MIDAS UPDATE: Our translation specialist tip RWS has more than doubled in four years
Translation specialist RWS is another AIM stock with a long track record of dividend payments.
The firm has increased dividends every year since flotation in 2003 and, with chairman Andrew Brode still holding more than 32 per cent of the shares, there is a strong chance of further gains.
Midas first looked at RWS in 2009 when the company focused almost entirely on patent translation. The stock was £2.40 but chose to do a five-for-one share split so each share would be valued at 48p today.
RWS has translated Covid-19 health banners into numerous languages for Facebook and other tech giants.
The price had soared to £2.32 by 2016, when we last looked at the business. It has more than doubled since then, to £5.77 and should continue to increase in value.
From patent work, RWS has expanded into life sciences and technology, translating information for clients such as Apple and Microsoft and drugs groups including Pfizer and Roche.
Brode, now 79, is a shrewd operator and, along with chief executive Richard Thompson, deliberately moved into areas with long-term growth potential. Those choices look particularly canny today.
Spending on drugs and medical devices is likely only to rise following the coronavirus pandemic, while our dependence on technology has become even more marked during the lockdown.
RWS has translated Covid-19 health banners into numerous languages for Facebook and other tech giants.
Brode and Thompson have also helped drug customers to develop potential vaccines and antibody tests, devising and translating questionnaires for patients around the world and translating medical device instructions for global use.
Early in the pandemic, RWS mobilised thousands of freelance researchers on its database so they could gather information on coronavirus and create a central repository that is free for any drug firm to use.
Interim results, released earlier this month, showed a slight decrease in group profit, after an exceptional first half last year, but the dividend was maintained and there is optimism about the future.
Analysts expect profits of £69million in the year to September, rising to £78million in 2021. A dividend of 9.75p is forecast for 2020, rising to 10.75p next year.
Midas verdict: RWS has been a cracking AIM investment, delivering a 12-fold increase over the past 11 years, and steady dividend growth along the way. At £5.77, there should be further gains. The group operates in high-growth areas, it is known for top-quality work and the dividends are an added bonus.