Can NCC (LON:NCC) provide both capital growth and income?

The ‘SG Quality Income Index’ tracks yield and quality - a combination that SocGen analysts have called the 'holy grail' of investing. 

Many in the market now appreciate that both higher ‘quality’ stocks and higher yielding stocks tend to outperform, but according to a SocGen research note (Popular Delusions: Introducing SG's Quality Income Index), stocks that share both qualities put together standout total returns that have averaged 11.6% per year since 1990, more than doubling the return of the global equity markets at a significantly reduced volatility.

This 'holy grail' stock is, simply, one with a Piotroski F-Score of more than 7 and an above-average dividend yield. Using the financial data computed and included in Stockopedia's StockReports, we can instantly check whether our own stocks meet these criteria and screen the market for new candidates.

Let's take escrow and assurance services provider NCC (LON:NCC) as an example.

Checking the quality-income characteristics of NCC (LON:NCC)

The first point to check is NCC's Piotroski F-Score. As mentioned above, any score above 7 gets this company past the first hurdle. A quick look at the group's StockReport shows a passing F-Score of 8.

Next up is the income check. NCC pays out a rolling dividend yield of 3.02% (covered 1.70 times) rising to 3.36% - a healthy yield for patient shareholders.

What does this mean for potential investors?

NCC has an F-Score that suggests it could be a promising investment candidate worthy of further research - but it's only a first step. Higher F-Score stocks can still have weaknesses and may trade at premium prices compared to other stocks. We've identified some areas of concern with NCC that you can find out about here.