Today I’m looking at two dividend greats to consider stashing in your stocks and shares ISA before the 2017/18 cut-off date.
Bullion beauty
As I’ve argued before, in the current climate, having exposure to gold through mining stocks could be a very wise decision.
You may well have insurance on your car, your house, your life. So why not extend this to your shares portfolio? Bullion is considered the ultimate ‘store of value’ asset so that, if everything else goes to hell in a handcart, investors can avoid having to suffer a total washout.
Gold has fallen out of favour more recently and the World Gold Council announced recently that global gold-backed exchange traded funds (ETFs) held 2,393.4 tonnes of the metal as of the end of February, down 5.1 tonnes month-on-month.
But there remains plenty of macroeconomic and geopolitical uncertainty to keep precious metals well bought in the medium term at least. Donald Trump’s efforts to start a global trade war have helped gold to vault back above the $1,330 per ounce marker in recent days, and who would rule out further gains as the turbulence in the White House rumbles on, the Brexit standoff between Britain and the EU continues, and fears of frothy share markets persist?
There are several decent gold stocks that investors can buy, but for dividend chasers, Centamin (LSE: CEY) may be considered the best of the bunch.
Supported by a predicted 40% earnings rise in 2018 the Egypt-focused business is expected to pay a dividend of 9.4 US cents per share, resulting in a meaty 4.6% yield. And although a 4% profits drop is estimated for next year, the payout is expected to edge to 10.8 cents, a projection that creates a giant 5.2% yield.
If realised, this year’s projected dividend would be the second time in a row that Centamin has cut the dividend, the company having sliced 2017’s reward to 12.5 cents from 15.5 cents a year earlier. However, with costs stabilising and production rising — output of 580,000 ounces is predicted for 2018, up 6.5% from last year’s levels — I expect dividends to rise again in the not-too-distant future.
Keep on trucking
Stobart Group (LSE: STOB) is another big-paying dividend share investors need to check out today.
A stream of asset disposals has provided the financial firepower for the infrastructure and support services star to light a fire under dividends in recent times, and with profits expected to keep booming through to the end of next year, City analysts are expecting Stobart to keep on paying plentiful rewards.
An 18p per share payment is forecast for both of the years to February 2019 and 2020, up from an estimated 17.5p for the year just passed. And as a result, share pickers can enjoy a monster 7.6% yield through to the close of next year.
The FTSE 250 firm may not be the toast of value chasers, however, thanks to its gigantic forward P/E multiple of 63.7 times. Still, I would argue that Stobart’s ambitious plans for its Energy division, allied with the ambitious plans it has for London Luton Airport, makes it worthy of consideration despite its eye-watering rating.
