about 8% to 41.8p per share this year, putting the stock on a forecast P/E of 23.

That might seem expensive, but the forecast yield of 3.5% and price/book value ratio of 1.4 seem about right to me for a growth business of this kind. I believe the shares could still be worth buying.

Give me a 7% yield today

If you want your dividend income upfront, then you may be interested in a different type of property stock. Shares in housebuilder and construction group Galliford Try (LSE: GFRD) currently offer a forecast yield of 7.7%.

The group launched a surprise £150m rights issue in March. This was used to help strengthen its balance sheet and fund an estimated £30m-£40m of extra cash costs on a £550m road-building project with failed firm Carillion.

A trading statement today suggests that these costs may now be slightly higher than expected, due to weather disruption. But Galliford’s other main division, Linden Homes, is still performing well. It’s delivered completions and forward orders worth £1,183m so far this year, compared to £1,176m during the same period last year.

A contrarian buy?

Chief executive Peter Truscott said that full-year results should be in line with market expectations this year. But his firm’s shares trade on just 6.7 times forecast earnings and offer a prospective yield of 7.6%.

This valuation suggests to me that investors don’t expect Galliford’s profits or dividends to be sustainable. This investment isn’t without risk, but if the firm can stay on track then I think the shares could deliver attractive returns over the next year or two.

The post One 7% dividend stock and one growth stock I’d buy today appeared first on The Twelfth Magpie.

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Roland Head has no position in any of the shares 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.

There is no shortage of great dividend stocks across the FTSE 250 index, but there are two in particular I would like to draw your attention to today: Assura (LSE: AGR) and Big Yellow Group (LSE: BYG).

Assura, a real estate investment trust that specialises in the healthcare sector, has proved rich pickings for income chasers in recent times as it has almost doubled dividends over the past five years. And City analysts believe its progressive payout scheme has much more in the tank.

Supported by an estimated 10% earnings improvement in the year to March 2018, the company is expected to raise the dividend to 2.5p per share from 2.25p last year. And this results in a giant 4.2% yield.

And in the upcoming year a 2.7p dividend is being forecast, helped by a predicted 6% profits advance and a figure that yields a brilliant 4.5%.

In rude health

It isn’t difficult to see earnings and thus payouts continue streaming higher at Assura for a long time to come either.

Suffice to say the business of healthcare is one of the ultimate defensive investment segments, providing the sort of earnings visibility that is critical for strong and sustained dividend expansion.

But Assura isn’t prepared to rest on its laurels and is expanding at a furious rate to light a fire under shareholder returns. Indeed, it acquired 22 medical centres and one development during the October-December quarter alone, taking the number of medical sites on its portfolio to a shade under 500.

Assura may be expensive, the firm carrying a P/E ratio of 21.3 times for the year starting April 2019. But I believe the firm’s exceptional defensive characteristics merit such a weighty premium.

Space star

Big Yellow is another great pick for dividend investors in spite of an also-elevated valuation (it currently deals on a forward P/E rating of 22.1 times for the fiscal year beginning April 2018).

Investec brokers are expecting the self-storage experts to report a 10% earnings rise in the 12-month period closing in a couple of weeks. And this is expected to keep dividends chugging northwards, with last year’s 27.6p per share reward predicted to rise to 30.6p, resulting in a 3.5% yield.

And next year, the payout is expected to move to 31.6p, helped by an anticipated 3% profits improvement and nudging the yield to a delicious 3.6%.

As my Foolish colleague Peter Stephens recently commented, some have questioned Big Yellow’s near-term profits outlook as the UK economy slows. But I for one remain convinced by the company’s growth prospects — we are a country of hoarders and space is at a premium in this land, after all. The business is well placed to capitalise on this trend, particularly as it expands its store network in urban spaces the length and breadth of the country.

The post 2 FTSE 250 dividend stocks I’d buy for my ISA today appeared first on The Twelfth Magpie.

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• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?

Royston Wild has no position in any of the shares 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.

Safer than houses

The first one on my radar is Shaftesbury (LSE: SHB), a real estate investment trust that owns 14.9 acres of prime property in “the liveliest parts of London’s West End”. This is clearly a focused play on prime London office, retail, leisure and residential property.

That’s not necessarily a bad thing. This part of the UK’s capital attracts millions of free-spending tourists each year. It’s also an area where some of the UK’s wealthiest residents live and relax. In my view it’s hard to imagine property in this area experiencing a long-term loss of value.

Today’s update certainly suggests that trading conditions are strong at the moment. Management reported “continuing high footfall and robust trading” during the four months to 8 February.

