Every month, we ask our freelance writers to share their top dividend ideas with you — here’s what they said in December!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Diageo
What it does: Diageo sells some of the world’s most popular alcoholic beverages including Guinness, Bailey again Smirnoff.
Written by Royston Wild. It’s drinking a giant Diageo (LSE:DGE) doesn’t have the biggest profit out there. For this financial year (until June 2025), it sits at 3.7%.
This is probably related to FTSE 100 average.
However, the Captain Morgan The maker is still a legend of the budget, having increased the annual quota for more than 25 years in the spin. And I think it’s a top blue chip to consider following the new share price weakness.
Diageo’s share price has fallen more than 10% in the past month. And so we’re down 17% from the beginning of 2024.
Beverage-related spending has been disappointing for the most part lately. For Diageo, conditions in Latin America and the Caribbean were particularly difficult.
However, Footsie’s company has the ability to bounce back from such problems. And I’m sure it will repeat this strategy, backed by its heavyweight stable of brands, its innovative technology, and its exposure to fast-growing emerging markets.
Royston Wild is a shareholder in Diageo.
IM&G
What it does: IM&G is a UK-based asset manager with a retail and institutional client base spread across various global markets.
Written by Christopher Ruane. Half of the last year was poverty IM&G (LSE:MNG) stock price. After approaching £2.40 in March, it fell and has recently been hovering around the £2 mark, 11% below where it started the year.
But a lower share price equals a higher dividend yield. A recent short-term increase in profits has also helped. At 1.5%, it was modest. But management delivers on their goal of keeping or increasing earnings per share each year.
Combined, that means FTSE 100 The financial services company now offers shareholders a yield of 9.9%.
Such a large yield would indicate the City’s panic. The first part saw customers taking out more money than they put in (except for the company Gems business). If that continues – for example due to fears about market performance – M&G’s earnings could fall.
As a long-term investor, I like the firm’s strong brand, large client base and proven cash generation opportunities.
Christopher Ruane is an M&G shareholder.
Basic Health Structures
What it does: A real estate investment trust (REIT) specializing in the ownership and management of healthcare facilities.
Written by Mark David Hartley. Like most stocks, Basic Health Structures (LSE: PHP) suffered a short-term loss following a heavy autumn budget. Shares fell 6% in October, erasing a summer of gains. However, dividends remain constant, with a yield of 7.8% rewarding loyal shareholders. As a REIT, it is required to return 90% of its taxable income as dividends, usually to ensure a strong dividend record. That makes it a good option for an income portfolio with a long-term perspective.
The trade-off is that if the REIT invests more pre-tax profits in business development, the dividend payout ratio can be lower. This can happen during difficult economic times when the commercial industry is often struggling. In times of high inflation, limited property investment can stifle demand and hurt stock prices, as seen during the Covid era. However, as part of a long-term portfolio for consistent dividend income, I think it is one of the most reliable REITs FTSE 250.
Mark David Hartley is a shareholder in Primary Health Properties.
Supermarket Income REIT
What it does: Supermarket Income REIT invests in a variety of supermarket properties in the United Kingdom.
Written by Alan Oscroft. I Supermarket Income REIT (LSE: SUPR) share price has risen over the past few years, pushing its yield to 8.8%. Forecasts show the dividend growing, albeit slowly, over the next few years.
Inflationary pains and a weak property market have kept investors away from the trust. But we see a net asset value per share of about 89p, so the shares are at a discount to that.
During the FY results in September, chairman Nick Hewson said the board “focuses on delivering sustainable shareholder value.“
The dividend money comes from the end of the food sales, and that should be about protecting the business as much as you can.
The company has net debt, which may put pressure on future profitability. And stubborn inflation can mean short-term stock price volatility.
But I don’t see the combination of food and housing being anything other than a long-term cow.
Alan Oscroft has no position in Supermarket Income REIT
Taylor Wimpey
What it does: FTSE 100-listed Taylor Wimpey is one of the UK’s largest housebuilders.
Written by Paul Summers. Taylor Wimpey (LSE: TW.) shares have fallen over the past few weeks. This happens even though the company says it has seen “continuing signs of improvement in customer demand” more than H2 so far.
What stands out seems to be the fear of inflation brought on by the Government’s spending plans. The latter is believed to be so large that the Bank of England could be forced to slow the pace of interest rate cuts in 2025.
Such a move would not be good for the housing market. On the other hand, I think a lot of this is now priced in and new investors are being offered an attractive entry point.
Taylor Wimpey’s dividend yield is also over 7% (as I type). Of course, there is a risk that this will be reduced if trading weakens. But the rest may be more than I can find elsewhere FTSE 100.
Paul Summers has no position on Taylor Wimpey
Source link
