Is Dicker Data Ltd (ASX: DDR) the answer to all of our investing prayers? Have we finally found a company that offers growth and income?
Dicker Data is Australia and New Zealand largest independent distributor of IT hardware with a network of more than 5,000 business partners. The company has distribution agreements with global IT hardware manufacturers like Hewlett Packard, Cisco, Microsoft, Samsung, Toshiba and Lenovo. This is in addition to its strategic pivot into Software as a Service (SaaS) and the internet-of-things (IoT) – buzzwords in technology circles.
Growth Bolted On
Late last year Dicker Data made two strategic distribution agreements with ASX listed IoT companies Buddy Platform Ltd (ASX: BUD) and CCP Technologies Ltd (ASX: CT1). Shares is CCP Technologies rose 9% while BOP rose over 4.1% on the news.
Dicker Data remains an incredibly attractive business and one that is very high on my investing watch list. Not only does it have an impressive track record of profit growth it is led by an experienced management team.
Importantly their management team are focusing on doubling down on their competitive advantage, business cost management and ultimately, shareholder returns. This is all on the back of significant tailwind as the demand for IT hardware continues to climb in line with the growth of the wider digital economy.
Dicker Data is not a shoot-the-lights-out growth stock, but it does have an impressive track record of revenue and profit growth. Earnings per share have more than tripled since 2011, with profit and revenue growth in the mid-single to double digits for the six-month period ending December 31, 2017.
Dicker Data’s co-founder and CEO report don’t draw a salary from the business, he lives off the dividends received while his ex-wife (and co-founder) Fiona Brown reportedly draws down an annual salary of only $38,000. Between them, the two co-founders own over 113 million shares in business with just over 160.6 million on issue.
In conclusion, Dicker Data is a great company with not only a solid foundation but a great outlook. The recent agreements with Buddy and CCP Technologies have encouraging future growth into a new market.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).