However, it’s not the only company that could offer an impressive income outlook. Outside of the retail sector is a stock that released a positive set of results on Wednesday and which could generate impressive total returns.

Improving performance

The company in question is Centaur Media (LSE: CAU). The business to business information, insight and events company delivered a rise in revenue of 6% in the most recent financial year. This represents progress against its transformation programme, with the company having successfully reshaped its portfolio, improved the long-term quality of its revenues and reduced exposure to advertising.

Clearly, there is still some way to go until its turnaround is complete. However, overhead savings of £1.8m and an improved revenue mix could help it to generate rising profitability in future. This could make its dividend more sustainable, as well as offer scope for a higher shareholder payout over the coming years.

At the present time, Centaur Media has a dividend yield of 6.3%. This is highly attractive at a time when inflation is less than half that figure. Although dividends are due to be covered only 1.1 times by profit this year, the potential for a rapid rise in payouts could be high in the long term. Under its new strategy, the stock could become a sound income play.

Difficult period

Next also has the potential to deliver a high income return in the long run. Clearly, the prospects for the UK retail sector are incredibly challenging at the present time. Inflation has moved ahead of wage growth and this has caused consumer confidence to deteriorate. Against this backdrop, a number of retailers are finding sales growth and profit rises somewhat elusive. As such, the company’s near term performance could disappoint to some extent.

However, with the stock due to record a rise in its bottom line of 3% in the next financial year, it could see investor sentiment improve over the medium term. Since it trades on a price-to-earnings (P/E) ratio of around 11.5, it seems to offer a wide margin of safety in case trading conditions deteriorate yet further. This could protect investors against share price falls in the wider retail sector, as well as provide scope for a higher level of capital growth in the long run.

Therefore, with Next having a dividend yield of 3.4% from a payout which is covered 2.6 times by profit, it appears to offer a solid income future. The potential for special dividends means that its dividend appeal could improve – especially if trading conditions do likewise in future years.

The post Next plc isn’t the only bargain dividend growth stock I’d buy today appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
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Peter Stephens 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.

What does Foxtons say?

Who shot Foxtons Group (LSE: FOXT)? Once again, it was Brexit that pulled the trigger as the EU referendum becomes the perfect blame-all for any business with a disappointing story to tell. The group’s half-year profits are certainly disappointing, down 42.2% to £10.5m due to a slowing property market with little hope of recovery this year. Revenue fell 3.1% to £68.8m.

The London property market, where Foxtons is focused, had to slow at some point, and there were signs it was doing so well before Brexit. What the result may do is stretch out the pain that little bit further, although the 10% drop in Sterling may also attract foreign buyers. The second quarter was much weaker than the first and this was as much down to the 3% stamp duty surcharge introduced on 1 April as the Leave victory.

Foxtons remains a big player in the London sales and lettings market and is looking to expand to 100 branches, despite current uncertainties. The shares are down nearly 7% today leaving Foxtons trading at 10.08 times earnings and yielding 4.34%, which may tempt buyers who believe the capital can boom again.

Profits down, shares up

Engineering firm IMI (LSE: IMI) has seen its share price leap more than 3% in early trading, despite reporting a 19% drop in first-half pre-tax profits from £107m to £86m as revenue fell in challenging conditions. Net debt rose from £289m to £334m, partly due to an adverse currency impact of £70m.  

IMI expects more favourable currency impacts over the full year as it generates more than 90% of sales outside the UK and a weaker pound could boost revenues and operating profits. The business faces challenging conditions in a number of key sectors but chief executive Mark Selway claims he can drive growth through operational efficiency, enhancing processes and launching new products. Given the challenges, IMI looks pricey at 16.64 times earnings, despite the respectable 3.59% yield.

Less than bullish

Multi-platform business information and events group Centaur Media (LSE: CAU) has had a tough year, its share price falling 54% from 81p to 37p. It has seen its advertising and sponsorships revenues squeezed in recent months, yet recent updates show revenues rising at a fairly convincing pace, and this continues in today’s update.

Reported revenues grew by 8% to £39.9m in the six months to 30 June with underlying revenue growth of 4%. Premium content and live events revenues was up, more than offsetting a 6% drop in advertising revenues. Unfortunately, this was offset by a dip in adjusted operating profits to £5m, down from £6.1m in 2015, while adjusted operating margins of 12.5% were down from 16.6% in 2015. Lower advertising revenues, the cost of building premium content products and commercial team capability all hit reported operating profits, which slumped to £3.1m, down from £4.8m last year.

Centaur’s 170% cash conversion for the first four months of the year may convince some, as will its rock bottom valuation of 6.73 times earnings and sky-high 8.33% yield. Tempting, but risky.

The post Should you shun these 3 stocks after today’s results? appeared first on The Twelfth Magpie.

More reading

• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?
• Will SpaceX, Nvidia, or Alphabet be the first $10trn stock?
• Up 95%! This FTSE 100 stock’s outperformed Nvidia over the past year
• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
• How much do you need in a Stocks and Shares ISA to aim for £375 a week in retirement?

Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended IMI. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.