Worries about Britain leaving the EU have led to the stock market tumbling. We won’t really know whether Brexit will take place until after the polls close on 23 June, but jittery investors have pushed the FTSE 100 down to below 6,000.
Yet there still will be life after Brexit, companies will still trade, and the economy will still roll on. That’s why the current low share prices may present a buying opportunity.
And if you’re looking to invest, then here are a consumer goods giant, an industrial services firm, and a house builder that are my dividend dynamos.
Reckitt Benckiser
Reckitt Benckiser (LSE: RB.) has been one of the stock market’s greatest success stories of recent years. In a 17-year bear market where most stocks have been sliding, Reckitt’s valuation has been climbing steadily higher.
Why? Because it’s one of the most positive and focused consumer goods companies in the sector. It invests heavily in game-changing research and bright, optimistic marketing to sell a broad range of household products. And it’s now turning its attention from doing well in Europe and America to expanding in the booming consumer markets of China and India. Emerging markets remain largely untapped for Reckitt Benckiser, and offer the opportunity for the company to continue its rapid growth.
And earnings are still climbing. The 2016 P/E ratio is 23.44, with a dividend yield of 2.16%. That’s not cheap, but it seems a fair price for buying into what could be many more years of growth.
Cape
Cape (LSE: CIU) is a little-known mid-cap industrial services company that has been hidden away in the FTSE 250 index. The share price crashed after the company turned to a loss in 2013.
But since then it has recovered, and it’s now once again consistently profitable. Indeed, earnings per share are set to progress from 18.7p in 2014 to 25.33p in 2017. That then makes the 2016 P/E ratio of 8.21 particularly cheap.
What’s more, the dividend yield is predicted to be 7%, and should be well covered by profits. This makes Cape a value and recovery play with a very substantial income.
Berkeley Group
I’ve long been an advocate of investing in housebuilders as property prices and the number of transactions in the UK climb steadily higher. That’s why businesses like Berkeley Group (LSE: BKG) have been on a strong bull run.
Yet the rapid rise of earnings in this sector means that Berkeley is still good value. EPS is expected to jump from 188.4p in 2014 to 410.13p in 2018. And the 2016 P/E ratio is just 11.33, with a dividend yield of 6.25%, again well covered by profits.
This means the property developer is a growth prospect that’s also a value play and a high yielder. So this another one to tuck away in your income portfolio.
