At Troy Income & Growth Trust, we seek to invest in high-quality, resilient companies that can grow their dividends. This should allow the trust to produce a balanced total return made up of a growing income stream along with capital growth. The core focus is on UK companies. At least 80% of the portfolio is invested in companies listed in the UK, with select investments in high-quality international businesses. We seek to be the high-quality, conservatively-managed, dividend growth trust in the AIC UK Equity Income sector.
As part of our endeavour to shield equity investors from excess market volatility, the trust employs a discount control mechanism (DCM), actively issuing and buying shares to ensure that it trades within a few percentage points of its underlying net asset value at all times. The DCM also means investors enjoy significantly improved liquidity when buying and selling the trust’s shares.
Premium spirits take the lead
We seek out companies and sectors that are able to sustain high returns on capital and can grow cash flow per share over a long period. We believe that consistent cash generation reinvested at high returns on capital is the only truly sustainable source of long-term enterprise value creation and dividend growth. Companies with these attributes tend to have clear competitive advantages supported by valuable brands, powerful network effects, or high switching costs.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Diageo (LSE: DGE) is one of a number of consumer staples companies held in the portfolio. Diageo is a leader in the attractive global spirits market and is the owner of valuable brands including Johnnie Walker, Tanqueray and Baileys. Demand for premium spirits is growing as consumers are trading up from other drinks and Diageo has the brands and distribution to continue to capitalise on this trend. As a highly defensive business with strong pricing power, Diageo is not only a good stock for the current environment but also has attractive long-term growth prospects.
Bringing a lot to the table
Compass Group (LSE: CPG) is one of the world’s leading outsourced catering companies. In certain industries, it is said that scale begets scale. This is undoubtedly true in contract catering where leveraging buying power on food and supplies is key in generating good economics. Companies, entertainment venues, schools and hospitals are increasingly outsourcing catering, particularly given the current inflationary environment. Compass is the largest player in the industry and is still gaining market share. The pandemic presented operational challenges for the industry, but Compass looks to be emerging stronger than ever and is well placed for resilient dividend growth.
Data as currency
We have long been drawn to software and data companies as they require little incremental capital to grow. One of the portfolio’s largest holdings is RELX (LSE: REL) – an owner of unique databases and digital workflow solutions that serve professionals in various sectors including legal, insurance, science and academia. RELX’s data sets and software solutions are deeply embedded into customers’ workflows, which results in high switching costs and therefore highly recurring cash flows and dividends. As industries continue to digitise, RELX is well placed to capture further growth in the years ahead.
SEE ALSO:
• Investing for income? Here are six investment trusts to buy now
• Five dividend stocks to beat inflation
• Six high-yielding funds for income investors to buy now
-
House prices rise 2.9% – will the recovery continue?House prices grew by 2.9% on an annual basis in September. Will Budget policies and ‘higher-for-longer’ rates dent the recovery?
-
Nvidia earnings: what to expectNvidia announces earnings after market close on 20 November. What should investors expect from the semiconductor giant?
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsLooking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go? We round up the best investing apps
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
