Here’s a growth stock I’d buy and hold for 10 years – Motley Fool UK

Tuesday has brought another welcome rise across global stock markets. The FTSE 100 is up by triple-digits as I type as infection rates slow and there are hopes that the world economy might not be hit as badly as first feared.

It still pays to dig out top defensive shares to protect your portfolio though. Those with resilient profits that should be able to ride out the worst of the coronavirus crisis. A growth hero with such characteristics Id be happy to buy today is Homeserve (LSE: HSV). And fresh financials released today illustrate why.

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Profits have been powering higher at the emergency callout specialist despite severe Covid-19-related lockdowns in many of its territories. Homeserve says that adjusted pre-tax profits are expected to have soared 12% during the fiscal year to March 2020, to 181m. This is also above analysts expectations.

The FTSE 250 growth stock continues to operate resolutely despite the coronavirus crisis. It has resisted the temptation to either furlough or make redundant its employees, it said. Around 6,000 of its office-based workers are now operating from home, while its emergency repair teams continue to answer around 150 callouts every hour.

The safe-haven appeal of utilities stocks is no secret. It doesnt matter how badly the economy is performing or whatever political chaos is raging. It also matters not whether other crises like public health disasters are developing. We all need running water to wash, electricity to boil the kettle and gas to put the heating on. And this keeps profits rising at these growth heroes. Its what makes the likes of FTSE 100 giants National Grid and Severn Trent such brilliant buys for turbulent times like these, I feel.

Its clear, too that Homeserve can be added to the list. If your plumbing is blocked or leaking, your boiler is kaput, or your homes wiring system shorts out, this companys services remain in demand, whatever troubles are going on outside.

The essential nature of its services has helped keep annual earnings barrelling higher at Homeserve in recent times. But this is not the only story. Through a steady stream of acquisitions and partner agreements, customer numbers continue to boom, rising by 100,000 year-on-year to stand at 8.3m as of March. It is making huge waves in the gigantic North American marketplace in particular. Its client base here swelled to 4.4m from 4m over the same period.

City analysts expect earnings at the growth stock to rise 8% in fiscal 2021, and by 15% the following year. And this creates expectations of more meaty dividend growth, resulting in yields of 2.2% and 2.5% for this year and next. It might be expensive on paper, sure. At current prices Homeserve commands a forward price-to-earnings (P/E) ratio of 26.1 times. I consider this to be a fair price considering its exceptional defensive characteristics and ambitious growth plans, however.

Savvy investors like you wont want to miss out on this timely opportunity

Heres your chance to discover exactly what has got our MotleyFoolUK analyst all fired up about this pure-play online business.

Not only does this company enjoy a dominant market-leading position

But its capital-light, highly scalable business model has been helping it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns in fact, in 2019 alone it returned a whopping 151.1m to shareholders in dividends and buybacks!

And heres the really exciting part

We think now could be the perfect time for you to start building your own stake in this exceptional businessespecially given the two potentially lucrative expansion opportunities on the horizon that our analyst has highlighted.

Click here to claim your copy of this special report now and well tell you the name of this TopGrowth Stock free of charge!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Homeserve. 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.

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Here's a growth stock I'd buy and hold for 10 years - Motley Fool UK