An income stock I would snap up in a heartbeat when I have the investable cash to do so is Computacenter (LSE: CCC). I also want to know if the stock could continue its impressive growth trajectory. Let’s take a look!
IT solutions provider
Computacenter is one of the leading providers of IT infrastructure in Europe. It helps organisations source and implement technology. This includes software, hardware, infrastructure integration, and managed services. It does this with the aims of helping businesses perform more efficiently and staying ahead of the tech curve.
Let’s start by taking a look at Computacenter’s share price. It’s up 35% over a 12-month period from 2,020p at this time last year to current levels of 2,738p as I write.
More growth and payouts to come?
As an income stock, Computacenter looks like an excellent option to me. A great track record of performance as well as rock-solid relationships with customers and technology businesses alike have helped the business grow and its shares and returns continue upwards.
Earlier this month, Computacenter released an interim update. In it, the firm said its on track to grow its earnings per share for the 19th year in a row.
A dividend yield of 2.5% is attractive enough, although it is worth remembering that dividends are never guaranteed. A price-to-earnings ratio of 15 makes the shares look decent value for money. I firmly believe sometimes its makes sense to pay a premium for a quality business.
Could the business continue this impressive growth trajectory though? I certainly think so. For example, Computacenter has a great footprint and some excellent customer relationships. The tech boom in recent years has helped the business. Plus, a potential artificial intelligence (AI) boom could help the business soar further too. Performance and payouts could be boosted. This is a key area for growth, in my opinion.
A risk that I must note is that IT spending can be dented by economic volatility. At present, soaring costs for businesses may mean that they review non-essential spending to upgrade or update IT infrastructure. However, it is worth noting that some form of IT spending, even to maintain existing tech, is necessary.
Another issue to bear in mind is that many firms like Computacenter benefited from the surge in people working from home in recent years, prompted by the pandemic. With this spending now a thing of the past, could performance and payouts be dented? I’ll keep checking performance updates but other avenues seem to be keeping the firm’s performance consistent.
I wish I’d invested earlier!
This is one of those instances where I wish I had a crystal ball. If I did, I would have purchased Computacenter shares a long time ago.
However, I still reckon there’s growth on the cards for the technology provider in the years to come. I especially expect the business to do even better than it is now once market volatility cools.
The post Is this 2.5% yielding income stock primed for growth and further returns? appeared first on The Motley Fool UK.
Should you buy Computacenter Plc now?
Don’t make any big decisions yet.
Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.
And he believes they could bring spectacular returns over the next decade.
Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows…
When such enormous changes hit a big industry, informed investors can potentially get rich.
So, with his new report, Mark’s aiming to put more investors in this enviable position.
Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!
Grab your FREE Energy recommendation now
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
Up 29% this year, can this UK growth stock keep going?
Sumayya Mansoor 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.
