Why I’d buy and hold this growth share to collect the 5% dividend yield

first_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. FREE REPORT: Why this £5 stock could be set to surge Image source: Getty Images. I also like this one. Kevin Godbold has no position in any 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. Why I’d buy and hold this growth share to collect the 5% dividend yield Our 6 ‘Best Buys Now’ Shares Get the full details on this £5 stock now – while your report is free. Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Simply click below to discover how you can take advantage of this. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address It’s notoriously difficult to achieve success trading the markets.For example, when I clicked onto my IG (LSE: IGG) spread bet account this morning the platform flashed up this warning: “75% of retail investors’ accounts lose money when trading spread bets and CFDs with this provider.”5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Good first-half resultsIn fairness, IG goes on to explain that it offers a complex service for traders. The firm deals in spread bets and Contracts for Difference (CFD). And they come with a high risk of losing money because clients can bet using leverage, otherwise known as borrowed money.For example, clients can open a far larger position in a spread bet that follows a share price than they would be able to if they bought the shares directly in a share account.However, one obvious way for IG’s clients to minimise the risk is to avoid the use of leverage. There’s no reason why clients shouldn’t do that with spread bets. And if we as investors are ‘right’ with our stock selections, gains will compound over time without gearing. And gearing while being ‘wrong’ just leads to higher losses.However, despite the temptations faced by clients to do financially destructive things with IG’s platforms, the firm’s shares look great! Today’s blistering half-year results report covers the period to 30 November and the figures are stunning. Of course, part of the reason for this is that in lockdown, many people turned to trading the markets as a pastime.Year-on-year, net trading revenue increased by 67% and earnings per share shot up by 126%. However, City analysts expect earnings to ease back a bit in the year to May 2022 as the pandemic hopefully fades. Maybe many people will get back to work and have less time for trading the markets.A great record and further expansion abroadBut the company has a cracking multi-year financial record and scores well against quality, value and momentum indicators. Indeed, operational progress has driven decent gains from an increasing share price. There seems little doubt that IG runs a lucrative, cash-generating business. And the company’s hitherto big net-cash hoard on the balance sheet adds to my conviction about that.IG also announced today the proposed acquisition of tastytrade inc. And the directors described the American company as a “high-growth” US online brokerage and trading education platform. It enjoys a “leading position” in US-listed derivatives (CFDs and spread bets are types of derivatives, for example) and has more than 105,000 active accounts.It plans to finance the $1bn deal by paying $300m in cash and by issuing 61m of its own shares worth around $700m. Chief executive June Felix said in the interim report that the acquisition will help operations diversify into US exchange-traded options and futures. The market has around 1.5m retail traders and Felix says she’s “confident” the transaction will “materially expand” IG’s US presence.I think IG looks like a decent growth stock. And with the share price near 855p, there’s a dividend yield running around 5% to keep me warm while I’m waiting. Kevin Godbold | Thursday, 21st January, 2021 | More on: IGG See all posts by Kevin Godboldlast_img

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