These 2 dirt-cheap FTSE 350 income stocks could help you retire early

Buying these two FTSE 350 (INDEXFTSE:NMX) income shares could be a sound move.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Even though the FTSE 350 has increased in value by 8% in the last six months, there are still opportunities for income investors to buy high-yield shares. Of course, this opportunity may not last for all that long. Inflation has moved higher since last year’s EU referendum and is forecast to continue with its upward trend. As such, these two higher-yielding stocks could see their prices rise, and may even help you retire early.

An impressive performance

UK and European industrial property specialist Hansteen (LSE: HSTN) reported upbeat results for 2016 on Monday, as well as the disposal of its Dutch operations for €1.28bn. Its results showed that the company has made encouraging progress despite a somewhat uncertain market. Its net asset value per share increased by 15.9%, while normalised total profit moved 4.4% higher. This was enough to convince the company to raise dividends for the full year by 12.4%, which indicates that management has confidence in the company’s future.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Hansteen currently yields 4.8% from a dividend which is covered 1.3 times by profit. This indicates that its shareholder payouts are relatively sustainable at their current level. Furthermore, given the lack of requirement for excess capital within a real estate investment trust (REIT), it could even be argued that Hansteen may be able to increase its payout ratio in future without putting its finances under severe strain. When coupled with a forecast rise in earnings of 4% in 2018, this indicates a higher dividend may be on the cards.

While Hansteen’s price-to-earnings (P/E) ratio of 16.5 may not be particularly low, given its income potential it appears to be rather attractive. In fact, a number of property companies trade on higher ratings than Hansteen, which means a rising share price could be ahead.

Growth opportunity

While the outlook for UK property prices has become rather uncertain since the EU referendum, recent figures suggest the market is stabilising. For example, on Monday data from Rightmove suggested house prices were moving higher, while UK GDP growth continues to perform much better than was previously anticipated. This is good news for commercial property specialist Land Securities (LSE: LAND). Its dividend yield of 3.7% may not be the highest on offer, but an improving property market and economy could mean rapid dividend growth.

For example, even with a somewhat lacklustre and uncertain future for the UK economy already forecast, Land Securities is expected to record a rise in its earnings of 6% this year and 4% next year. As such, there could be scope for an upgrade to its outlook. And since dividends are currently covered 1.3 times by profit, dividend growth could match or even overtake profit growth in the medium term.

With Land Securities trading on a price-to-book (P/B) ratio of 0.7, its shares appear to offer excellent value for money. In fact, they could rise by almost 50% and still trade close to their net asset value. As such, they could be worth buying and may bring you a step closer to retirement.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Peter Stephens owns shares of Land Securities Group. The Motley Fool UK has recommended Hansteen Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Social media and digital online concept, woman using smartphone
Investing Articles

Apple stock: Buffett is long, Burry is short. What should I do?

Our author thinks about whether following Warren Buffet into Apple stock might be a good addition to his portfolio –…

Read more »

Close-up of British bank notes
Investing Articles

5 ‘no-brainer’ dividend shares to buy today

Is there an easy way to narrow down the list of FTSE 100 dividend shares? I try one approach, with…

Read more »

Close-up of British bank notes
Investing Articles

£5,000 to invest? 2 dividend-paying penny stocks I’d hold to 2030

I think these high-yielding penny stocks could help cushion the impact of high inflation on my returns. Here's why I'd…

Read more »

Renewable energies concept collage
Investing Articles

2 green stocks that I think are no-brainer buys for the future

Jon Smith explains two of his favourite green stocks at the moment, one for growth and the other for income…

Read more »

An airplane on a runway
Investing Articles

The Rolls-Royce Share price may be set for take-off!

After an upbeat Civil Aerospace Investor Day, here's why I think the Rolls-Royce share price could be set for take-off…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

2 beaten-down growth stocks to buy as inflation rises

Despite inflationary pressures and recession concerns, I am looking at some top growth stocks to solidify my portfolio over the…

Read more »

Stack of British pound coins falling on list of share prices
Investing Articles

Is the IAG share price too good to miss at current levels?

Jabran Khan delves deeper into the current state of play with the IAG share price and decides if now is…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

5 of the highest-paying income stocks compared! Which one is best for my portfolio?

Income stocks are certainly in vogue right now amid sky-high inflation. But which of these big dividend payers is the…

Read more »