The Vitec Group (LSE: VTC) isn’t one of those companies you’ve likely heard of, although chances are you’ve viewed the world through the lens of one of its cutting-edge products.

The business, you see, is an expert in the manufacture of broadcasting cameras and their associated hardware, not to mention the development of photography equipment for the general public. And the small-cap continues to make exceptional progress in both areas.

Half-year results released in August showed group revenues boomed 11.2% during the six months to June, to £183.3m, and this gave adjusted pre-tax profit a whopping 24.4% year-on-year boost, the bottom line ringing in at a record £24.5m for the period.

It shouldn’t shock readers, therefore, that City analysts expect earnings to keep growing by double-digit percentages. An 18% rise is anticipated for 2018, and although a more modest 7% advance is predicted for 2019, I can see this figure being upgraded significantly as the months roll on.

There are a couple of reason why profits have stomped higher at Vitec in recent history. The steady stream of market-leading, premium-priced products that have been rolled out in recent months and years continue to strike a chord with its customers, the firm commenting in its latest release that a “significant number of market-leading new products launched at end of 2017 are selling well.”

Flash photography

You see, Vitec has its finger on the pulse of the latest trends which govern how broadcasters, independent content creators and photographers go about their business. For example, new products that have been developed in fast-growing areas like sports broadcasting and out-of-studio transmissions have simply flown off the metaphorical shelves.

The business isn’t just content to deliver exceptional organic sales, though, and it remains busy on the acquisition trail to keep profits bulging. Sating its well-publicised hunger for “carefully-targeted acquisitions in core and adjacent niche markets” Vitec splashed out on Rycote Microphone Holdings just last week for a fee that could eventually rise to £8.5m. The Stroud-based company manufactures noise reduction equipment for the audio capture market, giving Vitec the chance to sell complementary products to its clients.

And thankfully, the company has plenty of financial firepower to keep growing the size of the group. It is massively cash-generative and its debt pile continues to shrink, its net debt-to-adjusted EBITDA ratio falling to a meagre 0.7 times as of June from 0.9 times a year earlier.

A genuine dividend bargain

Its ability to kick out shedloads of cash, allied with its solid growth outlook means that City analysts are confident that Vitec can keep on raising the dividend at quite a pace. And so last year’s 30.5p per share reward is anticipated to step to 33.3p in 2018 and 35.4p in 2019, forward figures that yield a chunky 2.4% and 2.5% respectively.

A prospective P/E ratio of 16.9 times may not suggest that Vitec offers scintillating value for money. Its corresponding PEG reading of 0.9, below the accepted bargain threshold of 1, does however. And I reckon this low rating leaves plenty of room for further share price strength, its market value having already risen more than 40% over the past 12 months alone. I’d happily buy the camera colossus and hold it for years to come.

The post Have £2,000 to invest? An unknown but amazing growth stock with a fast-rising dividend 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.

And latest trading details released on Friday again underlined the broad resilience of the business.

In the 26 weeks to January 28, Wetherspoons saw revenues edge 3.6% higher, to £830.4m, or an impressive 6.1% on a like-for-like basis. This perky result helped interim pre-tax profit to soar 20.6% to £62m.

The cut-price food and drink chain isn’t totally immune to the growing pressure on consumers’ spending power, however. In the six weeks to March 11 it saw sales growth slow to 2.6% (or 3.8% on a like-for-like basis). But this isn’t the only issue to trouble the company’s colourful chairman Tim Martin.

He commented: “The company anticipates higher costs in the second half of the financial year, in areas including pay, taxes and utilities. In view of these additional costs, and our expectation that growth in like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year.”

Goes down a treat

Yet there are a number of reasons that Wetherspoons can expect to continue delivering chubby profits growth.

Firstly, the relative cheapness of its booze and pub grub should allow it to weather the toughening economic conditions better than the rest of the sector. Britons’ love of a night out isn’t going to end even if Brexit pressures persist, and Wetherspoons could actually benefit from the current environment should drinkers trade down from more expensive establishments.

On top of this, its mobile app launched a year ago that allows drinkers to order at the table and thus avoid those painful queues at the bar, has already proven a hit and should also keep underlying sales chugging higher.

City analysts believe Wetherspoons has what it takes to keep delivering solid earnings growth and are forecasting expansion of 3% and 2% in the years to July 2018 and 2019 respectively.

A forward P/E ratio of 17.8 times may be a tad heavy on paper, sailing above the accepted value territory of 15 times or below. But I believe Spoons’ proven toughness in tough trading conditions makes it worthy of this modest premium.

Picture perfect

As I say though, the pub chain isn’t without its degree of risk. So those not liking the cut of its gib may want to check out another growth hero I’ve identified today, The Vitec Group (LSE: VTC).

The camera and broadcasting equipment maker has seen its share price detonate over the past 12 months as investors have bought into the company’s transformation strategy. Earnings have grown by double-digit percentages in recent times, and City brokers are expecting this trend to continue, a 17% advance being chalked in for 2018.

A 7% rise is forecast for next year, although I see the chances of this figure being revised up as its raft of industry-leading, high-margin technologies rolls off the production line and its hunger for acquisitions continues (it snapped up imaging products manufacturer Adeal of Australia for £2.8m just last week).

Vitec changes hands on a forward P/E rating of 15 times. This is a bargain considering that its strong and evolving product portfolio should underpin sterling profits growth for many years to come.

The post 2 growth stocks I’d buy and hold for 20 years 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.