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This stock’s risen 200% in 2019! I’d buy it for my ISA and for retirement riches

Royston Wild
Couple relaxing on a beach in front of a sunset

Magazine publisher Future (LSE: FUTR) is a share whose price could gain an extra dose of rocket fuel in the days ahead. It’s due to release full-year results this coming Friday (15 November) and I’m expecting another set of bubbly comments on the trading landscape.

Future’s share price has exploded around 200% in the year to date and flew higher last time it updated the market in early September, too. In a pre-close statement the publisher said that earnings for the fiscal year to September 2019 would be “materially ahead” of the board’s previous expectations, underpinned by robust trading in the US and benefits attributed to Amazon Prime Day.

And it wasn’t the first time this year that the FTSE 250 business announced that trading was sailing past all previous predictions.

M&A mammoth

Thanks to meaningful action on the acquisition front Future has significantly bolstered its presence stateside and sales are booming as a result. The recent takeover of Purch and Newbay Media propelled group revenues 48% higher in fiscal 2018 and, encouraged by these results, the business has kept on splashing the cash both organically and through M&A. In the current calendar year Future has also paid to bring consumer electronics specialist Mobile Nations and business information outlet SmartBrief under its umbrella.

Steps to enter new content areas and expand on existing areas of coverage haven’t been confined to expansion in the U.S., however. The acquisition of four leading titles from London-headquartered Haymarket (What Hi-Fi?, Four Four Two, Practical Caravan, and Practical Motorhome) in 2018 boosted the number of market-leading brands in its portfolio, and Future went one step further last month with the monster £140m takeover of TI Media.

The purchase will be financed from a huge share placing late last month and gives Future access to much-loved and established titles like Country Life, Woman’s Weekly, and Wallpaper*. As well as boosting the publisher’s presence in a number of areas like technology and entertainment, the move will expand the mid-cap’s audience by allowing it to enter new areas of coverage (namely women’s interest, lifestyle, and sport).

Buy today; hold forever

On the back of these measures City analysts reckon the recent profits explosion at Future has plenty more room to run. Consensus suggests a 64% bottom-line improvement will be reported for fiscal 2019, and another 12% rise in the current financial period.

These bold predictions lead to expectations that dividends at the business (following its decision to start paying such rewards out again last year) will grow handsomely over the period, too. Last year’s 0.5p per share payout is predicted to rise to 0.8p for the year just passed and to 1p in fiscal 2020.

You won’t be surprised to hear that a subsequent 0.1% yield doesn’t blow my socks off, nor does Future’s high corresponding price-to-earnings ratio of 29.4 times. But on the back of its growing stable of magazines (currently 220 titles) and its improving geographic footprint I’d be happy to buy it today and hold it for years to come.

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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.

Motley Fool UK 2019