Occupancy levels were said to be “high” and recently completed properties are now 52% leased or under offer.

Is the price right?

Shaftesbury shares have fallen by 10% since hitting an all-time high of 1,055p at the start of January. Buyers today can pick up the stock for 950p, a level last seen in May 2017.

The risk is that the quality and security of the trust’s assets is still largely reflected in its share price. With low debt levels, a price/book ratio of 1.1, and a dividend yield of 1.8%, future growth could slow, especially if interest rates start to rise.

Despite this, I’d rate Shaftesbury as a stock you could safely buy and forget for 20 years.

A stock with more upside?

If you’re looking for a property trust with a higher yield and a more aggressive approach to growth, then self-storage specialist Big Yellow Group (LSE: BYG) might be of more interest.

Earnings growth is currently running at around 10% per year. Although this has been helped by the acquisition of new properties, like-for-like (LFL) growth is also strong.

During the quarter ended 31 December, LFL occupancy rose to 80.1%, up from 75.5% during the same period one year earlier. Like-for-like revenue for the first nine months of the firm’s financial year rose by 6.6% to £86.2m, helped by a 1.3% increase in average quarterly rents.

The right time to buy?

Big Yellow’s success hasn’t gone unnoticed by the market. The firm’s share price has risen by 20% over the last year and the stock now trades on about 20 times forecast earnings. A price/book value of 1.4 signals that the share price isn’t completely backed by property assets either.

Despite this, cash generation has been consistently strong. This has been reflected in modest debt levels and average dividend growth of 18% per year since 2012. Shareholders are expected to receive a payout of 30.6p per share this year, giving a prospective yield of 3.7%.

A slump in demand could cause profits to collapse. But although customers aren’t required to make a long-term commitment, the average length of stay is eight months, with 47% staying for one or more years.

With more people living in shared and rented accommodation, I’d expect demand for self-storage to remain stable. I believe Big Yellow could still be worth buying at current levels.

The post 2 dividend+growth investment trusts I’d consider buying today appeared first on The Twelfth Magpie.

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Roland Head has no position in any of the shares 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.

That would be none other than the UK’s dominant online property portal Rightmove (LSE: RMV). My reasoning is that while we can’t know when exactly the recent property boom will slow down, Rightmove is still a great business to own for the very long term.

This is because, for many house hunters and sellers, online portals are often the first port of call these days. And with a 75% share of this market, Rightmove is more often than not the biggest beneficiary from this trend.

And the company’s management team has leveraged this great market position into a business that kicks off cash at extraordinary levels. In the half year to June 2017, the group’s revenue rose 11% to £119.5m while underlying operating profits rose by the same amount to £91m.

After deducting taxes and tiny upticks in capex and working capital, this left a whopping £72m that management distributed in whole to shareholders via £42.5m in share buybacks and £29.5m in dividends.

Furthermore, while a downturn in the property market certainly wouldn’t be a boon for Rightmove, it also wouldn’t be disastrous. This unlikely defensibility comes from the company’s critical importance to estate agents, who know their customers want their properties listed on property portals and have to pay a monthly fee for this service. And as Rightmove adds on ever more services, the fees it extracts from agents continue to rise, up 10% in H1 to £911 per month per agent on average.

Although Rightmove isn’t dirt cheap at 28 times forward earnings, this cash-rich, high-margin, fast growing business is still one I’d be comfortable buying today and owning for the long term.

Big Green Profits 

One growing property business trading at a much lower valuation is self-storage firm Big Yellow Group (LSE: BYG) whose shares trade at 22 times forward earnings. And although the housing market may be entering the doldrums, it’s unlikely that cash-strapped young people will be any closer to stepping on to the property ladder in the next few years.

That’s good news for BYG since people living in tiny flats are much more likely to need self-storage spaces to store their excess belongings. According to BYG’s Q3 results released this morning, the trend appears to be continuing as strong as ever. In the first nine months of the year, occupancy rates at the company’s outlets increased from 75.5% to 80.1% year-on-year.

As demand for its units has increased, BYG has also found success in raising average rents, which led to revenue for the nine months rising 6.7% to £87.7m. The results didn’t contain any profit updates, but for the first six months of the year the group recorded £30.6m in adjusted pre-tax profits from £58.1m, which shows just how profitable running highly automated self-storage outlets is.

With bumper profitability, space to expand in the North of the country and demographic trends in its favour, Big Yellow Group is certainly one stock to keep an eye on.

The post Why I’d still buy this surging property stock despite the slowing housing market appeared first on The Twelfth Magpie.

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Ian Pierce has no position in any of the shares mentioned. The Motley Fool UK has recommended Rightmove. 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.