Finding a mix of growth, income and value appeal within one company can be hugely difficult. Often, shares are split into ‘income’ and ‘growth’ stocks, with the former usually mature businesses with slower rates of growth and the latter spending excess capital on growth strategies.
However, even with the FTSE 100 trading close to an all-time high, there appear to be two investment trusts which could offer a balanced investment outlook. As such, they could be worth buying right now for the long run.
Impressive outlook
Reporting on Wednesday was specialist investor in UK care homes, Target Healthcare (LSE: THRL). The real estate investment trust (REIT) reported a rise in net asset value per share of 1.3p in the year to 30 June 2017. During the year, it completed eight transactions as well as a further two transactions after the end of the financial year. This takes the company to near full investment, which means its balance sheet may be better able to support its long term growth objectives. Greater scale allowed an increase of debt facilities, which could help to maximise its overall returns.
Dividends per share increased by 1.6%, which puts the trust on a dividend yield of 5.4%. There could be greater scope to increase shareholder payouts over the medium term, with the company’s earnings per share forecast to rise by 26% in the current financial year.
Trading on a price-to-book (P/B) ratio of 1.15, Target Healthcare appears to offer a modest valuation given its outlook. The company could prove to be a relatively stable income investment which helps its investors to generate high total returns through a mix of capital growth and dividends.
Growth potential
Also offering income potential is self-storage specialist, Safestore (LSE: SAFE). The REIT is expected to deliver a rise in its bottom line of 15% in the next financial year, and this could allow it to pay a higher dividend.
Currently, it has a dividend yield of 3% which is covered 1.7 times by profit. This suggests that there is scope for shareholder payouts to increase at a faster pace than profit over the medium term. This could help investors to beat inflation, which already stands at 2.9% and is forecast to move higher in the coming months.
Looking ahead, Safestore could also post high capital gains. It trades on a price-to-earnings growth (PEG) ratio of just 1.1, which suggests that it offers excellent value for money. That’s especially the case since the self-storage sector may prove to be relatively defensive if the UK macroeconomic outlook deteriorates.
Therefore, Safestore could have a potent mix of growth, value and income appeal. And with its share price having risen 16% in the last six months, investor sentiment appears to be positive. This momentum could benefit its near term performance.